2357

ASUSTeK Computer Inc.

2013 ANNUAL REPORT

yTaiwan Stock Exchange Market Observation Post SystemǺhttp://mops.twse.com.tw yASUS annual report is available at http://www.asus.com

Printed on April 19, 2014

321 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 I. SPOKESPERSON & DEPUTY SPOKESPERSON Spokesperson: David Chang Title: Chairman Office - Chief Special Assistant Tel.: 886(2)2894-3447 EXT: 2330 E-mail: [email protected]

Deputy Spokesperson: Nick Wu Title: Management Headquarters - Finance Division - Senior Director Tel.: 886(2) 2894-3447 EXT: 2343 E-mail: [email protected]

II. HEADQUARTERS AND PLANTS Taipei Headquarters: 15, Li-Te Road, Beitou District, Taipei City Tel.: 886(2) 2894-3447 Address: 4F, 150, Li-Te Road, Beitou District, Taipei City

III.SECURITIES DEALING INSTITUTE Name : KGI Securities Corporation, Registrar and Transfer Services Address : 5F, 2, Sec. 1, Chung-Chin S. Rd., Zhongzheng Dist., Taipei City Tel. : 886(2) 2389-2999 Website : http://www.kgiworld.com.tw

IV. AUDITORS Name : CPA: CHOU TSENG HUI-CHIN & HSUEH MING-LING CPA Firm : PricewaterhouseCoopers, Taiwan Address : 27F., No.333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei City 110 Tel. : 886(2)2729-6666 E-mail : http://www.pwc.com/tw

V. EXCHANGEABLE BOND EXCHANGE MARKETPLACE Marketable security: GDR Luxemburg Stock Exchange: http://www.bourse.lu

VI. COMPANY WEBSITE http://www.asus.com

! 322 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ɡɡ CONTENTS ɡɡ Page I. Letter to shareholders ……………………………………………………………………… 1 II. Introduction of the company ……………………………………………………………… 3 1. Establishment date ………………………...……………………………………………….. 3 2. Development history ……………………………………………………………………… 3 III. Corporate governance report ……………………………………………………………... 19 1. Organization of company ………………………………………………………………… 19 2. Directors, Supervisors, President, Vice President, Assistant V.P., and department heads.... 21 3. Corporate governance …………………………………………………………………….. 30 4. CPAs fees …………...…..………………………………………………………………….. 51 5. CPA’s information …………………………………………………………………………. 52 6. The chairman, president, and financial or accounting manager of the company who had worked for the independent auditor or the related party in the most recent years ………… 52 7. Information on Net Change in Shareholding and Net Change in Shares Pledged by Directors, Supervisors, Department Heads, and Shareholders of 10% shareholding or more ……………………………………………………………………………………….. 52 8. The relation of the top ten shareholders as the definition of Finance Standard Article 6 …. 53 9. Investment from Directors, Supervisors, Managers, and directly or indirectly controlled businesses ………………………………………………………………………………… 55 IV. Stock subscription …………………………………………………………………………. 60 1. Capital and shares …………………………………………………………………………. 60 2. Corporate bonds …………………………………………………………………………… 67 3. Preferred stock ……………………………………………………………………………. 67 4. Issuance of global depository receipts …………………………………………………….. 67 5. Employees stock option certificates ………………………………………………………. 69 6. Limit on Employee New Bonus Share ……………………………………………... 70 7. Merger and acquisitions or stock shares transferred with new stock shares issued……….. 70 8. Fund implementation plan ………………………………………………………………… 70 V. Overview of business operation………………………………..…………………………… 71 1. Principal activities ………………………………………………………………………… 71 2. Market analysis and the condition of sale and production ………………………………… 75 3. Status of employees ……………………………………………………………………….. 81 4. Expenditure on environmental protection ………………………………………………… 81 5. Employee / employer relation …………………………………………………………….. 84 6. Important agreements ……………………………………………………………………… 89

323! WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 VI. Financial information ………………………………………………………………. 90 1. Five-year Financial Summary ……………………………………………..………………. 90 2. Five-year Financial analysis ……………..………………………………………………… 98

3. Supervisor’s report in the most recent years ………………………………………………. 106

4. Financial statements in the most recent years …………………………………………….. 107 5. Consolidated financial statements in the most recent years ………………………………. 107

6. Impact of financial difficulties of the Company and related party on the Company’s financial position ………………………………………………………………………….. 107

VII. Review of financial position, financial performance and risk management ……………. 108 1. Financial position ………………………………………………………………………….. 108

2. Financial performance ……………...………………………………………………………. 110

3. Analysis of cash flows ……………………………………………………………………... 113 4. Impact of major capital expenditure on finance and business …………………………….. 114

5. Policies, reasons for gain or loss and action plan in regard to investment plans in current year and the next year…………………………………………………………………….. 114

6. Risk management …………………………………………………………………………. 114 7. Other important matters …………………………………………………………………… 117

VIII Special disclosures …………………………………………………………………………. 118 1. Related party ……………………………………………………………………………… 118 2. Subscription of marketable securities privately in the most recent years …………………. 118

3. The stock shares of the company held or disposed by the subsidiaries in the most recent years ……………………………………………………………………………………… 118

4. Supplementary disclosures ……………………………………………………………….. 118 5. Occurrence of events defined in Securities Transaction Law Article 36.2.2 that has great impact on shareholder’s equity or security price in the most recent years and up to the date of the report printed …………………………………………………………………. 118

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324 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 I. Letter to Shareholders

Dear Shareholders:

Thank you for your long-term support and encouragement.

In 2013, the PC industry faced one of the greatest challenges in demand with shipments falling by 10 percent, globally. This decline was caused by a number of factors, including a sluggish global economy, lacking demand, and increasing competition from the mobile computing sector with various mobile form-factors entering the market place. ASUS understands that in a dynamic global technology marketplace, consumers quickly adjust their personal definitions of product experience and value. With a focus on innovation, ASUS continues to invest in expanding our world-class research and development pipeline and strengthen our engineering capabilities. In the last several years, our product design and operation management teams lead a dedicated global workforce leveraging concepts such as Lean Six Sigma, Design Thinking, and aligning standards with ASUS’s brand spirit initiative, “In Search Of Incredible”. As a result, ASUS continues to push the boundaries of innovation while setting new benchmarks of quality and value in personal and business computing technologies. Despite wide fluctuations in demand for touch notebooks in 2013, ASUS successfully maintained a steady growth by adjusting our product portfolio to introduce high-quality innovations to the computer, tablet, and smartphone markets. Our innovations and efforts were recognized by prestigious international organizations and press. The operating result of 2013 and business outlook are as follow:

Financial Performance The consolidated revenue of ASUSTeK Computer Group for 2013 was $NT463.3 billion, representing a 3 percent increase over the fiscal year. Net income attributable to shareholders of the parent company was NT$21.449 billion, representing a 5 percent decrease over the fiscal year. For 2013, our consolidated brand revenue (unaudited) was NT$421.4 billion, representing a 2 percent increase over the fiscal year. Brand operating profit (unaudited) was NT$19.676 billion, representing an 11 percent decrease over the fiscal year.

Global Recognition and Awards Over the past 11 years, the Taiwan Global Brands survey (organized by the Bureau of Foreign Trade, MOEA) has consistently recognized ASUS as one of Taiwan’s top three international brands. In 2013, ASUS was named winner of the Taiwan Brand Value Award. The company set a new milestone through its “In Search Of Incredible” company-wide brand spirit initiative, with brand value rising to an all-time high of US$1.711 billion.

Globally, ASUS was honored with a record-high 4,256 awards in 2013. These awards acknowledged a wide range of achievements related to innovation, brand image, customer satisfaction, customer experience, corporate social responsibility, and environmental sustainability.

For corporate and brand image, ASUS received the 2013 Most Admired Taiwan Enterprise Award from Common Wealth magazine, in the Appliances and Information enterprise category. Business Next magazine presented ASUS with the 2013 Digital Service Enterprise Benchmarking Award, and the company also received the 2013 Businessmen’s Ideal Brand Award from Business Today magazine.

Product Innovation ASUS has received the “Taiwan Excellence Award” for 11 consecutive years. In 2013, the company garnered an impressive 50 awards for products - six of which were named finalists for the Taiwan Excellence Gold Award. Early in 2014, ASUS won 11 prestigious awards at the global iF Product Design Awards ceremony in Germany, receiving honors in the computer, electronic communications, and multimedia categories. A total of 16 products were awarded with CES Innovations and Engineering Awards at the 2014 Consumer Electronics Show (CES) in the United States for our innovation and engineering excellence.

1 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Throughout 2013, ASUS continued to demonstrate innovation across multiple product lines. The ASUS Transformer Book T100 launched in Q4, and its robust sales indicate that the market quickly acknowledged its innovation and excellent user experience. The success of the ASUS Transformer Book T100 helped to drive business growth for the company. The emphasis on innovation continues in 2014 at CES where ASUS announced the unique personalized ZenFone series, PadFone mini and the AT & T exclusive PadFone X. Along with the Republic of Gamers (ROG) Swift PG278Q WQHD gaming monitor—the world’s first WQHD monitor powered by NVIDIA® G-SYNC™ technology—which was extremely well-received by media and consumers alike. At Mobile World Congress in February, ASUS introduced two innovative applications including the ZenUI which is a simple and intuitive user-interface and PixelMaster technology which is an image processing technology designed to enhance and capture extraordinary photos in any conditions.

Management Focus In 2014, ASUS will continue to lead the market through innovation and quality, with guidance from its world-class management team. In a climate of converging competition in the PC, tablet and mobile phone markets, ASUS will achieve differentiation through increased product value, increased scale of operations, and through effective marketing and communication to enter the 3-in-1 market. Our marketing teams will initiate agile multimedia campaigns to engage consumers through multiple channels of communication.

In addition to robust product development in 2014, an emphasis on product quality and marketing will help drive long-term investment and future growth. The management team will focus on expanding brand advantages and operation scales for motherboards, notebook and desktop computers. Through exceptional product portfolios and brand positioning, ASUS will continue to be a leader in the Tablet PC market. New tablet products introduced in 2014 will further expand the company’s presence in the mobile computing device market. Continued development of smart phone product lines will also be a focus in 2014, with a focus on product innovation and marketing as well as further development of channel partnerships.

Business Outlook The world of technology is characterized by change. Mobilility and cloud computing are currently two key drivers of change in the industry. Companies that focus on traditional product lines will lose market share. ASUS has a strategy of developing core competencies while focusing on innovation, and our dynamic global staff is dedicated to these goals. As a team, we will achieve business growth through industry-leading innovation and quality. We expect overall demand in the personal computer industry to gradually stabilize in 2014 while mobile computing products continue to deliver nice growth. ASUS will continue to refine and develop our core competence. We are committed to grow revenue for all product lines in 2014. Our focus on innovation, quality and user experience will ensure continued success as one of the world’s most admired leading enterprises.

Again, we would like to thank for the support from the shareholders. ASUS will continue to work and accomplish our sales goals in order to share with the shareholders.

Sincerely yours,

------Chairman

2! 2 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 II. Introduction of the Company

I. Establishment date: April 2, 1990

II. Development history

April 1990 ASUS was incorporated at 2F, 14-2, Sec. 2, Chung-Young S. Road, Beitou District, Taipei City and collected a paid-in capital of NT$30 million. April 1990 Became a direct customer of Intel (U.S.A.) May 1990 Cache 386/33 and 486/25 personal computer motherboards were popular. 486/25 was market launched with IBM and ALR synchronously and it was the milestone of computer development in Taiwan. May 1990 Expanded the facilities (instruments and equipment) of R&D department and , as the facilities expanded, recruited R&D talent for the development of EISA 486 motherboard. July 1990 ASUS completed the registration of the manufacturing facility and initiated production. The quality products made in-house were successful. October 1990 The head office and manufacturing facilities were relocated to 4F, 10, Alley 25, Lane 425, Sec. 4, Chung-Young N. Road (changed name to “Li-Te Road” by Taipei City Government in 1993) with an area of 602 pings due to business expansion. November 1990 EISA 486 motherboard, officially market-launched and shown at the COMDEX exhibition in early November, became a market-leading product. December 1990 Increased the paid-in capital to NT$80 million by cash capitalization for an amount of NT$50 million. December 1990 Generated sales revenue of NT$230 million in the first year of incorporation with 16.01% net income for an amount of NT$36.82 million.

January 1991 The 286 and 386SX were popular in 1990 while the 486-mother board technology was difficult and expensive. ASUS was in control of advanced product technology and marketing. The market demand for advanced motherboard was growing this year. March 1991 The profit of 486 in this month exceeded the profit of 386 for the first time, meaning that the 486 advanced products had become the major product of the company. April 1991 Depth was added to the management team with multiple marketing and sales talents recruited by the company to reinforce marketing capability. August 1991 The sales of high-unit-price EISA 486 product were satisfactory and this product helped the company generate millions of dollars of profit. December 1991 INTEL (USA) provided the company with O/A credit five times over the original quota. December 1991 Increased the paid-in capital to NT$150 million with retained earnings for an amount of NT$30 million and with cash for an amount of NT$40 million. December 1991 The sales revenue of this year amounted to NT$1.399 billion and net income amounted to NT$116 million.

January 1992 Monthly production exceeded 30,000 units. March 1992 Attended an exhibition in Hanover Germany to present the 32-bit SCSI interface EISA-SC100. The product was well received by customers as well as tech media reviewers, with the IC developed in-house by ASIC, the self-developed software, and the driver software.

33! WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 April 1992 Signed an agreement with AWARD for software authorization. April 1992 The business development of the company was reported in the electronic industry section of Economic Daily News. June 1992 Sales had gone up dramatically in the year before ASUS ranked in the 372nd place of the Top 500 Industries in Taiwan by China Credit Information Service Ltd., ranked in the 193rd place by manufacturing index, and ranked in the 92nd place of information electronics by Excellence Monthly. June 1992 Management Magazine had the company’s Return of Net Worth ranked in the 6th place, the company’s Return of Assets in the 2nd place, the Employee’s Average Earnings in the 19th place, and the Earnings per Dollar in the 10th place. December 1992 Monthly production of motherboard and interface card exceeded 75,000 units, representing 132% growth from the same month of the prior year. December 1992 Sales revenue for the year amounted to NT$2.18 billion representing 55.8% growth from the year before and the net income amounted to NT$205 million.

March 1993 Launched the PENTIUM (586) motherboard. ASIAN SOURCES Magazine recognized the company as one of the few manufacturers that was able to deliver this advanced 586-based mother board. April 1993 Increased the paid-in capital to NT$199 million with cash for an amount of NT$49 million. May 1993 Invested to have SMT production line setup. May 1993 China Credit Information Service Ltd. had the company’s business performance ranked in the 7th place of the TOP-500 Manufacturers in 1992 and the company’s sales revenue ranked in the 263rd place of the TOP-500 Manufacturers. June 1993 Increased the paid-in capital to NT$308.45 million with retained earnings. Public offering was arranged accordingly. June 1993 Bureau of Foreign Trade MOEA ranked the company’s importing/exporting business in the 168th place in 1992. July 1993 The Ministry of Finance recognized the company as an honest taxpayer. October 1993 The mass production of PCI486 was initiated. PCI was the new generation bus structure standard and it was a high-speed and high-tech product. November 1993 The company and the head engineer, Mr. Ted Hsu, were awarded with the “32-bit Personal Computer Milestone Award” of “Taiwan Personal Computer Ten-year Milestone Award” that was organized by Commonwealth Magazine, co-organized by the Institute for Information Industry, and sponsored by Intel for “having high-speed 486 advanced mother board developed successfully” and for being “the first Taiwanese information business to develop the fastest personal computer synchronized with the world that has helped Taiwan open up a path to the successes and helped define the competition of speed and flexibility in technology development.” November 1993 Mass production of PCI486 and Pentium motherboard was initiated. Pentium was the new generation of CPU and was the PC with the highest speed. December 1993 The first SMT production line was completed with pilot run and put into service. Another set of SMT was acquired in response to the expansion of production. December 1993 Sales revenue for the year amounted to NT$2.303 billion representing 5.6% growth from the year before and the net income amounted to NT$220.7 million.

January 1994 ASIAN SOURCES Magazine ranked the company’s technological innovation in the first place of The TOP-10 mother board manufacturers in Taiwan and ranked the company’s quality in the second place. February 1994 C.T.Mag. (Germany) had the company’s PCI rated, and with the capacity and memory of PCI Pentium and 486, the company was awarded an honorary rating. March 1994 Attended Cebit Show in Hanover, Germany, and was the only motherboard manufacturer at the show having successfully manufactured Dual Pentium, and was recognized for this by the industry and Intel. May 1994 Bureau of Foreign Trade MOEA ranked the company’s importing/exporting business in the 161st place in 1993.

! 4 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 July 1994 ASUS’s initial name was Hung-Shuo Computer Inc. In July, the company offically changed the name to ASUSTeK Computer Inc. August 1994 Increased the paid-in capital to NT$450.337 million with retained earnings. August 1994 Set up subsidiaries in the United States and Germany for marketing, service, and repair and maintenance. October 1994 China Development Industrial Bank became the institute shareholder of the company. November 1994 PCI Pentium and Dual Pentium were popular in market and exceeded NT$300 million in monthly sales for the first time. December 1994 Taipei Factory was certified with ISO 9002. December 1994 Purchased Taoyuan Lu-Chu Plant with an area of 2,417 pings and constructed a manufacturing facility area of 1,200 pings that was put into service in mid-1995. December 1994 Sales revenue of the year amounted to NT$3.36 billion representing 45.9% growth from the year before, and the net income amounted to NT$756 million.

January 1995 ASIAN SOURCES Magazine had the company’s quality ranked in the first place and the company’s technological innovation in the first place of the Top-10 mother board manufacturers in 1994, ahead of both First International Computer Inc. and Acer. May 1995 China Credit Information Service, Ltd. had the company’s business performance ranked in the 5th place of the TOP-500 Manufacturers in 1994. May 1995 The Taoyuan Lu-Chu Plant was officially put into service for production. June 1995 Increased the paid-in capital to NT$600 million with retained earnings. September 1995 CitiSelect Asia Tilt Growth Portfolio became the institute shareholder of the company. October 1995 Monthly income exceeded NT$1 billion for the first time. November 1995 Presented Pentium Pro server, work station, and motherboard. December 1995 Sales revenue of the year amounted to NT$7.87 billion representing 134% growth from the year before and the net income amounted to NT$1.95 billion.

January 1996 Purchased the head office on Li-Te Road and the building that was rented for Taipei Plant with an area of 3,159 pings. April 1996 Chung-Hua Institution for Economic Research awarded the company with “Product of the Year Award” and “Enterprise of the Year Award.” June 1996 China Credit Information Service Ltd. had the company’s business performance ranked in the 1st place of “The TOP-500 Manufacturers in 1995”. August 1996 SEC had the company authorized as Class II stock listing company. August 1996 Increased the paid-in capital to NT$1.2 billion with retained earnings. November 1996 ASUS officially went public at Taiwan Stock Exchange Corporation.! December 1996 Sales revenue for the year amounted to NT$13.327 billion, representing 69% growth from the year before, and the net income amounted to NT$3.808 billion.

January 1997 Taoyuan Lu-Chu Plant was certified with ISO-9002. February 1997 Leased Taoyuan Nan-Kan Plant with an area of 4,400 pings ready for production. February 1997 The ASUS P/I-P65UP5 was awarded with the “5th Symbol of Excellence” award by TAITRA. April 1997 Established the Nan-Kan Plant, with an area of 4,400 pings, right next to Lu-Chu Plant, for a total monthly production of 800,000 motherboards. May 1997 Increased the paid-in capital to NT$3.23 billion with retained earnings and cash. May 1997 Collected funds for US$230 million with cash in the form of overseas depository receipt GDR.

! 5 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 September 1997 Acquired automation SMT for expanding automatic-production scale over three times. September 1997 Monthly income exceeded NT$2 billion for the first time. October 1997 Purchased Quay-Sun Plant with an area of 7,900 pings for the production of new NB and CD-ROM. November 1997 Held new product presentation including NB and CD-ROM. December 1997 Sales revenue of the year amounted to NT$21.371 billion, representing 60.4% growth from the year before, and the net income amounted to NT$7.038 billion.

February 1998 Asiamoney recognized the company among the “Best Managed Companies in Taiwan.” April 1998 Finance Asia recognized the company as “Asia’s Strongest Companies.” June 1998 Increased the paid-in capital to NT$8.115 billion with retained earnings. June 1998 Monthly income exceeded NT$3 billion for the first time. October 1998 Increased the paid-in capital to NT$8.135 billion with cash for an amount NT$20 million and with NT$420 million collected. October 1998 Acquired automation SMT for expanding automatic production scale; production reaches with over one million motherboards manufactured monthly. October 1998 Presented the lightest all-in-one NB. November 1998 The company was certified with ISO-14000. November 1998 Asia Week had the company ranked in the first place of The International Chinese Enterprises 500 & Top-10 Manufacturer in 1998. November 1998 Asia Week had the company’s business performance in the first three quarters of 1998 ranked in the first place of The InfoTech 100. November 1998 Business Week (U.S.A.) had the company ranked in the 18th place worldwide and the first place in Asia of The InfoTech 100. December 1998 Completed the construction of Lu-Chu Plant with an area of 3,600 pings ready for use. December 1998 Sales revenue for the year amounted to NT$35.2 billion representing 64.7% growth from the year before and the net income amounted to NT$11.575 billion.

March 1999 Initiated the construction of Beitou II Plant for an area of 1,453 pings planned for use. May 1999 Ranked in the 21st place of Top-1000 Manufacturers in the special issue of Commonwealth Magazine. Ranked in the 2nd place of Top-50 Enterprises 50 for three consecutive years (2007~2009) in the special issue of Commonwealth Magazine. Ranked in the 6th place of Top-1000 Manufacturers as the most profitable operation in the special issue of Commonwealth Magazine (hit the mark of NT$10 billion and become the leader of information and telecommunication industry). Ranked as one of the National Top-20 Private Businesses in the special issue of Commonwealth Magazine. June 1999 China Credit Information Service Ltd. recognized the company with the honorary citation of “1999 Taiwan TOP 500.” China Credit Information Service Ltd. ranked the company in the fourth place as the most profitable business of “1999 Taiwan TOP 500.” China Credit Information Service Ltd. ranked the company in the third place as the highest earnings business of “1999 Taiwan TOP 500.” China Credit Information Service Ltd. ranked the company in the third place as the best assets-management business of “1999 Taiwan TOP 500.” China Credit Information Service Ltd. ranked the company in the fourth place as the most productive employees of “1999 Taiwan TOP 500.” Increased the paid-in capital to NT$11.449 billion with retained earnings. July 1999 Presented ASUS super thin NB. October 1999 Increased the paid-in capital to NT$11.464 billion with cash for an amount NT$15

! 66 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 million and with NT$300 million collected. December 1999 Sales revenue of the year amounted to NT$49 billion representing 39.2% growth from the year before.

January 2000 Purchased the eight pieces of land of the 4th lot, Fong-Nien Lot, Beitou District, Taipei, adjacent to the head office on Li-Te road, for business expansion with an area of 7,186 pings. Asiamoney ranked the company in the second place of “Best Managed Companies in Taiwan.” February 2000 Presented new NB L8400. May 2000 Completed the construction of Beitou II Plant with an unable area of 1,453 pings.. June 2000 Increased the paid-in capital to NT$15.671 billion with retained earnings. August 2000 Ranked in the first place of Tech 200 by Globalviews Magazine. September 2000 China Credit Information Service Ltd. ranked the company’s business performance in the third place of Top-10 Manufacturers in 1990-1999. October 2000 Commonwealth Magazine ranked the company in the first place of Taiwan Electronics and in the seventh place nationwide. November 2000 Business Week (U.S.A.) had the company ranked the company 44th place worldwide of The InfoTech 100. December 2000 Sales revenue for the year amounted to NT$70.7 billion representing 44.38% growth from the year before.

March 2001 ODC (ODC is for the certification of environmental protection without using any material that is dangerous to Ozone layer) was awarded to ASUS. June 2001 Increased the paid-in capital to NT$19.769 billion with retained earnings. June 2001 Business Weekly ranked ASUS in the 26th place of World Business 100. November 2001 Business Week ranked ASUS in the 28th place of The InfoTech 100. November 2001 Completed the construction of Taipei Plant with an usable area of 9,073 pings. December 2001 Readers of PC Magazine awarded ASUS with the “Product of the Year Award” for the motherboard, NB, CD-ROM, and VGA in 2001. December 2001 Far Eastern Economic Review ranked the quality service/product of ASUS in the fourth place. December 2001 Sales revenue of the year amounted to NT$77.9 billion, representing 10.16% growth from the year before.

January 2002 Seventeen company products were awarded the “Symbol of Excellence” this year; therefore, the company was the biggest winner of the 10th national “Symbol of Excellence” award. April 2002 Recognized as the Excellent Health and Safety Institute by Taipei City Government. April 2002 Ranked in the Top-10 of Manufacturers 1000 by Commonwealth Magazine, the Top-3 of computer and elements, and the Top-3 of most profitable businesses. June 2002 Launched MyPal A600, the first PDA supporting Intel’s 400MHz PXA250CPU; also, it was the most light-weight, thin, and functional pocket PC. July 2002 Increased the paid-in capital to NT$19.988 billion with retained earnings. October 2002 Recognized as the Excellent Health and Safety institute nationwide. Asia Week ranked ASUS in the Top-10 of Chinese Businesses 500. December 2002 The company shipped 17 million mother boards this year; therefore, one out of six computers was built with ASUS mother board. December 2002 The consolidated income of the year amounted to NT$114.7 billion, representing a substantial growth in sales.

! 7 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468

January 2003 Constructed Quay-Sun Plant with 16,976.8 pings available for use. February 2003 The design of super-thin portable dual CD-R & CD-REW SCB-2408-D was awarded by the International Forum (iF) in Germany. March 2003 Based on the powerful R&D capability and the excellent cooperation with Intel, ASUS launched Centrino NB to great attention. May 2003 After receiving the award of “Symbol of Excellence” with 20 citations, more than all competitors, ASUS was awarded the “11th Branding Taiwan” with three citations, the most of any company. This demonstrated the high quality and image of ASUS and its ability to compete in the world on behalf of Taiwan. June 2003 Purchased the assets of Elite Group in Chungli, including land, manufacturing facilities and equipment, and specific raw material through the subsidiary, ASUSALPHA COMPUTER INCORPORATION August 2003 Increased the paid-in capital to NT$22.817 billion with retained earnings. September 2003 Presented S200N Centrino NB; it weighed only 905g and was the lightest-weight NB in the world. October 2003 Presented the first 3G foldable color phone J100. November 2003 DiGiMatrix was awarded with “Taiwan Outstanding Design Award” in 2003. December 2003 The consolidated income of the year amounted to NT$195.889 billion representing a substantial growth in sales.

April 2004 Setup TPC product line (thermal conduction, power, and chassis) to provide consumers with comprehensive system solution. May 2004 ASUS W1 NB with built-in TV card and powerful multimedia software was market launched. The outstanding hair-like pattern design was awarded with multiple global awards. June 2004 Presented the light-weight, big screen ASUS J101 phone. June 2004 The industrial design team received eleven G-Mark in Japan, five iF awards and five Red Dot design awards in Germany. December 2004 Awarded with 1,048 global professional media and networking awards, second to none. December 2004 ASUS was the largest motherboard and VGA manufacturer; worldwide, one out of three computers was made with ASUS motherboards. December 2004 The company shipped 42 million motherboards and 7.8 million VGA in 2004. December 2004 ASUS became the Top-10 NB brands and the Top-5 NB manufacturers. December 2004 The consolidated income of the year amounted to NT$250.042 billion representing a substantial growth of 26% from the year of 2003.

January 2005 ASUS was the biggest winner of “Symbol of Excellence” award for two consecutive years, with all forty nominated products receiving awards. March 2005 ASUS W1 NB was awarded by iF (Germany) with the industrial design award that was known as Oscar Award in computer business. This was the first Chinese design awarded with iF. Invested in AzureWave Technologies Inc., which became a subsidiary, to manufacture office machine, electronic components, and computer and peripheral equipment, and to conduct the wholesales and retails sales of precision instrument and camera equipment. October 2005 ASUS successfully developed the first environment-friendly mother board in Taiwan. Invested in AMA PRECISION INC., the subsidiary, to conduct computer elements R&D. November 2005 ASUS was awarded with thirteen awards in the 2005 “Channel Award”

8! 8 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 competition, second to none. Invested in Enertronix, Inc., which also became a subsidiary, to conduct R&D and manufacture radio receiver and wireline communication equipment. December 2005 The company issued 59,592,835 stock shares in exchange for 15% stock shares of Advantech Co., Ltd. to achieve the goal of stock exchange and strategic alliance; with this, the company entered the industrial computer field. ASUS entered CES exhibition for the first time, introducing the concept of the “digital home.” W5A NB was awarded with CES Innovative Design & Technology Award. The consolidated income of the year amounted to NT$357.8 billion representing a substantial growth of 43.11% from the year of 2004.

January 2006 The company and Advantech Co., Ltd. each acquired 50% shareholding of Advansus Corp. on January 3, 2006 with cash capitalization. January 2006 The company’s R&D was trusted by the industry; ASUS AS-D770 was crowned as Top-50 Industrial Purchasers. March 2006 The company had stock exchanged with Askey Computer Corporation according to Merger Law with 73,662,961 shares issued for merger. Askey Computer Corporation had become a subsidiary of the company. March 2006 The company had organizational structure adjusted in response to business development. Most of the BU was defined as the Business Division for the realization of process-oriented and customer-oriented service. April 2006 ASUS W3A, W5A, and V600V were awarded with Red Dot Award for the outstanding function and fashionable and elegant design. May 2006 ASUS NB W2, W3, and V6 were nominated for “iF China Design award” Top-10. This was a great achievement for the company; evidence of ASUS’s leading position of in the computer world. June 2006 Business Weekly awarded ASUS with InfoTech 100 for eight consecutive years. October 2006 ASUS, known for creating trust and sentiment was awarded the “2005 Top-10 Taiwan Brand Value” by Business Next Magazine. December 2006 ASUS ATEC was awarded with the “7th Management of Technology Award” by Chinese Society for Management of Technology. December 2006 The consolidated income for the year amounted to NT$560.235 billion representing a substantial growth of 45.49% from the year of 2005.

January 2007 ASUS worked with Automobili Lamborghini to present the ASUS Lamborghini VX series NB high-speed version. January 2007 ASUS AS-D770 and NB were crowned as Top-50 Industrial Purchasers in 2005 by the Commercial Times newspaper in Taiwan. ASUS products were the first choice of industry, professionals, and networking users for consumption. February 2007 ASUS was awarded with three citations in MIS Best Choice by Institute for Information Industry: Barebones and server were ranked in the first place, and advanced NB was ranked in the second place. March 2007 ASUS presented the first 3.5G NB in Taiwan that led consumers entering new mobile phone era. June 2007 ASUS was awarded 39 citations in the 15th Taiwanese Excellence Awards for its excellent quality and innovation; that was second to none. June 2007 ASUS was recognized as an innovative technology company by Mercedes-Benz which co-branded the ASUS P526 “C-Class Mobile Phone” with ASUS. July 2007 ASUS announced plans to have brand name business and OEM/ODM business divided at the press conference of SEC in July 2007. ASUS was divided into three divisions, in which, brand name business was the responsibility of ASUS while OEM/ODM was the responsibility of Pegatron Corporation and Unihan Corporation as of the baseline date of January 1, 2008.

! 99 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 July 2007 ASUS was recognized by Business next Magazine as the “2007 Top-10 Brands Taiwan.” with a brand value of US$1.196 billion, representing a growth of 166% from the year of 2003. October 2007 ASUS Eee PC was market launched in Taiwan. ASUS Eee PC was popular worldwide and sold at the rate of one Eee PC every five seconds. November 2007 The environmental protection effort of ASUS was recognized for the first time; Oekom, an international reputable institute for environmental protection evaluation, ranked ASUS in first place for “2007 Environmental Protection.” Also, ASUS was the first Chinese IT industry to have received such an honor in the last fifty years. December 2007 ASUS was top-ranked in the “Sustainability Award” by the Executive Yuan, with the award presented to the Chairman of ASUS by the Minister. December 2007 Dr. Yahya AJJ Jammeh, President of the Republic of Gambia, and his 32 officers visited the head office of ASUS and showed strong interest in Eee PC. December 2007 Chunghwa Telecom and ASUS announced a strategic alliance to integrate the resources for the construction of a perfect digital center and to get involved in charity activity with 1,000 Eee PC donated to schools in the remote area of north, center, south, and east Taiwan for narrowing down Taiwan’s digital divide. December 2007 ASUS entered the optical field for the first time with BrightCam AF-200 and MF-200 presented. December 2007 The consolidated income of the year amounted to NT$755.361 billion representing a substantial growth of 34.83% from the year of 2006.

January 2008 ASUS brand-name business and OEM/ODM business were officially divided. The brand-name business was the responsibility of ASUS while OEM/ODM was the responsibility of Pegatron Corporation and Unihan Corporation with each company focusing on creating their own value. March 2008 The “Dual Hundred-Million-Plan” of ASUS was to have one hundred million NTD budgeted to win over the heart of one hundred million customers. The goal was to provide professional repair and maintenance and consulting service to more customers of ASUS. April 2008 ASUS market launched the second-generation 8.9’ Eee PC 900. April 2008 Intel and ASUS held the “Recycling Computer, Project of Hope” press conference to demonstrate collaboration between businesses and their determination and enterprise actions in saving energy and recycling for the good of the earth. April 2008 Setup ASUS Foundation to have resources integrated effectively to feedback society and to fulfill social responsibility. May 2008 ASUS Computer was awarded with the 16th “Symbol of Excellence” this year and ASUS was the biggest winner. The excellent technological R&D, the humanity technology, and the innovation of ASUS resulted in fifty-one ASUS products awarded with the “Product of the year award” at the “Symbol of Excellence” this year, in which, EeePC and R700t navigator were awarded with the “gold medal” award. Six products of ASUS were awarded with the “silver medal” awards. ASUS is second to none in the industry in the sense of quality and quantity. June 2008 10” Eee PC1000 was market launched officially with great attention received from international and domestic media while attending Computex exhibition in Taipei. July 2008 Enforced “Reverse Recycling Green Marketing Business Plan” August 2008 ASUS was the designated hardware brand for Advanced Overlocking Championship (AOCC) in 2008, with the products receiving high praise. The combination of ASUS P5Q3 Deluxe, Striker II Extreme, and ENGTX280 had broken the record by performing successfully at the extreme temperature of 100ʚ below. October 2008 With the Eee PC market launched for one year, sales are growing worldwide; on launch, we sold one unit every five seconds. The Eee PC has overturned the worldȷs thinking about mobile communication, and has successfully led the minicomputer market. EeePC is named best seller of 3C products this year by

! 10 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 numeroud international media. ASUS market-launched the state-of-the-art Eee PC S101 this month targeting global business commuters and fashion aficionados. November 2008 ASUS Eee Family promoted new products including the all-in-one touch-panel screen computer Eee Top ET16 series with 15.6” touch big screen. The computer can be operated with screen touch for an effective interaction and operation with the device that is different from conventional table-top computers. November 2008 The tough Japanese market was conquered by the easy-to-learn and easy-to-use Eee PC! According to the survey in November by the most creditable 3C survey company, Business Computer News (BCN), EeePC was the champion in sales of Notebook and named the most popular product of the year by the Japanese lifestyle and fashion magazine DIME. December 2008 ASUS Eee PC was named the product of the year by Forbes and Stuff Magazine in the U.K. The Japanese lifestyle and fashion magazine Dime gave the Eee PC top product honors. Sweeping from the west side to the east side of the Atlantic, America’s benchmark on-line retailer Amazon also selected the Eee PC as the most popular Christmas gift, and it was recommended by 13 different medias outlets as the best gift to give. All noted how consumers loved the high mobility of the Eee PC. Spanning Japan, Taiwan, Europe and the U.S., there is no place in the world that has not felt the effect of the Eee PC.

January 2009 ASUS was top ranked according to the 24th “consumers’ ideal brand” survey by Management Magazine V. 451 and the “businessman’s ideal brand” of Today V. 626. February 2009 ASUS Computer and the world leading GPS brand Garmin announced the establishment of a strategic alliance to launch a joint Garmin-ASU-brand smart phone that combines the leading smart phone and GPS technologies. March 2009 Eee PC series had been the top-three models on the shopping list of the benchmark online mall “AMAZON” for multiple times. The newly launched 1000HE model of Eee PC™ had taken up the top-two spots with successful pre-order, evidenc of the popularity of Eee PC. ASUS owned the heart of American consumers with Eee PC™. March 2009 Global design prize “Red Dot” was awarded in Germany. ASUSTeK had been awarded “Product Design 2009 Winners” this year for the five products of Eee PC S101, Eee Keyboard PC innovative computer, S121 notebook, P30 notebook, and innovative “chocolate keyboard.” April 2009 ASUSTeK was the biggest winner in the 3rd Annual Taiwan Excellence Award competition for three consecutive years where a total of 53 products received the Excellence Award, including the Eee PC, which S101 was awarded the “Gold Award” this year while ASUS Bamboo U6V and P552w smart phone were awarded with “Silver Awards.” April 2009 ASUSTeK launched the energy-saving motherboards P5Q PRO Turbo and P5Q Turbo on the Earth Day. P5Q PRO Turbo and P5Q Turbo were designed with unique Xtreme Phase power design and ASUS 2nd generation EPU smart energy-saving chips to save power consumption; They allow the system to monitor itself automatically, adjust the power supply, reduce temperature, and increase power efficiency up to 96%. April 2009 ASUSTeK was held up to the world the gold standard for green products by CNN and TIME Magazine. Eee PC 1000HE was appraised by CNN in the program of “Your Green World.” ASUS Bamboo U6V was awarded” “Green Design 100” by TIME Magazine for the artistic design and environmental protection value. May 2009 ASUSTeK introduced the thinnest mini notebook, Eee PC 1008HA Seashell! Seamless Eee PC 1008HA Seashell gave a sense of fashion, which was originated from the idea of seashell; weighted only 1.1kgs, presented a sexy, slim body only 18mm thick, and featured a 92% Baby Touch keyboard and a power-saving 10.1” LED display. May 2009 ASUSTeK was ranked No. 1 for “product and service quality” and “innovation” in the “Asian Business 200” by Wall Street Journal in Asia. ASUSTeK received the highest ranking in the 3C industry under “domestic industry” in the “Asian

! 1111 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Business 200.” June 2009 ASUSTeK was the winner with three products including “Game Republic” ASUS G51 Notebook, digital Eee family member EeeNAS PC, and Garmin-Asus nüvifone G60 navigator mobile phone awarded in the “Best Choice of COMPUTEX.” June 2009 ASUSȷs pioneering motherboard was the first to pass Energy Star 5.0 certification. ASUSTeK was certified for professional energy-saving for the second time since the initial recognition as the gold standard for green products manufacturer by CNN and TIME Magazine. September 2009 ASUSTeK introduced the brand new ASUS UL Series, demonstrating Turbo 33 duo-core effect, 12-hour long-lasting power, and a super-thin notebook that broke the myth of permanence and efficiency conflict and established a brand new standard for mobile computation. October 2009 ASUSTeK was recognized for innovation in energy-saving effort. ASUS computer was the first one in the world to receive third party validation of “Environmental Product Declaration (EPD)” and the first to win “carbon footprint (carbon neutrality)” certification. ASUSTeK was the first enterprise in Taiwan to receive the gold environmental protection logo of EPEAT of the United States; the company is also the first top-ten computer brand in the world to receive the “EU Flower” certification. ASUSTeK has dedicated itself to the principles of green environment, carbon-reduction, and care for the Earth. December 2009 The consolidated sales revenue for the ASUS Computer brand was NT$248.2 billion from the year of 2009.

January 2010 Five ASUS products were awarded with the innovation award of the CES in 2010 including ASUS Videophone Touch AiGuru SV1T Skype, ASUS MATRIX GTX285/HTDI/1GD3 video graphics array, Disney Netpal™ Eee PC MK90H notebook, ASUS MS238H super thin LED display, and ASUS RT-N16 flagship wireless router. January 2010 ASUS P6X58D Premium was the first USB 3.0 motherboard in the world to receive USB-IF (USB Implementers Forum) certification and led consumers entering USB3.0 high-speed transmission era. February 2010 The Company held its extraordinary shareholders’ meeting on February 9, 2010, and passed a resolution for the spin-off of its ODM business. This resolution required the Company to spin off the ODM assets and business (the Company's 100%-owned long-term equity investment in Pegatron) to the Company's wholly owned existing subsidiary Pegatron International Investment Co., Ltd. Pegatron International Investment Co., Ltd. will issue new shares to the Company and the shareholders of the Company as consideration. The Company will have a capital reduction of $36,097,609 or a capital reduction of approximately 85%. It is expected that the Company will acquire approximately 25% of the equity in Pegatron International Investment Co., Ltd. and that the shareholders of the Company will in total acquire approximately 75% of the equity in Pegatron International Investment Co., Ltd. The spin-off date is expected to be June 1, 2010. February 2010 ASUSTeK introduced the first Smart3 Garmin-Asua M10, the perfect smart phone for navigation, daily life, superpower community function, and a multi-functional Windows smart phone. February 2010 ASUSTeK introduced the first USB 3.0 ASUS N series mobile video flagship notebook with built-in SonicMaster sound technology. It is the gold standard of mobile video and audio theater. March 2010 ASUSTeK was awarded with international industrial design prizes again – the chocolate keyboard was awarded with the gold medal of iF design in Germany. ASUS EeePC™ seashell, excellent superlight US series and UX30 notebook, EddKeyboard PC, fashionable CG 5290, super thin blue burner SBC-04D1S-U, and professional and compact P30 notebook -- seven in total -- were cited with the iF Awarsd product design prize. ASUS’s quality in design sets the world standard again! April 2010 Participated in Taiwan Pavilion Shanghai Expo2010 with the high-performance computer BA5190 exhibited for light screen performance, water table lamps,

! 1212 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 and window on Taiwan. The high-performance machines were used to display the beauty of Taiwan to the guests visiting the Taiwan Pavillion from all over the world. April 2010 The 18th “Symbol of Excellence” was awarded to ASUS, the biggest winner of the year; also, Gold Medal was awarded to EeeKeyboard PC including five nominations of Gold Medal and 36 “Symbol of Excellence” Awards. The biggest winner of the “Symbol of Excellence” for seven consecutive years; also, awarded with the “Outstanding Award” of the year. June 2010 The G51 3D notebook of ASUS was awarded the 2010 Taipei International Computer “Product of the Year Award” and “Display & Digital Entertainment Award.” Eee PC™ 1015PE was awarded the Red Dot Design Award in Germany and “Green ICT Award” at COMPUTEX 2010. AP-N53 Mini Dual Band Wireless Router won the recognition of the review panel with its light, compact, portable, and powerful network shareware. AP-N53 Mini Dual Bank Wireless Router is the Best Choice, with four awards awarded consecutively. August 2010 ASUS marketed the “Own SonicMaster and enjoy the sound of music” SonicMaster notebook. Mr. David Lewis of Bang & Olufsen was the designer. NX90 gave not only extreme video shock but also stylish classic design elements. August 2010 In recognition of ASUSȷs dedication to environmental protection, energy saving, and society involvement for years, ASUS was awarded with the 2010 Top-Ten Corporate Citizenship Award by CommonWealth Magazine. September 2010 ASUS was awarded with the Top-Three Brands of the “2010 Top-Ten Taiwan Brands” by the MOEA, Foreign Trade Association, and Interbrand. The overall brand value had increased up by 5% from the year of 2009 for a record high of US$1.285 billion. September 2010 Twelve products of ASUS were awarded with G-Mark Design Award in Japan including six notebooks, four Eee PC notebooks, and one monitor and motherboard. October 2010 ASUS constructed “Florabot” technology view for the four chambers of the dream house at “Taipei Expo2010.” December 2010 ASUS was recognized in the category of industrial design and visual communication design for the Eee PC 1008P KR and NX90 screensaver at the 2010 “Golden Pin.” December 2010 Brand sales in 2010 amounted to NT$321.3 billion. ! ! ! January 2011 ASUS was the largest winner at CES, recognized with eight CES product innovation awards. ASUS outperformed others in the fields of personal electronics, computer hardware, home network, and digital audio, evidence of ASUS’s leading role in digital life. January 2011 ASUS was recognized with eight awards at iF Product Design in Germany, and was the biggest winner of the year. The winning products included Rampage III Extreme motherboard, Eee Note, Eee PC KR, SBW-06C2S-U Burner, RT-N56U wireless router, game notebook G53/G73, N-series audio notebook, and U36 Ultrathin notebook. March 2011 ASUS introduced the Eee Pad Transformer of Android® 3.0 operating system. The Eee Pad Transformer featured the “deformation” function. Eee three-in-one base and multiple expansions, superior to any other tablet PC in market. Transformer also includes (USB 2.0/SD/micro SD slot) and 16-hour UPS. March 2011 g The first green brands chart was introduced in Taiwan, with a focus on ten industries and 155 brands to encourage the green brands for the good of the society taking as a whole. ASUS outperformed others and was recognized in the category of information industry with the “Super Green” award. April 2011 ASUS participated in the largest design convention in the world: The design week in Milano Italy with the theme of “Senses Remix” embracing all kinds of sensory experience, directing visitors to explore how technology enrich hearing sense, sense of sight, and sense of touch. The exhibition center was the best ever. ASUS was on the Top-Ten list of the Elita Award.

! 1313 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 April 2011 The Gold Medal and Silver Medal of the 19th “Symbol of Excellence” were awarded to the 45 products of ASUS, the biggest winner of the year. April 2011 The 2011 Energy Star Certification was held in Washington D.C. in the United States. ASUS was awarded with “Excellence in Efficient Product Design”. The exclusive ASUS developed Super Hybrid Engine (SHE) with super energy-saving techniques has been appraised by the Environmental Protection Agency (EPA). May 2011 ASUS Eee Pad Transformer won the 2011 Taipei Computex Best Choice Award in category of the Best Choice of the Year, Best Design Award and the Best Choice in “Computer and Systems.” The world’s first halogen-free monitor, VW247H-HF and Bamboo series notebooks, U43SD were awarded with the Green ICT Award. The o!Play Gallery high-speed USB 3.0 player was awarded Best Choice in the category of “Display and Digital Entertainment” while the Two-Way HDMI Streaming Media Center WAVI won the Best Choice in the “Telecommunication category.” ASUS outperformed the competition with seven awards. June 2011 ASUS agreed to establish the Shou Yang Digital Technology Co., Ltd with AAEON Technology for M&A, based on the consolidation date of June 1st, 2011. Shou Yang was the surviving corporation after the merger and acquisition, the company was renamed AAEON Technology on July 4th, 2011. ASUS Group is holding 65% of the integrated ownership. June 2011 ASUS introduced its new branding vision “In Search of Incredible.” which was incorporated in the ASUS N series and debuted with Jay Chou’s special version of notebook, exhibiting the cross—boundary interaction of technology and arts. July 2011 The TAITRA organized the “Top 100 Taiwan Brands” as part of the centennial celebration of the founding of Taiwan. ASUS products were recognized by the judgers and consumers to be selected as one of the top 100 Taiwan products. September 2011 ASUS was ranked as the top 3 international brands of Taiwan for the 9th consecutive years, the market value of the brand is valued at NT1.637 billion. October 2011 ASUS synchronized the release of the latest ZENBOOKš super-slim notebook around the world. Chairman Jonney Shi first released the product in New York, followed by London, Milan and Taipei. The synchronized global disclosure. November 2011 Famous international composing singer, Jason Mraz visited ASUS headquarters in Guangdu and collaborated with ASUS’s “In Search of Incredible” November 2011 ASUS cooperated with NVIDIA and launched the world’s first 10.1-in Android-based tablet PC carrying NVIDIA® Tegra® 3 4-core processor. The product, equipped exclusively with the ASUS Eee keyboard base, inherits the concept and spirit of “transformation” from ASUS, and exhibits exceptional action and battery life. November 2011 ASUS announced its major deployment in cloud computing by launching the “ASUS Private Clouding” to integrate clouding platform, enterprise application software, and comprehensive solutions for server systems, so that enterprises can quickly build exclusive private clouds with all-in-one convenience and safety. December 2011 ASUS officially released the worlds’ first 4-core processor carrying NVIDIA® Tegra® 3 while exhibiting the Google Android 4.0 ICS (Ice Cream Sandwich) based ASUS transformation tablet PC for the first time. December 2011 Brand sales in 2011 amounted to NT$350.3 billion.

January 2012 ASUS won six product innovation awards in CES exhibition, in the categories of wireless portable, personal electronic products, audio equipment, computer hardware, and components. Padfone was awarded with the Best of Innovations Award in the category of wireless portable products, demonstrating ASUS’s leadership in the field of digital life products. January 2012 ASUS was the biggest winner for the 9th consecutive year in the 20th Taiwan Boutique Awards; a total of 50 products received awarded, while 7 products were finalists for the Golden Quality Award. January 2012 The National Center for High-Performance Computing adopted ASUS

! 1414 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ESC4000 server to complete the establishment of the largest GPU super computer in Taiwan. It was the first time ASUS was listed (in 234th place) in the global Top 500 super computers, and in the 37th place in the Green 500 Super computers category. February 2012 ASUS released the latest Padfone and multiple tablet PC to the theme of “Incredible Innovation Endless Possibilities” at the Mobile World Congress in Barcelona. March 2012 ASUS held a global seminar in Taiwan on the brand-new Z77 motherboard series, by exhibiting multiple exclusive innovation techniques applying the technology of the Intel® 7 motherboards; these innovations brought the full potential of the motherboards into play. April 2012 ASUS announced the series “Happiness 2.0” with new laptop standards, featuring the five dimensions in Beauty, Sound, Touch, Instant On, Instant Connect, and Cloud, which aim to comprehensively enhance user experience. May 2012 ASUS was awarded with HSPM certificate (Hazardous Substance Process Management) from IECQ becoming the world’s first computer company to received the prestigious awarded. June 2012 In the 2012 Best Choice competition, ASUS again won several awards in six categories. ASUS Transformer Pad Infinity and PadFone won the Best Choice Gold Awards in the Computer & System category, and Innovative and Smart Mobile Device catgories. Eee Box EB1033 also won the Green ICT Award with recycling rates as high as 90%. The ASUS P1 LED Projectors and O!Play Smart TV were awarded with Best Choice in category of Display & Digital Entertainment. Moreover, EA-N66 Dual-Band Wireless-N900 Ethernet Adapter won Best Choice in category of Computex. June 2012 ASUS cast the magic of “transformation” again at Computex by launching ASUS TAICHI, Transformer AiO, Transformer Book, and a new member to the transformer Tablet family, Vivo Tab and VivoTab RT, as well as the borderless technical design of screen MX 289H/239H. June 2012 For the first time, ASUS cooperated with Google to develop the Jelly Bean Nexus 7 Tablet with the latest Android 4.1 Jelly Bean operating system. Nexus 7 combines the robust hardware design power of ASUS and the latest Google software service, integrating the outstanding hardware/software combination to create market-changing advantages. October 2012 ASUS released the PadFoneš 2 in Milan and Taipei in a synchronized global presentation. The phone is noted for being highly intuitive and convenient for consumers. October 2012 ASUS released the latest series of products carrying Windows 8 operating system. Chairman Jonney Shi first released the product in New York, followed by CEO Shen Zhen in Taipei, driving new products such as ASUS TAICHI, ASUS Transformer AiO, and ASUS Transformer Book to new peaks. December 2012 Brand sales in 2012 amounted to NT$413.1 billion.

January 2013 Fifteen ASUS products received Innovation Awards at the CES exhibition. The winning product categories covered innovative design and technological scope, including premium game hardware and accessories, computer hardware and components, computer peripherals and equipment, tablet PC, and e-readers, mobile computing devices, display, and wireless portable products. February 2013 Eight ASUS products won the iF Design, again demonstrating the international recognition for ASUS’s design capability. . February 2013 MWC listed the tablet PC product in its Global Mobile Awards 2013 for the first time and ASUS Nexus 7 was the first Taiwanese tablet PC to win the award from MWC. March 2013 ASUS won 8 design awards again from the announcement of Red Dot Award. April 2013 ASUS collaborated with Taipei City Government to build Taipei iCloud providing five cloud services, including “Citizen Cloud,” “Enterprise Cloud,” “Education Cloud,” “Health Cloud,” and “Open Data Cloud” to offer diverse and convenient cloud applications for Taipei citizens.

! 1515 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 April 2013 ASUS collaborated with UniMax Electronics Inc. to develop the “Smart Navigation & Infotainment System.” The system was first introduced to Toyota electric vehicle through the “Sun Moon Lake Scenic Area Smart Electronic Vehicle Pilot Project.” April 2013 ASUS was again the biggest winner in the 21st Taiwan Excellence Awards and has received the most awards in 11 consecutive years, with a total of 41 products receiving awards. Of particular note; PadFoneTM2 was awarded with Gold Award and ASUS TAICHITM awarded with Silver Award. April 2013 ASUS was awarded with the “2013 Young Generation Brand Survey” from the 30s Magazine and outperformed in the category of laptop computer for the fourth year in succession. The brand image of ASUS is again recognized through the first place award in “Most Favorite Brand.” May 2013 ASUS joined Chunghwa Telecom to expand the cloud service market, offering innovative and diverse cloud services to consumers through personal cloud, family cloud, health cloud, and creativity cloud. ASUS also launched multi-monitor and digital content integration to upgrade cloud experience countrywide. June 2013 ASUS presented “WE TRANSFORM” at Computex stressing ASUS’s continuous innovation in leading digital reform, and conveying its pursuit of unparalleled brand spirit. ASUS launched an epoch-marking innovative transformer product, the ASUS Transformer Book Trio. Carrying Windows 8

and Android dual Operation Systems, it is the first transformer product in the world that integrates laptop, tablet PC and desktop computer in one. Also introduced: the “ASUS Transformer Pad Infinity” which offers ultimate specifications and performance; the “Fonepad Note FHD 6,” a light, compact and portable mobile phone tablet PC equipped with entertainment, communication, and handwriting function; the “MeMO Pad™ HD7,” which

leads in the mainstream of stylish tablet PCs, and the “VivoPC,” “VivoMouse” and wireless router RT-AC68U Router.” Leading in design and innovation, all were exhibited at the Computex exhibition. June 2013 ASUS launched motherboards for gaming desktop PC’s carrying the latest 4th generation Intel Core processor. The POSEIDON Graphics Card also made its debut featuring a dual fan hybrid cooler. June 2013 ASUS’s digital service was recognized by Digital Times and was awarded the “Digital Service Bench Enterprise.” July 2013 ASUS partnered with the Industrial Development Bureau (IDB) under the Ministry of Economic Affairs to establish the “Taiwan Digital Mega Mall,” a new cloud computing services marketplace. July 2013 ASUS launched a new-generation Nexus 7 with Google, which carries an innovative built-in wireless charging function and comes with 1920x1200 Full HD (323ppi) to become the leader of 7” tabletPC. July 2013 Adopting ASUS ESC4000/FDR G2 Server was adopted by, two super computers, SANAM and Seneca Data Cluster ranked 52th and 364th place respectively in the TOP500 Supercomputer list in 2013, for high-powered performance and ultimate processing speed. At the same time, the two products comply with eco-friendly standards, receiving recognition through the 4th and 194th place on the green500 org list. August 2013 At the opening of new-generation “Action @ Pavilion of Dreams,” ASUS’s PadFone Infinity transformed into the “Dream Time Machine,” integrating six elements, namely interactive technology, art, aesthetics, design, literacy, and social care with smart mobile device to connect all visitors during the course of situations inside the pavilion. August 2013 Leading in the motherboard brand, ASUS re-established a new milestone by adopting Z870C motherboard with Intel Z87 chipset to become the world’s first certified motherboard for WINDOWS 8.1 WHQL. September 2013 ASUS Transformer Book Trio was introduced during the Intel Developer Forum by Chairman Jonney Shih. The brand-new mainstream ASUS Transformer Book T100 is the first world’s first device integrating laptop, tablet PC and desktop PC all-in-one. The ASUS Transformer Book Trio was simultaneously introduced in San Francisco, USA. September 2013 ASUS Foundation donated 2,000 tabletPC to digitally disadvantaged areas and

16! 16 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 families in Taiwan and overseas via the Ministry of Foreign Affairs, Ministry of Education and Tzu Chi Culture and Communication Foundation. All level of education, libraries, residents in remote areas and children of low household income will benefit in nine allied countries from this donation. September 2013 ASUS officially launched the new PadFone™ Infinity in Taiwan, a prestigious new flagship transformer mobile phone for the high-end smart mobile telecommunication market. September 2013 ASUS ROG launched the first mini-ITX based gaming computer mother board – MAXIMUS VI Impact. Unlimited by PCB size, ASUS builds the Impact Power with 8+2 digital power supply design with vertical erection to provide the most superior over-lock control. September 2013 ASUS participated in the 2013 Taiwan Designers’ Week, with the ASUS Design Center featuring “Capture – In Search of the Moment” to explore surprising and touching beautiful moments in life through the pursuit of aesthetics whose context is hidden in both tangible and intangible things. Through a dynamic vision of technology progress, ASUS builds an imaginary blueprint of literacy and design, accomplishing ASUS’s brand spirit “In Search of Incredible.” October 2013 ASUS released the new 4K Monitor PQ321 in Taiwan. The product comes with a surprising 3840 x 2160 extreme resolution (140 ppi), equivalent to 4 times Full HD (1920 x 1080). The display screen features a wide-screen ratio of 16:9 that even supports 1-bit RGB Color Depth, offering bright and exquisite images while the color performance is natural and lifelike. October 2013 ASUS was awarded with First Place for 2013 as the “Most Prestigious Benchmark Company in Taiwan” in the category of Appliances and Information Service Industry from CommonWealth Magazine. ASUS demonstrated outstanding performance in 10 competency indicators including forward-looking and innovation, talent fostering, customer experience, business performance, and citizen responsibility. November 2013 ASUS was top ranked in the “Ideal Brands for Business Elites” category of laptop computer awarded by Business Today for the sixth consecutive year. November 2013 When the list of winners for 2014 CES Innovation and Engineering Awards was announced, ASUS again broke all records by taking over 16 Product Innovation Awards in hardware, software, handheld, network communication, and peripherals, demonstrating the innovation superiority of ASUS. November 2013 ASUS was awarded the top 3 international brands in Taiwan for the 11th year in a row. In 2013, ASUS brand value again hit a record high, reaching $1.711 billion US, establishing a new milestone for ASUS’s corporate philosophy of “Pursuit of Unparalleled.” December 2013 ASUS has remained in the top three Innovative Companies in the Taiwan survey conducted by Digital Times for three consecutive years, demonstrating the continuous development of ASUS’s “Search of Incredible” that focuses corporate attention on innovative performance. December 2013 In the 22th Taiwan Excellence Awards revealed in 2013, ASUS received the greatest number of awards for the 11th consecutive year. Among the 50 products awarded, six products received the Gold Award, including: PadFone mini 4.3” that can be held in one hand, Fonepad 7, a mobile tablet combining entertainment and communication, perfect Transformer AiO Computer P1081 series, ET2221I/ET2020I All-in-One computers, portable LED P2 Projector, and VN279Q LED Monitor featuring narrow bezel. December 2013 Brand sales in 2012 amounted to NT$421.4 billion.

January 2014 At the 2014 CES, ASUS released the smart ZenFone with exceptional product personality; new transformer PadFone mini; the transformer PadFone X in joint cooperation with AT&T; the Transformer Book Duet (TD 300), and ROG Swift PG278Q WQHD monitors exclusively designed for computer gamers. This broad array of products reinforces the depth of ASUS’s design powers and commitment to innovation and the brand spirit of “Pursuit of Unparalleled.” February 2014 ASUS presented two major applications at the 2014 Mobile World Congress

! 1717 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 (WMC): the user interface of ASUS ZenUI smart mobile device and PixelMaster image processing technology. The intuitive ZenUI brings to consumers a brand-new system interface for user experience, while the PixelMaster image processing technology provides more exquisite and lively images. March 2014 ASUS outperformed in the 2014 iF Awards, receiving awards for 11 products among the 4,352 products from 51 participating countries. ASUS also received highest honors in design for three major project categories. The Computer Category products that were recognized include: MeMO Pad HD 7 tabletPC; Transformer Book Trio; ZENBOOK / ZENBOOK NX laptop; ASUS PRO PU Business Laptop; G10 Desktop PC; PA Professional Display; VivoMouse, and ASUS ROG MAXIMUS VI FORMULA Motherboard. The Telecommunication Category of products include the PadFone mini. The Multimedia Audio/Video Category included the ASUS S1 portable mobile power LED projector.

! 1818 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 III. Corporate governance report

I. Corporate Organization (I) Organization Chart

Effective date: 2013.12.31



19!

19 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 (II) Department Function Description

CEO Plan and manage the company’s strategies, draft up operating objectives, direct and supervise the operation of business units. Corporate Sustainability Office Integrate green environment, social charity, and international enterprise ongoing protocol to construct the core competence of an enterprise for long-lasting business operation. Audit Office Audit the company’s system and enforcement of internal regulations, procedures, and authorization with corrective actions offered.

Stock Affairs Office Be responsible for manage the company and subsidiaries its stock affairs and also arrange and execute the board meetings and shareholders' meetings and related matters. Lean Management Office Provide professional consulting service, reinforce lean management, and pursue wonderful innovation and quality perfection.

Da Vinci Innovation Lab. Be responsible for the company’s technology and innovative product development. Quality Committee Integrate overall and companywide product R&D and customer service; also, offer suggestions and guidance for process improvement and establishment in order to upgrade product quality. Systems Business Group Be responsible for managing the R&D and operation of system related product lines. Open Platform Business Group Be responsible for managing the R&D and operation of component related product lines. R&D Center, ASUS Design Center, Firmware R&D Center, EM & Wireless Communication R&D Div., ASUS Mobile Application eXperience Center and Power R&D Div. Develop the common R&D technology need by business units. Customer Service Center Provide customers with comprehensive service and total solutions. Administration Center Arrange the planning and enforcement of the company’s finance, accounting, regulatory, administration, and public works Human Resources Division Be responsible for global talent management and managing employee satisfaction. MIS Center Plan and implement IT infrastructure to support business strategy and growth. Investment Division Arrange planning and investment in accordance with the company’s vision and development. Cooperate Marketing Division Be responsible for total brand management and Corporate Marketing planning & implementation.

20 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 20! 2nd 2nd 2nd consanguinity consanguinity consanguinity consanguinity consanguinity April 19,2014 Shih, Tsang Tsang, Jonney Jonathan Jonathan consanguinity consanguinity L.H. Yang L.H. L.H. Yang L.H. Jonney Shih Jonney

Title Name Relation Vice Vice None None None None None None None None None None None None None None None None None None None None None Executives who are spousesExecutives secondwho or are Chairman Chairman Chairman Chairman Supervisor Supervisor None Note 4 Note 5 Note 6 Note Note 7 Note Note 1 Note 2 Note 3 Note 8 Note 9 Note Current position company with other

ASTP ! -! !

Experience (Education) Experience CorporateVice President MBA of National Chiao Tung University TungUniversity Chiao ofNational MBA BusinessPresident of ACER Division’s University MBAof Houston Ltd. Co., Computer of Youngmen President Engineering Institute, Electrical Graduate University Taiwan National of Manager ACER DepartmentOf Mathematics, Tamkang University Specialistof Shi-Chin Industry ofEMBA National Chengchi University Engineerof Won-Chuan Co. Ltd. Institute of Computer BostonUniversity Engineering of Engineerof ASUS (USA) National Science, Instituteof Computer ChiaoTung University ŋŶůŪŰųġŗįőįġŰŧġłŤŦų National Ph.Dof Business Management, ChengChiUniversity Minister,MinistryofPolitical Deputy the Finance,R.O.C. Ph.DStanfordof Law, (U.S.A.) University Shin ProfessorUniversity of Hsin Law, ChinaMedical of Department Medicine, University of theDepartment at AttendingPhysician MingYang Obstetrics Gynecology, & Hospital 0 0 0 0 0 0 0 0 1! 1 1! 1 0 0 0 0 0 0 0 0 their name theirname Sharesby held other in persons 0 0 0 0 21 11,760 0.00 Shareholdingof spouseand minors 0 0.00 0 Currentshareholding resident, Junior VP, and department heads department and VP, Junior resident, 0 0.00 elected 80,774 0.0175,094 107,019 0.01 0.01 99,202 8,233 0.01 0.00 805 0.00 114,174 0.02 157,527 0.02 12,275 0.00 Shares Shares % Shares % Shares % Shares % Shareholdingwhen first elected Date of Date 1994.04 14,584,5811999.04 2.36 30,093,638 1,166,4702002.05 4.05 0.19 1,676,155 1,423,093 0.272008.06 0.19 0 3,026,3092011.06 0.41 0 585,3132011.06 0.08 2012.06 100,5922005.06 0.01 100,5922005.06 0.01 1,3222005.12 0.00 0 2,007,863 0.33 0 1,612 4,005,092 0.00 0.55 0 3 3 3 3 3 3 3 3 3 3 Term Note 10 Note 2011.06 2011.06 2011.06 2011.06 2011.06 (appointed) Date elected Date ! ! 1. Directors and Supervisors Yang Tsang Cheng Jonathan S.Y. Hsu JoeHsieh Tze-Kaing Chung-Jen ! ! (I) Directors and Supervisors and Supervisors (I) Directors Title Name Vice II. Directors, Supervisors, President, Vice P II. Directors, Supervisors, President, Director JerryShen 2011.06 Director Chen Eric 2011.06 Director Director Director Hu Samson 2012.06 Chairman JonnyShih 2011.06 Chairman Supervisor Supervisor Supervisor L.H.Yang 2011.06

21 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 *) ASUS NEXT ǵ Independent ǹ 3 3 3 3 Hour d AGAITECHd HOLDING LTD. ! logy Co., Ltd.(*)Co., logy nductor Corp., AGAIT TECHNOLOGY (H.K.) , AAEON TECHNOLOGY INC., SITI, Youngmen WAVEFACE HOLDING COMPANY LIMITED ǵ ED, ASUS GLOBAL PTE. LTD., ASUS TECHNOLOGY Course Title heng Venture Capital Corp., Hua-Min Investment Co., Ltd. and Investment Co., Ltd. International Financial Reporting Standards Standards Reporting Financial International Governance of Corporate Listed Company Independent Director Director Independent Company Listed Workshop Competency .,LTD., NATIONALFIBER TECHNOLOGY(*) –SHIHCHUN and NATIONAL( ION, AGAiT Technology Corp. oTouch Technology Inc., CHIEN KUO CONSTRUCTION CO., LTD. , 2014. , th td., WAVEFACE INC., ASUSTOR INC., ASUSTEK HOLDINGS LIMITED d., AGAiT Technology Corp., UPI Semico UNIMAX HOLDINGS LIMITED ǵ ndDirector of Kinsus Interconnect Technology Corp. ǵ ! ntureCapital Corp. and Hua-Min 22 RONICS INC., ASUS TECHNOLOGY PTE. LIMIT Sponsor Director ofDirector ASUS COMPUTER INTERNATIONAL. ǹ rp., Hua-Min Investment Co., L ERTRONIXHOLDING LIMITED, ENERTRONIX INTERNATIONAL LIMITED an CHANNEL PILOT LIMITED , , ASUS TECHNOLOGY INCORPORAT ǵ TAIWAN CORPORATE CORPORATE TAIWAN ASSOCIATION GOVERNANCE c., ASUS TECHNOLOGY INCORPORATION, AAEON TECHNOLOGY INC., Hua-C are “rightsthe with reserved.use” to Date 2013.10.23 2013.10.23 2013.05.28 2013.05.28 Exchange Stock Taiwan GY INC., Enertronix, Inc., International United Technology Co., Lt Inc., Hua-Cheng Venture Capital Co ., AAEON TECHNOLOGY INC.,Hua-Cheng Ve DEEP DEEP DELIGHT LIMITED Huiyang Private Equity Fund Co., Ltd, RITEK CORPORATION, eTurb ǵ Directoroffollowingcompanies: the GOING CHAMPION ENTERPRISECO ǹ ! y’sname or individual’s name. SHINEWAVE INTERNATIONAL INC. , 2012, with similar term2-year asthe directorselected fromthesame year untilJune 8 th Tze-Kaing Yang Tze-Kaing Chung-Jen Chung-Jen Cheng ASUS HOLLAND B.V. nd eChem Solutions ndeChem Corp., Independent supervis ofTaiwan,or Apacer Director of LOTES a etable exclude trust shareholdings that ! ! Englishtransliteration ofcompan Title Name Supervisor Supervisor 2. Education and training of directors and supervisors SYSTEM LIMITED. INTERNATIONAL LIMITEDǵ Directorof ASROCK Incorporation andDBS BANK. (HONGKONG) LIMITED, ASUS TECHNOLOGYHOLLAND B.V., ASUS MIDDLE EAST FZCO, ASUS TECHNOLOGYPRIVATE LIMITEDHSIN-HO and Biotechno Directorof thefollowing companies: AxusMicrosystems Inc CORPORATION LIMITED,INTERNATIONAL UNITED TECHNOLOGY CO., LTD., EN ComputerCo., TeYang Ltd., Tech Inc., Ming-Chun Computer(*) andeCrowd Media, Inc. Director of the following companies: ASKEY, Axus Microsystems In ASUS COMPUTER ASUS INTERNATIONAL. Director of the following companies: ASKEY, Note10: Chairman Hu wasSamson elected on June 12 Note9:Independent Director of Wistron a Note5: Director of Enertronix, Inc.and UPISemiconductor Corp. Chairman6: Note ofKUO-CHENG ENTERPRISECO., LTD.(*) Director7: Note of ASUS CLOUD CORPORATION. Note 8: Director of the following companies: Yangtze Associates, Note 4: Chairman4: Note ASUSoffollowingcompanies: the CLOUD CORPORATION, ASUSCOMPUTER GmbH Note 3: Chairman of the following companies: ASMEDIA TECHNOLO Note 2: Chairman of the following companies: ASUS TECHNOLOGY IN CORPORATION, UNIMAX ELECT

Note12:(*) Standards forthe Note11: The shareholdings stated in th Note 1: Chairman of the following companies: Axus Microsystems

22 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 3. Professional knowledge and independence of Directors and Supervisors

With over five years of job experience and the Independence (Note) Condition following business qualification Teachers of Judge, prosecutor, Also an

public or attorney, With job independent private colleges accountant, or experience in director of

for the subject business commerce, other public of commerce, salespersons passed law, finance, 1 2 3 4 5 6 7 8 9 10 company Name law, finance, national exam & accounting, or accounting, or certified specialists business business or technicians Jonney Shih 3 3 3 3 3 0 Jonathan Tsang 3 3 3 3 3 3 0 Jerry Shen 3 3 3 3 3 3 3 3 0 Eric Chen 3 3 3 3 3 3 3 3 0 S.Y. Hsu! 3 3 3 3 3 3 3 3 0 Joe Hsieh! 3 3 3 3 3 3 3 3 3 0 Samson Hu 3 3 3 3 3 3 3 3 0 Tze-Kaing 3 3 3 3 3 3 3 3 3 3 3 3 Yang 2 Chung-Jen 3 3 3 3 3 3 3 3 3 3 3 3 Cheng 2 L.H. Yang 3 3 3 3 3 3 3 0 Note: Directors and supervisors who have qualified the following conditions two years before being elected and during the term are to tick the box (“9”) of the corresponding condition. Ȑ1ȑNot an employee of the company or any related party; Ȑ2ȑNot a director or supervisor of the company or any related party (except for being an independent director of the company or any related party, or, the subsidiary that is with over 50% shareholding with voting rights held directly or indirectly by the company); Ȑ3ȑDoes not hold more than 1% of total stock issued directly or indirectly nor a natural shareholder on the top-ten shareholdings list; Ȑ4ȑNot the spouse nor a relative within two degrees of lineal consanguinity of an individual falling in the first three categories; Ȑ5ȑNot a Director, Supervisor, or employee of the legal shareholder that holds over 5% of total stock issued directly or indirectly; or on the top-five shareholdings list of the Company; Ȑ6ȑNot a Director (executive), Supervisor, management, or a shareholder with over 5% shareholdings of a company or organization that is in business with the Company; Ȑ7ȑNot an owner, partner, Director, Supervisor, management of a partnership or institution and his/her spouse that provides commerce, law, finance, accounting and consulting service to the Company or related party. Including but not limited to Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter and the Remuneration Committee in accordance with the Power Exercise described in Article. Ȑ8ȑġNot the spouse nor a relative within two degrees of lineal consanguinity of an individual; Ȑ9ȑFree of any of the behaviors as defined in Article 30 of Company Act; Ȑ10ȑNot a governmental officer, juridical person or its representative as defined in Article 27 of Company Act.

4.ġState the name and shareholdings ratio of the directors and supervisors who are an institutional shareholder; also, the name and shareholding ratio of the top-ten shareholders: Not applicable since the company’s directors and supervisors are nature persons.

2323 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 2nd 2nd Relation consanguinity consanguinity OLDING COMPANY Shih Tsang Jonney Jonathan or second consanguinity consanguinity or second None None None Chief Title Name Officer Executives who are spouses spouses who are Executives Branding President None None None None None None None None Note4 None None None Note2 Note6 None Note7 None None None None None Note8 None None None Note1 Note3 None5 None None None Current position with other companies

! ! td., WAVEFACE INC., ASUSTOR INC., ASUSTEK HOLDINGS LIMITED, !!

r !! d Experience (Education) (Education) Experience MBA of National Chiao Tung University University Chiao MBA Tung of National Business Division’s President ACER of MBA of Houston University Computer Co., President Youngmen Ltd. of Institute, Graduate Engineering Electrical National UniversityTaiwan ACER Manager of University EMBA Chengchi of National Engineer Won-Chuan of Co. Ltd. Institute Engineering, of Computer Boston University Engineer ASUS of (USA) Electrical Department Engineering, of National UniversityTaiwan V.P.TwinHea of Institute of National Science, Computer Tung Chiao University Junior V.P. Ace of EMBA, Chiao National University Tung Junior V.P. IBM of Electronic Department Engineering, of University Southern of California Deputy-researcher, Chung-Shan institute of and Science Technology Drexel University Finance, Department of Pennsylvania) (Philadelphia StaffYoung & Ernst of 24 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 by other by other persons in in persons their name their Shares held Shares ure Capital Corp., Hua-Min Investment Co., L 0 0 0 0 0 0 minor minor Shareholding Shareholding of spouse and spouseof and 61,735 0.01 531 0.00 99,202 0.01 805 0.00 12,786 0.00 316 0.00 39,039 0.01 0 0 48,781 0.01 877 0.00 107,019 0.01 8,233 0.00 100,592 0.01 0 0 1,423,093 0.19 0 3,026,309 0.41 585,313 0.08 Shares Shares % Shares % Shares % 30,093,638 4.05 0 Shareholding Shareholding s: Axus Microsystems Inc., Hua-Cheng Vent Date Elected Elected 1994.04.30 1999.01.12 2006.07.07 Shih Tsang David Chang Jonney Name Jonathan S.Y. Hsu 2008.03.10 AlexSun 2010.07.01 JoeHsieh 2008.03.10 JerryShen 2002.04.12 HenryYeh 2008.09.10 SamsonHu 2008.09.10 Benson Lin 2009.06.01 Vice Vice Vice Vice Vice Vice Chief Chief Chief Title Title Officer Officer Officer President Branding Financial President President President President President President ASUS ASUS INTERNATIONAL LIMITED, ASUS HOLLAND B.V., DEEP DELIGHT LIMITED, CHANNEL PILOT LIMITED, UNIMAX HOLDINGS LIMITED, WAVEFACE H LIMITEDand NEXT SYSTEM LIMITED. Executive Corporate Corporate Corporate Corporate Corporate Corporate (II) Information of the management Note 1: Chairman of the following companie April 19,2014

24 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 O Biotechnology Co., ATIONAL LIMITED and I Semiconductor Corp., AGAIT 12 Hour Hour heng Venture Capital Corp., Hua-Min , , AAEON TECHNOLOGY INC., SITI, ED, ASUS GLOBAL PTE. LTD., ASUS T FZCO., ASUSFZCO., T GLOBALPTE. KOREA LTD. ASUS and Investment Co., Ltd. d., AGAiT Technology Corp., UP ourse for Regulations ourse for Course Title Title Course PRISE CO., LTD., NATIONAL FIBER TECHNOLOGY(*) and CHUN –SHIH gement did notgement have stock option shares. ntureCapital Corp. and Hua-Min Continued Advanced C Continued Governing the Qualification Requirements and Governingand Requirements Qualification the Professional Development Principal of Accounting Issuers, Securities Officers of Firms, andExchanges Securities 25 c., International United Technology Co., Lt NOLOGY CO., LTD., ENERTRONIX HOLDING LIMITED, ENERTRONIX INTERN Sponsor Sponsor ONAL INC., ASUS TECHNOLOGY INCORPORATION, AGAiT Technology Corp. Inc., ASUS TECHNOLOGY INCORPORATION, AAEON TECHNOLOGY INC., Hua-C and Hua-Cheng Venture Capital Corp. LIMITED, ASUSTECHNOLOGY (HONG KONG) LIMITED,ASUS MIDDLE EAS Accounting Research and and Accounting Research Taiwan in Development Foundation ., AAEON TECHNOLOGY INC.,Hua-Cheng Ve

Director of the following companies: GOING CHAMPION ENTER dateof the annual reportissued; therefore, the company’s mana ǹ y’sname or individual’s name. t shareholdingst that are with the“rights touse” reserved. ies: ASMEDIA TECHNOLOGY INC., Enertronix, In Training Date Date Training Start Start End companies: Hua-MinCo., Investment Ltd. Englishtransliteration ofcompan David Chang Oct 14, 2013 Oct 21, 2013 TECHNOLOGY (HONG KONG) LIMITED, ASUS TECHNOLOGY HOLLAND B.V., ASUS MIDDLE EAST FZCO, ASUS Ltd.(*). TECHNOLOGY PRIVATE LIMITED and HSIN-H Directorof thefollowing companies: AxusMicrosystems Inc TECHNOLOGY (H.K.) CORPORATION LIMITED, INTERNATIONAL UNITED TECH AGAITECHHOLDING LTD. YoungmenComputer Co., Ltd.,TeYang Tech Inc., Ming-Chun Computer(*) and eCrowd Media, Inc. NATIONAL(*). Director of the following companies: ASKEY, Axus Microsystems Investment Co., Investment Ltd.COMPUTERASUS and INTERNATIONAL. Director of the following companies: ASKEY, SHINEWAVE INTERNATI CO., CO., LTD. Title Name Chief Officer Financial Note 3: Chairman of the following compan Note11:(*) Standards forthe Note 2: Chairman of the following companies: ASUS TECHNOLOGY IN CORPORATION, UNIMAX ELECTRONICS INC., ASUS TECHNOLOGY PTE. LIMIT Note4: Director of Enertronix, Inc.and UPISemiconductor Corp. Note 5: Chairman of KUO-CHENG ENTERPRISE CO., LTD.(*) Note8: Supervisor of the following Note 6: Director6: Note of ASUS CLOUD CORPORATION. Director7: Note offollowing the companies: ASUS TECHNOLOGY PTE. Note9:Theshareholdings stated inthetable exclude trus Note10: The Company did not have stock option upissued to the Education and training of the management

25 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 than thethan invested invested from the from subsidiary subsidiary company’s company’s Remuneration Remuneration company other company in the the in financial financial statements Companies

Ratio of Ratio ) income (%) income J The +F+G to Net Net to +F+G A+B+C+D+E A+B+C+D+E ( company company in the financial financial statements Companies Companies

Jerry ShenJerry The bonus share(I) bonus number of limit limit of number company on employee new onemployee Acquisition of the the of Acquisition financial statements financial in the financial financial S.Y. Hsu,JoeHsieh, Hu Samson statements Companies Companies Companies in the consolidated consolidated in the Companies Option JonneyShih, Jonathan Tsang,Chen, Eric The Certificates (H) Certificates Employee Stock Employee company 0 0 0 0 0 0 1.46% 1.46% None

Stock Stock dividend A+B+C+D+E+F+G A+B+C+D+E+F+G statements statements Cash Companies in Companies dividend the financial 39,070 thousand 0 0

Stock Stock dividend (Estimated amount) amount) (Estimated Eric ChenEric Jerry ShenJerry Cash The company The company Thecompany dividend 36,097 From Distributable Earnings (G) Earnings Distributable From Employees’ Cash Bonus Derived Derived Cash Bonus Employees’ thousand JoeHsieh,Samson Hu Remunerationof part-time employees 648 in the financial financial statements Companies Companies thousand JonneyShih, Jonathan Tsang, S.Y. Hsu, thistable is usedthe purposefor of disclosure instead taxof levy.

(Note 1) 1) (Note Pension (F) (F) Pension The 648 thousand company ) in the I financial financial ( 114,079 114,079 statements statements Companies Companies thousand thousand Name of Directors Directors of Name The 26 company compensation (E) (E) compensation 101,658 101,658 Salary, bonus, and bonus, Salary, thousand

in the SamsonHu financial financial statements Companies Companies Ratio of Ratio income (%) income The financial statements financial company A+B+C+D toNet A+B+C+D Eric Chen,Eric S.Y.Hsu, Joe Hsieh, Companies in the consolidated consolidated in the Companies in the financial financial statements Companies Companies (D) (D) en JonneyShih, Jonathan Tsang, JerryShen 0 0 0 0.81% 0.81% The A+B+C+D A+B+C+D company Business expense expense Business

in the financial financial 174,600 statements Companies Companies thousand

earnings (C) (C) earnings The from retained from Remuneration Remuneration company 174,600 thousand The company The company r thatis r It year. aprovision forpension. din this table is differentthe income from defined Income by Tax Law;therefore, in the financial financial statements statements Companies Companies (B) Pension Pension (Note 1) 1) (Note The company company Remuneration of Directorsof Remuneration Eric Chen,Eric Hsu,S.Y. Joe Hsieh, Samson Hu in the financial financial statements statements Companies Companies (A) (A) 0 0 0 0 0 The Remuneration Remuneration company 15,000,000 30,000,000 50,000,000 100,000,000 JonneyShih, Jonathan Tsang, Jerry Sh u ɴ ɴ ɴ ɴ ɴ 5,000,000 ɴ 10,000,000 directors directors Remuneration to Remuneration (Note 1) 1) (Note (Note 1) 1) (Note S.Y. Hsu S.Y. Joe Hsieh JoeHsieh Eric Chen Chen Eric Jerry Shen Jerry H.C. Hung H.C. Samson H Samson 1. Remuneration of Directors Remuneration Bracket (III) Remuneration of Directors, Supervisors, President, and Vice President Jonathan Tsang Jonathan Below2,000,000 2,000,000 5,000,000 10,000,000 15,000,000 30,000,000 50,000,000 Over100,000,000 Note1: No actual payoutforpension fundsfo Note2: The content discloseof remuneration

Title Title Name Vice Director Director Director Director Director Director Chairman Chairman Chairman Chairman Shih Jonney

26 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ! the company’s the company’s None None subsidiary Remuneration from the invested from Remuneration

company other than other company le is used for the purpose of disclosure instead ! ! statements the financial the financial Companies in in Companies Companies in the financial statements (D) statements financial Companies the in income ze-Kaing Yang, Chung-Jen Cheng, L.H. Chung-Jen ze-Kaing Yang Yang, The A+B+C Ratio of A+B+C to Net Net to of A+B+C Ratio company

Name of Supervisors Name of Supervisors ! ! ! statements the financial the financial Companies in in Companies (C) 27 0 0 0 0.05% 0.05% Business expense Business The

company ! ! The Company The Company 11,021 11,021 statements thousand thousand ) the financial the financial Companies in in Companies B ( Tze-Kaing Yang, Chung-Jen Cheng, L.H. Chung-Jen Tze-Kaing YangYang, T

table is different from the income defined by Income Tax Law; therefore, this tab retained earnings earnings retained The Remuneration from from Remuneration 11,021 11,021 company thousand Remuneration of Supervisors of Remuneration ! ! statements the financial the financial Companies in in Companies (A) ! Remuneration Remuneration 0 0 0 The company Remuneration to supervisors to Remuneration ! 5,000,000 ɴ 5,000,000 ɴ 10,000,000 ! ! ! of tax levy. Below 2,000,000 Below 2,000,000 2,000,000 5,000,000 10,000,000 ɴ 15,000,000 15,000,000 ɴ 30,000,000 30,000,000 ɴ 50,000,000 50,000,000 ɴ 100,000,000 Over 100,000,000 Total ɀ The content of remuneration disclosed in this Name Remuneration Bracket L.H.Yang Tze-KaingYang Chung-JenCheng

! 2. Remuneration of Supervisors Title Supervisor Supervisor Supervisor

27 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 than the than invested from the from subsidiary subsidiary company’s company’s Remuneration Remuneration company other company in the financial financial ! statements Companies Companies limit on The The bonus share share bonus the number of Acquisition of company employee new ! disclosure instead of tax of levy. instead disclosure in the financial financial

statements Companies Companies lidatedstatementsfinancial (D) Jerry Shen Jerry S.Y. Hsu Option ! Certificates The The company Employee Stock Employee Stock HenryYeh, AlexSun inthe financial financial statements Companies Companiesin the conso onneyShih, Jonathan Tsang, Joe Hsieh, Samson Hu, Benson Li The to Net income (%) Ratio of A+B+C+D Ratio of A+B+C+D company this table is used for the purpose this is of table used the for 0 0.75% 0.75% 0 0 0 0 None Stock dividend Nameof President andV.P. Cash financial statements financial Companiesinthe ! 40,829 dividend thousand (D) ! 0 Stock dividend

From Distributable Earnings From Earnings Distributable 28

! Employees’ Cash Bonus Derived Employees’ Bonus Derived Cash Thecompany Cash 40,829 dividend thousand Jerry Shen Jerry S.Y. Hsu ! TheCompany HenryYeh, AlexSun sin the financial financial 84,145 statements Companie thousand (C) ! the income defined by Income Tax Law; therefore, Law; Tax Income defined theincome by Bonus and The compensation compensation 84,145 company thousand JonneyShih, Jonathan Tsang, Joe Hsieh, Samson Hu, Benson Lin J 972 in the in financial financial statements Companies Companies thousand Pension (B) (Note 1) 1) (B) (Note The 972 company thousand r year. that r It is for a pension. provision 35,801 statements thousand the financial thefinancial Companies in Companies (A) Remuneration The 35,801 35,801 company thousand

muneration disclosed in this table is different from is different this muneration disclosed table in Jerry ShenJerry JonneyShih Remuneration of PresidentRemuneration and V.P. 15,000,000 30,000,000 50,000,000 100,000,000 ɴ ɴ ɴ ɴ ɴ 5,000,000 ɴ 10,000,000 Remuneration Bracket 3. Remuneration of President and V.P. Title Title Name Officer Officer Note 2: contentThe re of Note 1: No actual payout for pension Note funds 1: fo payoutNo pension actual for President JonathanTsang CorporateV.P. CorporateV.P. S.Y. Hsu CorporateV.P. JoeHsieh CorporateV.P. Hu Samson CorporateV.P. HenryYeh CorporateV.P. Benson Lin AlexSun ChiefBranding ChiefExecutive Below2,000,000 2,000,000 5,000,000 10,000,000 15,000,000 30,000,000 50,000,000 Over100,000,000

28 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 e responsibility and o yearso to net income: ion of remuneration paid; 0.2% 0.2% company and the companies net income (%) (%) net income Ratio of total amount to amount total of Ratio Total Total

Cash Dividend Dividend Cash 42,899 thousand thousand 42,899 thousand 42,899 amount) (estimated

29 muneration muneration is based on the salary level of the industry and th ʘ ʘ 1.66 1.62 0 0 and V.P. in the last two years to net income net income to two years last in the V.P. and tion and its relation to business performance: nd and the distribution of dividend muneration by paid the to the Directors, company’s Supervisors, President, and V.P. Jerry ShenJerry Ratio of the total remuneration paid to the company’s Directors, Supervisors, President, President, Supervisors, Directors, company’s paidthe to remuneration of the total Ratio Title Name Stock Dividend President JonathanTsang 2012 2012 2013 CorporateV.P. CorporateV.P. CorporateV.P. S.Y. Hsu CorporateV.P. JoeHsieh Hu Samson CorporateV.P. HenryYeh CorporateV.P. Benson Lin AlexSun ChiefBranding Officer JonneyShih ChiefFinancial Officer DavidChang ChiefExecutive Officer Year (Note 1) 1) (Note Year Notefor year1: It meant the the income generated. of contributionof each employee.

A. in the last tw Directors,Analyze Supervisors, the ratioV.P. totalof President,the remunerati on paidthe andto company’s B. In terms of the company’s remuneration policy, a reasonable re in the consolidated financial statements to net income in the last two years; also , describe the standard, policy, and combinat the proceduredefining of remunera moreover, Managers (IV) Compare and state the ratio of total re 4. Name of Managers who received divide

29 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 III. Corporate governance

(I) Board of Directors

Board of Directors

The attendance of Directors for the 8 (A) Board Meeting in 2013:! Frequency of Attendance Title Name Proxy attendance (%) Remarks (B) (B/A) Chairman Jonney Shih 7 1 87.5% 1 delegation Vice Jonathan 6 0 75% 2 leaves Chairman Tsang Director Jerry Shen 8 0 100% Director Eric Chen 3 1 37.5% 4 leaves and 1 delegation Director S.Y. Hsu 7 1 87.5% 1 delegation Director Joe Hsieh 7 0 87.5% 1 leaves Director Samson Hu 6 1 75% 1 leaves and 1 delegation Remarks: 1. For the events stated in SEC Article 14.3 and other opposing or qualified opinion of independent directors that are recorded or declared in writing: Not applicable since the company does not have independent directors appointed. 2. Directors who have excused themselves from the meeting due to a conflict of interest: Not applicable since the company does not have directors who need to have themselves excluded from the meeting due to a conflict of interest. 3. The goal and the enforcement of reinforcing the function of the board of directors in the most recent years (for example, setup an Auditing Committee, upgrade information transparency, etc.): To strengthen the resolution procedures for major contributions, avoid influence of attending personnel to the resolution of board of directors, and strengthen the disclosure of conflicts of interests in directors, the “Rules and Procedures of Board of Director Meetings” have been passed with revisions in accordance with the laws, regulations and standards of practice. Additionally, Compensation Committee has been established to strengthen the compensation policies for directors and managers. Please refer to (IV) Compensation Committee Operations for more information.

30 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 30 (II) The operation of the Auditing Committee or the attendance of supervisors at the board meeting: ! ! 1. Attendance of supervisors at the board meeting Attendance of supervisors at the board meeting The attendance of Supervisors for the 8 (A) Board Meeting in 2013: Frequency of Attendance attendance (%) Title Name (Times) (B) Remark (B/A) Supervisor Tze-Kaing Yang 7 87.5% 1 leaves Supervisor Chung-Jen Cheng 7 87.5% 1 leaves! Supervisor L.H. Yang 6 75% 2 leaves! Remarks: I. Composition and responsibility of Supervisors: (I) Communication between the company’s supervisors and employees and shareholders: Supervisors may contact and communicate with employees and shareholders if it is necessary. (II) Communication between the company’s supervisors and internal chief director and CPA: 1. Chief auditor is to have the auditing report submitted to the supervisors in the following end of month upon the completion of the audit; also, the chief auditor is to report the audit at the board meeting. 2. Supervisors may communicate with the CPA if it is necessary. II. For the opinions of the supervisors stated in the board meeting, the date, term, the content of the case, the resolution reached, and the company’s response to the supervisor’s opinion must be stated in details: None. ! 2. Operation of audit committee: Not applicable since the Company did not have an audit committee setup.

31 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 31 (III) Corporate governance and the deviation from the Rules Governing Listed & OTC corporate governance and the causes

Deviation from the Rules Governing Listed Item Operation & OTC corporate governance and the causes 1. Equity structure and shareholders’ equity (1) The way the company processes the 1. The spokesman is designated. Stock agent is No deviation suggestion and disputes of shareholders to process stock affairs. (2) The main shareholders of the company 2. The main shareholders of the company and No deviation and the responsible personnel of the main the responsible personnel of the main shareholders shareholders are in the shareholders’ roster and the company is to have a good relation kept with them. (3) The company establishes the business 3. The company has established risk control No deviation risk control mechanism and firewall mechanism and firewall in accordance with with the related party the “Corporate Governance Law of Subsidiary,” “Loans and Endorsement and Guarantee Procedures,” and “Assets Acquisition and/or Disposition Procedure.” 2. The formation and the responsibility of the board of directors (1) The independent directors of the 1. The company will set up independent Gradual compliance of company directors at the 2015 shareholder meetings governance practice through the revision on the Articles of principles Incorporation and select the independent directors at the 2017 shareholder meeting. (2) Evaluate the independence of the 2. Routinely assess the independence of No deviation independent auditor periodically attesting CPA, who will be employed by the resolution of Board of Directors. The same procedures apply to change of attending CPA. 3. Establish a communication channel with There are proper communication channels No deviation the related party available by phone and e-mail. 4. Publication of information (1) The company has a website setup to 1. The company has a website No deviation disclose financial information and (http://www.asus.com) setup to disclose business management financial information and business management (relationship with investors) and to explain the corporate governance of the company to the investors in the shareholders meeting and public offering meeting. (2) The company has adopted other 2. Designate personnel to collect and disclose No deviation information disclosure methods (for information of the company; also, example, setup website in English, substantiate the spokespersons system to designate personnel to collect and communicate to the public. disclose information of the company, substantiate the spokesman system, and publish the public offering meeting on the website) 5. The operation of the company’s The company already set up the Compensation No deviation nomination, remuneration, and other Committee. Please refer to the (IV) functional committees Compensation Committee Operations for more information.

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32 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Deviation from the Rules Governing Listed Item Operation & OTC corporate governance and the causes 6. If the company has corporate governance rules stipulated according to the “Rules governing Listed/OTC corporate governance,” please state the variation of the business operation from the rules: ! The company’s corporate governance rules are in planning; however, directors and supervisors have exercised their obligations and internal control system in accordance with the spirit and regulation of the “Rules governing Listed/OTC corporate governance.” 7. Other information that helps understand the corporate governance (for example, advanced study of directors and supervisors, attendance of directors and supervisors for board meeting, enforcement of risk management policy and risk measurement standards, protection for consumers and customers, director’s excusing himself/herself from a case involving conflict of interest, liability insurance acquired for directors and supervisors, and corporate social responsibilities): 1. Directors and supervisors usually attend the board meeting for discussion unless there is a reason not to. Directors must be excused from a case involving conflict of interest according to the “Rules Governing the Conduct of Board Meetings.” The resolutions of the Board of Directors are disclosed in the Market Observation Post System by law. 2. Liability insurance is acquired for directors and supervisors according to the Articles of Incorporation. 3. To improve the supervision and management function of Board of Directors, the company developed the “Board of Director Meetings Standards” in accordance with the “Public Company Board of Director Meeting Guidelines” promulgated by the competent authority. 4. The company has repair and maintenance stations and consumer’s hot line setup worldwide for protecting the interest of consumers. The company has an agreement signed with each customer before providing services and products to them. 5. The company obeys law, maintains a good labor relation, provides job opportunity, builds up brand name, expands exporting business, and fulfills corporate social responsibility. 6. The company is to have other corporate governances promoted and substantiated gradually in accordance with the current condition and regulations. 8. If there is an internal evaluation report or an independent appraisal report furnished on corporate governance, the internal (external) performance evaluation report must be furnished with the nonconformities (or suggestions) and corrective actions detailed: N/A

(IV) Compensation Committee Operations: 1. Formation and Responsibilities of ASUS Compensation CommitteeǺ (1)Formation of CommitteeǺ The Member of Committee consists of three people appointed by the BOD resolution, whereas one of them is the convener. The professional qualification and independence of the members should comply with the provisions set forth in Article 5 and Article 6 of Guidelines for Functions in Compensation Committee. (2) Responsibilities of CommitteeǺ The Committee should apply attention of good administrators to truthfully fulfill the following functions and to submit recommendations to the BOD for discussion. Nonetheless the recommendations on supervisorȷs salary and remuneration submitting to the BOD for discussion are limited to the specification of Articles of Association for Supervisor salary and remuneration or shareholder resolution with authorization to BOD for processing: i. Periodically review the guidelines and propose recommendation for revision. ii. Formulate and periodically review the performance appraisal for ASUS directors, supervisors and managers with policy, system, standards, and structure for salary and remuneration. iii. Periodically evaluate and specify the salary and remuneration for ASUS directors, supervisors and managers. Committee fulfilling the aforementioned functions should comply with the following principlesǺ

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33 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 i. Ensure the arrangement of salary and remuneration in line with relevant laws and regulations that are sufficient to attract outstanding personnel. ii. The performance appraisal and salary/remuneration for directors, supervisor and managers should refer to common peer standards for payout with consideration of personal performance and company salary/remuneration concept, business performance and rationality of future risk association. iii. Directors and managers should not be misled with introduction of pursuit of salary/remuneration to engage in conducts exceeding the risk appetite of the company. iv. The proportion of dividend payout to directors and senior managers in short-term performance and the payout time for some changing salary and remuneration should be determined with consideration of industry characteristics and the business nature.

2. The Members of ASUS Compensation Committee:

With over five years of job experience and the Independence (Note 2) !! following business qualification Condition The number of Teachers of Judge, prosecutor, Remuneration ! public or attorney, With job Committee Members private accountant, or Remarks Title experience in taking job from the ! colleges for business (Note 3) ȐNote 1ȑ commerce, Remuneration the subject of salespersons law, finance, 1 2 3 4 5 6 7 8 Committees of other ! commerce, passed national accounting, listed companies! law, finance, exam & certified or business Name accounting, or specialists or business technicians Li, Other !w w w w w w w w w w Ming-Yu     4 NA Tai, Other ! !ww w w w w w w w Chung-Ho    4 NA Sheu, Other w w w w w w w w w w w Chun-An      2 NA Note 1ǺPlease fill in the title as director, Independent director and others. Note 2ǺThe members who have qualified the following conditions two years before being elected and during the term are to tick the box (“3”) of the corresponding condition. (1) Not an employee of the company or any related party; (2) Not a director or supervisor of the company or any related party (except for being an independent director of the company or any related party, or, the subsidiary that is with over 50% shareholding with voting rights held directly or indirectly by the company); (3) Does not hold more than 1% of total stock issued directly or indirectly nor a natural shareholder on the top-ten shareholdings list; (4) Not the spouse nor a relative within two degrees of lineal consanguinity of an individual falling in the first three categories; (5) Not a Director, Supervisor, or employee of the legal shareholder that holds over 5% of total stock issued directly or indirectly; or on the top-five shareholdings list of the Company; (6) Not a Director (executive), Supervisor, management, or a shareholder with over 5% shareholdings of a company or organization that is in business with the Company; (7) Not an owner, partner, Director, Supervisor, management of a partnership or institution and his/her spouse that provides commerce, law, finance, accounting and consulting service to the Company or related party. (8) Free of any of the behaviors as defined in Article 30 of Company Act; Note 3: If the member is identified as a director, please provide explanation of whether if the provision

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34 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 of Paragraph 5 of Article 6 in “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter” has been met.

3. Operations of ASUS Compensation Committee: (1)The Remuneraton Committee of the Company comprises 3 people. (2)Term of Committee Member: December 22, 2011 to June 8, 2014. Two meetings (A) of 2013 Remuneration Committee have been held. The qualification and attendance of Committee Members are described below:

Frequency of Attendance Proxy Title Name (Times) (B) attendance Remark (%)(B/A) Convener Li, Ming-Yu 2 0 100% Committee Kenneth Tai 1 0 50% 1 leaves Committee Sheu, Chun-An 2 0 100% Other matters for records: 1. In the event the Board of Directors does not adopt or revise the recommendation proposed by Remuneration Committee, the agenda shall indicate the date of Board Meeting, term, agenda content, outcome of board resolution, and the company actions to opinions brought by Remuneration Committee (For remuneration approved by the Board of Directors surpassing the recommendation brought by the Remuneration Committee, provide explanation for the discrepancy and reason): No such incidence found. 2. In the event the member oppose and reserve opinions against the matters resolved by the Remuneration Committee with records or written declaration, describe the date of Board Meeting, term, agenda content, outcome of board resolution, and the company actions to opinions brought by Remuneration Committee: No such incidence found

4. Operations of ASUS Compensation Committee recently:

Date Operation The Company convened its Fourth Meeting of the First Remuneration Committee and approved the 2012 Earning Mar. 22, 2013 Distribution for Director and Supervisor Remuneration and Employee Dividend Proposal. The Company convened its Fifth Meeting of the First Remuneration Committee and approved 2012 Board of Director Jul 17, 2013 and Supervisor Remuneration Distribution Proposal, 2013 Manager Salary Raise and Mid-Year Performance Bonus Distribution Proposal.! The Company convened its Sixth Meeting of the First Jan 17, 2014! Remuneration Committee and approved! 2013 Manager Year-End Performance Bonus Distribution Proposal.! The Company convened its Seventh Meeting of the First Remuneration Committee and approved 2013 Earning Mar 25, 2014! Distribution for Director and Supervisor Remuneration and Employee Dividend Proposal.!

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35 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 (V) Fulfillment of social responsibility

Deviation from the Rules Governing Listed & OTC Item Operation corporate governance and the cause 1. Promote the implementation of corporate No deviation governance (1) ASUS has corporate social responsibility policy (1) Corporate defines corporate social and guidelines defined that can be looked up at responsibility policy or system and review ASUS corporate sustainability report and ASUS the effect of implementation CSR website at http://csr.asus.com. (2) Operation of corporate social responsibility (2) ASUS has Corporate Sustainability Office setup to full-time (part-time) unit promote corporate social responsibility policy and meet regularly to review and improve. (3) Corporate arranges business ethics (3) ASUS has the Business Ethics & Anti-Bribery education, training, and promotion Policy defined. In addition to regular internal periodically for the directors, supervisors, education, training, and promotion, process and employees; also, it is integrated with auditing and promotion is arranged for external employee’s performance evaluation system suppliers. To ensure the effectiveness of for a clear and effective reward and aforementioned education, training and promotion, punishment system. the online course for employee conduct principles is specified as compulsory and cases violating conduct principles shall be punished by the company in accordance with the gravity in addition to putting in announcement. 2. The development of a sustainable environment No deviation (1) ASUS strives to upgrade the effectiveness of (1) To effectively utilize resources and to reduce resources utilization; also, uses recycled green-gas emission during transport, ASUS designs materials that are friendly to the the special structure for package with patent to environment reduce the packaging weight, reduce packaging material volume, in addition to introducing the user of recycled materials. In the future, ASUS will continue reducing waste, control the total amount of use for package materials and enhance packaging universality to introduce sustainable materials. (2) ASUS establishes adequate environmental (2) ASUS had passed ISO14001 Environmental management system by the industrial Management System Certification in 1998 and features complied with PDCA annually. (3) ASUS setups environmental management (3) The company offers waste disposal technicians and specialists unit to protect the environment waste treatment specialists who are responsible for the administration and declaration of the various wastes and sewage system for the company. (4) ASUS stays alert the impact of climate (4) ASUS has committed to greenhouse gas reduction; change on business activities; also, drafts up also, disclose greenhouse gas emission information energy saving and carbon reduction and that can be looked up on the corporate sustainability greenhouse gas reduction strategy report and ASUS CSR website. ASUS products have undergone ecological design to enhance energy use efficiency for reduction in greenhouse gases. ASUS added a number of office locations due to business demand, therefore the 2013 was reduced by 560,000 KW compared to 2012 while cutting down the carbon dioxide emission by approximately 328 tons. 3. Maintenance of social welfare No deviation (1) ASUS complies with relevant labor acts and (1) ASUS follows the governing labor laws, protects respect for the internationally recognized employee’s interest; also, drafts up “Employee’s basic labor and human rights principles to Code of Ethics” and opinion box for employee’s protect the legitimate rights and interests of filing an appeal. employees while maintaining non-discriminating treatment, thereby to establish proper management methods, procedures, and implementation.

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36 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Deviation from the Rules Governing Listed & OTC Item Operation corporate governance and the cause (2) ASUS provides workers with safe and healthy (2) ASUS has labor safety and health unit setup working environment; also, provide regularly lawfully; also, qualified OHSAS 18001 labor safety and health education safety and health system certification continuously. ASUS provides labor safety and health education and training to the new recruits, employees, and contractors for their safety and health protection. (3) ASUS establishes periodic communication (3) ASUS holds labor meeting quarterly. In the event of scheme for employees and notify the major changes in operation, the Company’s PR or employees of possible operating changes competent departmental supervisor shall explain to that bring major impacts to the employees employees through public channels (including through reasonable approaches. seminar, announcement, and email). (4) ASUS defines and announces the consumer (4) ASUS has setup consumer complaints procedures policy; also, the clear and effective consumer and methods by 0800-093-456 Technical Service complaints procedures provided for ASUS Hotline / e-mail or Support website at products and services http://support.asus.com.tw (5) ASUS works with suppliers to upgrade (5) ASUS routinely hold supplier assembly for corporate social responsibility. advocacy in corporate social responsibilities to effectively supervise the implementation progress of suppliers and contractors in corporate social responsibilities by executing the following planning operations: 1. Request suppliers and contractors to sign and comply with ASUS conduct and norms. 2. Execute annual supplier chair CRS on-site audit and expand the scope of on-site audit for supply chain. 3. Execute supply chain education and training. 4. Analyze the past supply chain CSR audit results for improvement (6) ASUS participates in community development (6) ASUS has participated in community development and charity activities by commercial and charity activities through ASUS Foundation. activities, materials donation, corporate Please refer to the Corporate Sustainability Report volunteers service, and other free special “Social Participation”. services 4. Enhance information disclosure No deviation (1) The way ASUS discloses relevant and reliable (1) ASUS issues corporate sustainability report corporate social responsibility information periodically and disclose information of corporate social responsibility on the website from time to time. (2) ASUS composes corporate social (2) ASUS issues corporate sustainability report responsibility report and disclose the periodically in July and disclose information of promotion of corporate social responsibility corporate social responsibility. 5. If ASUS has corporate social responsibility defined in accordance with the “Rules Governing Listed & OTC corporate governance,” please state the operation and the deviation from the “Rules Governing Listed & OTC corporate governance”: ASUS has substantiated corporate social responsibility in accordance with the “Rules Governing Listed & OTC corporate governance. 6. Other material information crucial to corporate social responsibility (such as the system, measures, and performance of the company related to environmental protection, community involvement, social contribution, social service, social charity, consumer’s interest, human right, safety and health, and other social activities): Please refer to the business sustainability report and website of ASUS at http://csr.asus.com/chinese/index.aspx#120 7. Please detail if ASUS products or corporate social responsibility report is certified by any institutions: The 2012 Corporate Sustainable Report announced in 2013 was certified by SGS Taiwan Limited in accordance with AA1000 inspection standards and GRI outlines for the significance, inclusiveness and response of this report that were in line with GRI G3.1 application level A+ statement.

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Since Corporate Social Responsibility (CSR) is becoming one of the indexes used for assessing enterprise’s perpetual development, ASUS’s responsibility for social environment, in addition to the original environmental management including air, sewage, waste, hazard substance, noise, and energy-saving measures and control includes labor safety and health risk evaluation and measures, labor’s interest promotion, balanced work and leisure, free of discrimination, free of sexual harassment and abuse, occupational safety and employee’s mental and physical health, obedience of business morale, intellectual property right, the protection of business secrets, and community watch. ASUS had SERASUS organized in July 2006 to promote corporate social responsibility with the international certification of ISO14001 Environmental Management System and OHSAS 18001 Occupational Safety and Health Management System. ! The scope of SERASUS is based on the spirit of EICC to integrate the standard requirements of environment, safety, and health, labor and business moral as the structure of management system and is in conformity with the company’s social responsibility policy: 1. Comply with laws and standards and reduce the risk of environmental safety 2. Cherishing natural resources and reduce environmental impact 3. Satisfying customer’s demand and realizing green enterprises 4. Actively take care of employees and enhance human care 5. Full participation and substantiate social responsibility The company’s promoting corporate social responsibility: (1) Establish SERASUS organization and promote corporate social responsibility (2) Complete SERASUS regulations and enforce internal audit (3) Conduct supplier’s promotion, investigation, and consultation (4) Continuing improvement and perpetual operation ! In terms of human right, ASUS has strong belief in humanity and care for employees. ASUS has honored the requirement of age, local regulations, and EIC in recruitment and without discrimination of race, sex, age, political party, religion, and handicap. ASUS takes good care of and protect the work and living conditions of employees and with comprehensive training and self-development provided to employees. ASUS has declared the human right policy in accordance with the Declaration of Human Right of the United Nations: 1.No child labor: In conformity with the low and requirement of minimum age; therefore, no child labor. 2.In conformity with the minimum wage: Provide employees with the minimum wage or better than local minimum wage and welfare. 3.Working hours: Provide employees with the benefit of leave with pay periodically. Labor will not be forced to work over the maximum working hours regulated by local law. In conformity with the requirement of overtime wages or necessary compensation. 4.No discrimination: No discrimination of race, skin color, age, sex, sexual orientation, race, religion, disability, union, or political preference. All men and women are equal and are entitled to protection and free of discrimination. 5. Free of inhuman treatment: Harassment and/or physical abuse is prohibited.

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6. No forced labor: ASUS products or service will not be provided by forced, restrained, or involuntary prison workers. All employed workers for ASUS products and service work at their own free will. 7.Health and safety: Provide employees with a trustworthy, respectful, healthy, and safe working environment. 8.Employee’s training and self-development: Provide facility, training program, time, and grants to support employee’s occupational development. In addition to the aforementioned human rights policy fulfilled by ASUS, the suppliers of ASUS are expected to protect labor’s human rights; also, enhance the awareness of corporate social responsibility of the ASUS suppliers and contractors. ASUS routinely conducts CSR audit to suppliers and add analysis on education, training and past audit results for improvement to assure supplier conformance to protect the human rights, health, safety, and environment of labors in terms of managerial dimension, regulation cognition and implementation for improvement.

ASUS has taken part of social charity activity from time to time to fulfill corporate social responsibility in addition to providing basic protection. ASUS has based its long-term orientation and goal on “shortening digital gap,” “upgrading innovative ability,” “incubating science and technology talents,” “promoting industry and academy collaboration,” and “promoting environmental protection and energy saving.” ASUS has ASUS Foundation setup in 2008 to have resources integrated effectively and to feedback the society with substantiated action for the fulfillment of corporate social responsibility. Activities promoted by ASUS and ASUS Foundation in 2013: 1. Promoting culture/art/music related sponsorship with key execution described below: (1) Sponsoring clean program production for DaAi TV to promote literary education, encourage integrity and pragmatic attitude, so that the power of social welfare will continue to grow and all land enriched by emotions and stories. (2) National 99-Second SHORT-FILM Competition: ASUS Foundation and Taiwan Public Television Service co-sponsor the “National 99-Second SHORT-FILM Event” and have completed the 4th evaluation and award presentation ceremony in 2014. Upon entering its fifth year, the competition features themes following the current events taking place each year, in attempt to convey the positive and benevolent power through the films. This year, we discover the truth, benevolence and beauty of different places in Taiwan. We also expect to bring attention from everyone to the ubiquitous sentiment around us through the calling of national films on “Sentiment 99.” a. The 4th Sentiment 99, Discovery of Taiwan’s Truth, Benevolence and Beauty: The 4th Sentiment 99 took off on October 30th, 2012. A total of 249 films have been collected by the end of February, 2013 and the award ceremony was held on May 26th, 2013. The number of participants was 688 people, hitting a record high in the overall participants over the years, indicating that the participants now know how to integrate different resources to connect the unforgettable memories and rare experiences in life through teamwork into different touching stories. The number of visitors to the event website was 16,455. This year, we added Facebook to interact with young people and the number of likes for Sentiment 99 was 450 people, with

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the main age group falling between 18-34 years old. The posting of one article can draw the attention of approximately 190,000 people indirectly. The winning short films are made into DVD and teachers are hired to write the winning films into teaching cases and prepare them into teaching materials for life and characters education for elementary school 5th and 6th graders, to bring more impact into full play. The DVDs are highly recognized and there were 104 elementary school teachers who asked for the DVD. There were 19 outstanding nominees for “Campus” and “Society” categories. Prestigious director You-Ning Qu, Ke-Shang Shen and Jia-Jun Huang (Black Sugar) posed as the judge this year. The judges have praised that some films are compatible to the level of professional. Not only is the film quality more superior than the past with more diversified dimensions, the participating films include stories from counties and cities all over Taiwan, which not suggest that Sentiment 99 Event has permeated into Taiwan but also represents the ubiquitous sentiment in Taiwan. The event has been adjusted to Campus group from the previous College group in attempt to allow expand the participating student groups to senior high school, senior vocational high school, and even junior high or elementary school students. Creativity is unconstrained by age and anyone who has the creativity and interests can tell their stories and have the opportunity to fulfill their dreams. b. The Fifth Sentiment 99 features My Home: was launched on September 18th, 2013, featuring My Home and the deadline was scheduled for February, 2014. The award ceremony will be held in May. (3) The 5th Aborigine Science Education Award The event was launched in April 2013 and a total of 36 teams from junior high and elementary schools completed registration in December. In particular, there were 9 inter-school teams, comprising 210 people from 47 schools. Moreover, there were 87 seniors and advisors plus 123 students participating in this event. The event has offered opportunities for 500 aboriginal children in the past to participate in science exhibition. These children can ask the tribal seniors about the content of traditional culture through conducting the research course for science exhibition, in order to analyze based on scientific principles, prepare research report, and make three-minute film of research course through the advice from the teacher. During the upload process, students can also participate in digital learning. Aboriginal children from remote counties no long seal their aspiration of creativity in the mountain and forests or drift in the rivers due to the lack of financial support to buy posters, layout board, and food, accommodation and transportation fees associated with going to the city and participating in the competition. The event is strongly supported by the Council of Indigenous Peoples and the Aboriginal Peoples Television Network, and even becomes one of the annual science education activities which the junior high or elementary school students and teachers in remote areas participate and value. The event network, conference meeting based preliminary review, correction, and secondary review will continue to be carried out. It is scheduled that the nominee list will be announced and the ceremony to be held in June, 2014.

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(4) Farmer Care Project: Acquisition of millets (grown by traditional aboriginal method in the hillsides with approximately 600 meters in altitude, in Wutai Township of Pingtung County) packaged in 400g/$170 * 1060 packs. In 2013, a total of 551 packs were harvested and the remaining quantity from the 2014 harvest was 509 packs. Each pac is labeled with “ASUS Foundation Support for Farmers Care,” stories of small farmers in Dawu and description of crops growth in an acquisition amount of NTD180,000. The millets acquired will be held for charity event inside ASUS. Millets will be sold to employees in the amount acquired and then re-distributed in feedback to the community charity organizations near ASUS Headquarters. Lbuwan Tribe (Dawu Tribe, Puyuma) is situated in the hillsides with approximately 600 meters in altitude, in Wutai Township of Pingtun County. After the Typhoon Morakot disaster, some Puyuma tribal people chose to return home and live there, using natural methods to grow traditional crops millets, taro, yam, and peanuts in the mountains, carefully restoring more cultivation to sustain the growing environment for previous diverse and rich grain crops through quarterly production. The environmental ecology and diversity in cultivation are also maintained through seed saving. The products of small farmers lack the distribution channel and it is expected that small farmers growing naturally in the local area could be supported to develop a new tribal lifestyle while applying the lifestyle of sustainability to bring all tribal people back to the township. (5) 4th Year in Sponsoring the 5-Year Reconstruction for Dashe Village: a. Gradually restore the tribal mutual labor exchange mechanism: The tribal commensal gathers routinely in 2~3 times a month for the tribe to share food, get to know each other and share life, agricultural experience and cohere the participation and consensus of tribal people. b. Natural Cultivation and Rehabilitation of grain crops, ecology tourism development: - The total harvest of Emperor Bamboo Shoots was 150 kilogram, packaged into 120 packs and sold at 18,750 in profit. The profit will be fully invested in the joint learning for students. - The 2014 key work includes sustaining and managing the small farmer rehabilitation of grain crops, traditional plants, emperor bamboo shoots, and sales of millet rice dumpling, to stabilize the production and sales. - The total number of reception for 2013 Dashe Tribe (Experience Reception) was 15 times with a cumulative number of people received of 149 people. (6) Sponsorship for Museum of Contemporary Art, MONSTER Cheerleading Squad, Zhongzheng Senior High School Dance Class. Assisting young students in experience exchange and mutual learning for arts, sports, music, and dance. a. Sponsorship for Museum of Contemporary Art: Extending the sponsorship model with Museum of Contemporary art, ASUS has cooperated with 9 domestic and international contemporary art exhibitions in 2013 with a total of over 150,000 participants, by lending ASUS products to artists and exhibition planners invited by the Museum of Contemporary Art. b. Sponsorship for MONSTER Cheerleading Squad: Continuous (third year) sponsorship on the costs of routine practice field for MONSTER

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Cheerleading squad that have constantly won in the international and domestic cheerleading competitions, so that the players can continue the study and practice of experience and techniques in a safer and comfortable space. There are approximately 100 members who maintain practice 4 times a week in Kid Power Gymnastics in Luzhou. MONSTER also actively participates in the technical exchange with foreign teams, including Singapore, Hong Kong and Canada. The team uniforms are printed with ASUS logo. Cheerleading sport is gradually making it way to categories of Asian Games. Many high-risk actions such as the climbing of shoulder stand, flyer, leaping, and split-lift require safe field and equipment. MONSTER Cheerleading squad profoundly appreciates ASUS for sponsoring field cost and improvement of training environment and equipment starting in 2011, which effectively reduces accidents that could likely take place during the training for stunts. This group of young students no longer has to worry about the first costs and can follow formal training methods, gradually improve technical difficulty, invite more outstanding athletes and young students to promote this sport. Based on their passion and love for cheerleading, the team has accomplished remarkable performance year after year. c. Sponsorship for Zhongzhen Senior High School Dance Class: Sponsoring for the costs of Zhongzhen Dance Presentation, ASUS offers students the experience to dance on stage through this event, promote dance and art education in school, and promote campus observation to improve teaching quality and foster more outstanding artists in the future. 2. Digital Gap Shortening Project: Including recycled computer/new computer contribution, execution of international volunteer project cooperation with ADOC. (1) Reverse Recycling, recycled computer contribution, Eco-friendly Earth Project: Successful completion of cooperation with Ministry of Foreign Affairs, Ministry of Education, Tzu Chi, National Tsing Hua University/NCTU International Volunteer in 2013 for contribution of 1900 sets of recycled computers to 38 non-profit seeking organizations in 11 countries in India, Africa, Central America, and Taiwan. Set up ASUS Digital Learning Facebook, a non-profit seeking organization that encourages all Taiwanese people to commit in digital teaching and learning through this platform, sharing various activities, successful case studies, touching stories, and experience exchange. ASUS Foundation prepared appreciation letters to show gratitude to companies and public sectors for their contribution for waste computers and continuous invitation to support this project (reverse recycling, recycled computer contribution, and Eco-Friendly Earth project). The project will add “ASUS Digital Empower Program” in 2014, which will offer warranty for the contribution of computer equipment and free digital teaching materials and digital teaching courses for seed teachers in order to assist non-profit seeking organizations in Taiwan to upgrade or establish their capacity to use digital teaching. (2) Contribution of 2000 TabletPC: To promote the availability of tabletPC in Taiwan and abroad and to encourage students in poverty with diligent study, AUS collaborated with the Ministry of Foreign Affairs, Ministry of Education, and 19 non-profit seeking organizations in Taiwan to distribute tabletPC to the

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museums, libraries, family education center, 22 domestic non-profit seeking organizations in 22 counties and cities of Taiwan and 12 allied countries (Guatemala, Paraguay, Ecuador, Dominic Republic, Peru, El Salvador, Belize, Nicaragua, Mexico, the Philippines, Indonesia, and Malaysia). Continuing from last year (2012), ASUS contributed recycled and new computers to the Ministry of Foreign Affairs and Ministry of Education to help promote computer learning program in young students, disadvantaged or seniors in Taiwan and in allied countries. The TabletPC contributed in 2013 become the tools for promoting mobile service, mobile reading and happiness initiation. The Ministry of Foreign Affairs and the Ministry of Education have presented crystal trophies and letters of appreciation to commend on the long-term commitment in education and cultural charity business by ASUS Foundation. (3) DOC Project and Ministry of Foreign Affairs Project: Digital Gap Shortening project continues (7th year) to establish digital leaning center and hold activities that promote digital learning through ADOC platform and cooperating with non-profit seeking organization via Ministry of Foreign Affairs for computer contribution, ASUS has cooperated with international volunteer teams of domestic universities for the International Volunteer Project since 2011, who jointly visit remote areas in Taiwan or overseas to provide digital teaching services. a. ADOC Project: In addition to the computer contribution, international volunteer project, and picture competition, ADOC Project is added with short-film competition and the “I Can Fly” Internship Competition cooperated between ASUS Philippines and Vietnam, assisting the outstanding youths in poverty with opportunities to work with ASUS. - Picture/Short Film Competition: This is the fourth year in a row for ASUS to co-sponsor ICT competition event with Secretariat to encourage members at the international ADOC digital learning center to share learning experience, technical exchange, and successful stories of digital learning via this platform. The 2010 Blog competition,, 2011 picture competition, and the 2012 and 2013 picture competition and short-term competitions were quite popular and supported by members. There are 10 countries (participants: Chile, Peru, Mexico, Indonesia, Philippines, Vietnam, Thailand, Malaysia, Papua New Guinea, and Russia) participating in the competition. The ADOC website integrates with FB ADOC Facebook to cast votes and undergo professional judges to select 12 teams with the highest scores. The stories of international digital learning are prepared into 2014 calendar to promote digital learning. - Establishing digital learning center: setting up one computer room in Peru, Indonesia and Vietnam. ¾ Peru: 4 digital learning centers established as of 2013. 9 Contributed computers in 201 to assist President Elementary School and World Vision with establishing two computer rooms. 9 Continued to cooperate with World Vision in 2012 to establish third computer room in Andinos, the poorest place in Peru, and to provide students in that area with access to digital learning. 9 Cooperated with PROMPERU for tourism export in 2013 and participated in ADOC in-depth digital counseling project. Established 1 center in Cusco and established Alpaca textile and featured food industry clusters in local area.

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¾ India: 7 digital learning centers established as of 2013. 9 Donated one computer room to KDM (Kampus Diakonia Modern Foundation) in Jakarta, Indonesia in 2009 and assisted the street children foster home in Bekasi. 9 Cooperated with non-profit seeking with the local government in 2010 to establish 5 digital learning centers in Tzu Chi Hongxi River DaAi Village in Indonesia, Indonesia Scripture Digital Leaning Center, two centers in Syiah Kuala University in Indonesia, and Orangutan Center Mobile Car in Sumatra, Aceh Province, Indonesia. Contributed one computer room to Persamuhan Bodhicitta Mandala Indonesia located in Medan in 2013 and assisted disadvantaged group with education. ¾ Vietnam: 13 digital learning centers have been established in Vietnam as of 2013. 9 Contributed computer to Quang Tri Province Government, Vietnam World Vision Phuoc Son District, and Zhi-Shan Foundation Taiwan, Hue Office in 2011 with 10 computer rooms established. 9 Continuing the project in 2012, Zhi-Shan Foundation Taiwan established 2 digital learning centers at the libraries of two elementary schools in Hue, assisting the local children and residents with participation in learning. Contributed computers and established 1 computer room for the Physically and Mentally Disabled and Orphan Protection Association Guang Nam Province of Vietnam in 2013. The Vietnam Physically and Mentally Disabled and Orphan Protection Association is an advisory unit under the central government, which organization is branched out to 40 major cities, provinces and 124 administrative districts, targeting at mentally and physically disabled groups and children without custody. b. Affairs Cooperation Project: Cooperated with the Ministry of Foreign Affairs in 2013 to contribute recycled and new computers. Cooperated with the Taipei Cultural and Economic Offices and Chinese Business Associations in local area and established 28 computer rooms in remote schools in Guatemala, Dominic Republic, Nicaragua, Paraguay, and Ecuador. There are 32 digital learning centers established in Guatemala as of 2013. Particularly, Ambassador Sun, Da-Cheng in Guatemala pays special attention to the project with excellent feedback and performance from all fields. The cooperated now enters the 5th year (2013) of cooperation since 2009. Dominic Republic and Nicaragua cooperated for the second year between 2012 and 2013. ASUS has been able to establish 3~4 ASUS computer rooms each year to help the local students engage in digital learning through the cooperation with Ambassador Hou, Ping-Fu, Ambassador Xie, Ying-Hui and the local schools. Paraguay and Ecuador cooperated for the first time in 2013, where Ambassador Liu, De-Li and Ambassador Zhuang, Zhe-Ming assisted the local schools to establish computer rooms for digital teaching through the contribution of computers from ASUS.

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(4) ASUS World Citizen/International Volunteer Project: Taking off for the first time in 2011, ASUS cooperated with National Chiao-Tung University and National Tsing Hua University in remote towns in Vietnam and Indonesia to carry out digital and eco-friendly teaching, which was quite popular and supported by colleges and universities. ASUS not only completed international volunteer services through industry-university cooperation but also helped the schools foster talents. In 2012, ASUS cooperated with 8 international volunteer teams and 11 international volunteer teams in 6 countries in 2013 respective (Indonesia, India, Vietnam, Thailand, Malaysia, and Tanzania) to provide volunteer teaching activities in environmental protection, healthcare and information telecommunication for remote towns. Additionally, ASUS dispatched employees to participate. The activity was planned and executed by the advisor and students in charge of international volunteering services, combining with ASUS’s contribution of computers to non-profit seeking organizations (digital learning center) and attempt to use green technology and connection with social literacy through the actual commitment to international society. Facebook and volunteer website feature films, photos, and text records, which carry out the idea of ASUS world citizen in sharing the process, learning and interesting and touching stories with the world. 3. Environmental conservation: (1) Continue computer waste reverse logistics plan to protect the earth. (2) Promote green education and relevant activities through international volunteer services. 4. Care for employees: Arrange Employee Assistance Program(EAP) psychological counseling, free eyesight, muscle, and bones checkup, arranging H1N1 vaccine injection onsite, and obeying the operating concept of “incubation, cherish, and care for employees.” 5. Care for minority: “Children Are Us” Bakery stationed in the food court of the headquarters with job opportunities for minority. ASUSTeK included “Children Are Us” on the payroll as a way to care for and feedback the society.

ASUS’s fulfillment of corporate social responsibility: 1. Awarded with the 2012 “Labor Safety and Health Excellence Unit” and “Labor Safety and Health Excellence Personnel” in Taipei City. 2. Adopted Healthy Workplace Certification in 2012. 3. Adopted the Taipei City Excellence in Breastfeeding Certificate in 2011. Still adopted assessment for 2012. 4. The “Corporate Sustainability Report” announced in 2011 and 2012 have been certified by DNV (Det Norske Veritas” and complies with GRI application grade A+ 5. Participated in the “Enterprise Citizen” contest held by CommonWealth Magazine in 2011 and was awarded with the “2011 Best Reputed Benchmark Enterprise” from one of the top ten inter-industries. 6. Awarded the “Excellence in Corporate Social Responsibility of Disclosure” granted by Taiwan Stock Exchange in 2011. 7. Participate in the CDP Supply Chain Program of the Carbon Disclosure Project

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(CDP) in 2010 and 2011; also, asked suppliers to fill out the questionnaires and disclose the responsive strategies of the ASUS suppliers to global change issues. 8. Awarded by Taipei City Government with “Gold Award for Energy Saving” for the first place of Business Group A in 2010. 9. Rated as the “Energy Saving and Carbon Reduction” outstanding unit by Environmental Protection Department in 2010 and awarded with the “Environmental Protection and Energy Saving and Carbon Reduction Mark.” 10. Participated in Taiwan Corporate Sustainability Report Award in 2009 and was awarded with the Honorable Mention Award. Awarded bronze metal for non-manufaturing industry in 2011 and a special award for excellence in coping with climate change. ASUS won the bronze in service industry category in 2012. Awarded with 2013 Service Industry Excellence Award. 11. Participated in “CSR Taiwan Corporate Social Responsibility” of Global Views Magazine in 2010 with the CSR Performance Excellence Award in technology industry awarded. 12. ASUS was awarded with the “Corporate Sustainability Operation Development 1st Place” by the Executive Yuan on December 3, 2007. The recognition had indeed helped build up the faith of consumers in ASUS and it had evidenced the like-a-rock product quality of ASUS and dedication to meet environmental protection standard. Also, ASUS has realized its business commitment to consumers. 13. ASUSTeK was awarded with a “B+” of the “computer and computer peripherals” category in Oekom in 2007, which was the highest rank among the international brands in competition. Please visit the website of ASUS at http://csr.asus.com/english/ for the updated information of corporate social responsibility. Please refer to the following website for ASUS’s business operation report: http://csr.asus.com/chinese/index.aspx#120 http://csr.asus.com/english/index.aspx#114

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(VI) ASUS performs integrity operation and adopts measures Implementation of Integral Operation

Condition and reasons for discrepancy with Item Operations the integral operatin principles of listed companies 1. Develop integral operation policy and No deviation plans (1) The company shall specify explicitly 1. Modesty, Integrity, Diligence, policies of integral operation on the Flexibility, and Bravery are the inborn chapters and external documents as DNA in all ASUS employees while well as the implementation of Board integrity and rightfulness are the core of Directors and managerial level management principles of ASUS. commitment. ASUS has developed the “Employee Moral Conduct Principles” which clearly states that all employees, including the directors, supervisors, and managers shall strictly abide by the performance of relevant integral policies to prevent and eliminate any business conducts of deception. The Annual Report and CSR Report will describes in details the policy of company’s management of integrity as well as the commitment from the Board of Directors and Managerial Level for progressive implementation. (2) The company specifies prevention of 2. To advocate and promote integral non-integral conducts and operating conducts, ASUS not only announces procedures, conduct guidelines and relevant standards on the internal educational training for the solution. website for employee review but also provides training and test on the five characteristics of ASUS, ASUS DNA, ASUS Culture, and employee’s moral conducts. (3) The company adopts prevention of 3. It is specified in “Employee Code of bribery and measures on provision Conduct” that illegitimate political of illegitimate policial contributions contribution, improper charity for business activities with higher donation or sponsorship, and non-integral conduct and risks unreasonsable gifs, treatment or other when formulating the prevention of illegitimate interests are prohibited. non-integral conducts.

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Condition and reasons for discrepancy with Item Operations the integral operatin principles of listed companies 2. Implement integral operations No deviation (1) Avoid transactions with companies 1. To put into effect of avoiding of integral conducts and records in transaction with suppliers of deceitful business activities in addition to conducts, the company also specifying articles related to integral developed Supplier Conduct conducts in business contract. Standards for new suppliers to present “Declaration of ASUS Group Contractor/Supplier Conduct Compliance” upon conducting qualification assessment in addition to requesting transacting suppliers to sign the “Supplier Integrity Commitment Letter.” (2) Establish special (part-time) 2. To improve management of integral department that promotes corporate operation, the Audit Division is integral operations and Board of responsible for formulation of Director supervision. integral operation policies and preventions with responsibilities in the supervision and implementation, as well as routing reporting to the Board of Directors. (3) The company should develop 3. The company already formulated the policies preventing conflicts of relevant regulations related to interests and provide proper prevention of conflicts of interests on channel for explanation. the “Employee Moral and Conduct Principles” and the “Integral Operation Principles.” (4) Implement the effective accounting 4. In addition to establishing proper system established for integral accounting system and internal operation, operation of internal control system, the company may not control system, and auditing by retain external account or secret internal auditors. accounts. The internal auditors shall routinely audit the compliance of previous system in addition to reporting to the Board of Directors. 3. Establish reporting channel and Reporting channel : [email protected] No deviation punishment for violation of integral Punishment and complaint filing system: operation rules as well as the Handled in accordance with the “Work operations for complaint filing Rules “ of the company. system. 4. Strengthen information disclosure No deviation (1) Company website discloses operation 1. Disclose integrity management related information. related information at the company’s Corporate Social Responsibility

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Condition and reasons for discrepancy with Item Operations the integral operatin principles of listed companies (CSR) and investor website when necessary. (2) Company adopting other information 2. In addition to the company website, disclosure (such as English website, disclosre the implementation of assigning specialist with integral operation operation on the responsibility of company financial statement and public information collection and disclosure statement. on company website). 5. For development of integral operation principles according to the “Principles of Integral Operation for Listed Companies,” please explain discrepancy with operations and principles developed: No deviation 6. Other important information that helps the understanding of company integral operation (such as the company determination, policy and invitation to promote company integral operation with transacting suppliers for invitation to participate in education, training, and review for revising the integral operations and principles developed by the company: In addition to this Annual Report, please refer to the information of disclosure related to ASUS’s Corporate Social Responsibility (CSR). (http://csr.asus.com/chinese/index.aspx)

(VII) The company does not have corporate governance rules and regulations defined; therefore, it is not applicable.

(VIII) Other important information that helps understand corporate governance: 1. Execution of Rights for Investor Relationship, Supplier Relationship, Stakeholder Relationship: ASUS upholds to integrity and maintains long-term cooperation for co-prosperity with various business partners. Please attain critical information from the investor relationship website and Corporate Social Responsibility website. 2. Pursuit of Study for Directors: Please refer to the disclosure matters on this Annual Report. 3. Director and Supervisor Liability Insurance: The company has insured liability insurance for all directors and supervisors. 4. Establish a good internal material inside information and disclosure mechanism in accordance with the ASUS “Procedures for Handling Material Inside Information” to avoid improper leakage of information and assure consistency and correctness in the announcement of public ASUS information. The operating procedures and the educational advocacy for relevant laws and regulations should be notified to the company directors, supervisors, managers, and all employees through internal company website, contracts, and courses and announcements for education and training for due compliance of relevant procedures.

Please refer to the “internal rules” of “corporate governance” on the company’s homepage for the operating procedure in details: http://tw.asus.com/investor.aspx

(IX) Enforcement of internal control 1. Declaration of Internal Control: Please refer to Page 142.

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2. If the company is requested by the SEC to retain CPA’s service for examining internal control system, the Independent Auditor’s Report must be disclosed: None

(X) The punishment delivered to the company and the staff of the company, or, the punishment delivered by the company to the staff for a violation of internal control system, the major nonconformity, and the corrective action in the most recent years and up to the date of the annual report printed: None

(XI) Resolutions reached in the Shareholders’ Meeting or by the board of directors in the most recent years and up to the date of the annual report printed: 1. The important resolutions of the general shareholder meeting: Time Subjects Enforcement

June 17, 2013 1. The company’s 2012 financial statements were resolved in the board meeting and audited by the supervisors and CPAs. Case adopted through voting. 2. The company’s 2012 distribution of The base date for retained earnings was presented for dividend distribution was recognition. Case adopted through voting. scheduled on August 14, 2013 and with cash dividend distributed on August 29, 2013. 3. To cooperate with practical operations of Relevant competent units the company, some articles on the shall comply with the “Articles of Incorporation” have been articles upon revision. revised. Case adopted through voting.

2. The important resolutions of the Board of Directors:

Time Subjects Jan 30, 2013 Adopted change for listing and trade location for GDR. Mar 27, 2013 1. Report on IFRS implementation progress (2013 Q1). 2. Adopted IFRS for the first time and report on adjusment to earnings distribution and special surplus reserve provision for reminder. 3. Report on 2012 Operations. 4. Recognition of ASUS 2012 Final Accounts and Consolidated Financial Statements. 5. Recognized 2012 ASUS Earning distribution. 6. Adopted proposition for 2012 ASUS “Declaration for Internal Control System Declaration”. 7. Adopted matters for convening 2013 ASUS shareholder meeting. May 3, 2013 1. Report on the acceptance of shareholder proposition at the Shareholders’ Meetings this year. 2. Adopted revision to “Articles of Incorporation”. 3. Adopted revision to the matters for convening 2013 ASUS shareholder meeting. May 14, 2013 Report on Consolidated Financial Statements and Review Report (2013 Q1) Jul 1, 2013 Discussion on buying back company stocks through ASUS. Jul 19, 2013 Adopted record date for 2012 ASUS Cash Dividend Payout Ratio.

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Time Subjects Aug 13, 2013 Report on Consolidated Financial Statements and Review Report (2013 Q2) Nov 12, 2013 1. Report on Consolidated Financial Statements and Review Report (2013 Q3) 2. Report on the execution of buyback of company treasure stock. 3. Adopted and developed base date of capital reduction for nullification of treasury stocks. 4. Adopted revision to “Procedures For Acquisition or Disposal of Assets”. 5. Adopted revision on “Internal Control and Self-Inspection Operation Procedures. 6. Adopted Proposition for “2013 Annual Audit Plan”. Jan 21, 2014 Adopted contribution to “ASUS CULTURAL AND EDUCATIONAL FOUNDATION.” Mar 27, 2014 1. Report on 2013 Operations. 2. Recognition of ASUS 2013 Final Accounts and Consolidated Financial Statements and Report. 3. Recognized 2013 ASUS Earning distribution. 4. Adopted revision to “Procedures For Acquisition or Disposal of Assets”. 5. Adopted proposition for 2013 ASUS “Declaration for Internal Control System Declaration”. 6. Adopted proposition for the 10th director and supervisor re-election. 7. Adopted Board of Director’s proposal of 10th directors and supervisor candidate list. 8. Adopted matters for convening 2014 ASUS shareholder meeting.

(XII) The directors or supervisors who have objected to the resolutions reached by the board of directors and the objections are recorded or declared in writing in the most recent years and up to the date of the annual report printed: None

(XIII) Summarization of resignation for company chairman, general manager, accounting supervisor, financial supervisor, internal audit supervisor, and R&D supervisor for the latest year and as of the print date of the Annual Report: None. ! IV. CPAs fees

CPA firm CPA Auditing period Note PricewaterhouseCoopers, CHOU TSENG HSUEH Jan 1, 2013~ Taiwan HUI-CHIN MING-LING Dec 31, 2013 Unit: NT$ thousands !!!!!!!!!!!!!!!!! The tem of CPAs fee Auditing fees Non-auditing fees! Total Amount bracket 1 Below 2,000 thousand V 2 2,000 thousandsȐincludedȑ~4,000 thousand 3 4,000 thousandsȐincludedȑ~6,000 thousand 4 6,000 thousandsȐincludedȑ~8,000 thousand V V 5 8,000 thousandsȐincludedȑ~10,000 thousand 6 Over 10,000 thousandȐincludedȑ

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(I) The non-auditing fees paid to CPAs, CPA firm, and the CPA firm’s related party accounted for over a quarter of the total auditing fees, the auditing amount and non-auditing amount; also, the non-auditing service must be disclosed:

Non-auditing fees Auditing Auditing CPA firm CPA Industrial and Note fees System Human period commercial Others Total resources design registration CHOU Non-audit fees - Others include Pricewater TSENG foreign investment financial Jan 1, 2013~ houseCoopers, HUI-CHIN 7,800 0 0 0 105 105 report and audit opoinion, Taiwan Dec 31, 2013 treasury stock opinion and HSUEH change of registration service. MING-LING (II) If the auditing fee paid in the year retaining service from another CPA Firm is less than the auditing fee paid in the year before, the amount of auditing fee before and after the change of CPA Firm and the reasons for the said change must be disclosed: None.

(III) If the auditing fee paid in the year retaining service from another CPA Firm is over 15% less than the auditing fee paid in the year before, the amount and ratio of auditing fee reduced and the reasons for the said change must be disclosed: None.

V. CPA’s information: None.

VI. If the chairman, president, and financial or accounting manager of the company who had worked for the independent auditor or the related party in the most recent year, the name, title, and the term with the independent auditor or the related party must be disclosed: None.

VII. Information on Net Change in Shareholding and Net Change in Shares Pledged by Directors, Supervisors, Department Heads and Shareholders of 10% Shareholding or More: (1) Information on Net Change in Shareholding

2013 As of April 19, 2014

Title Name Net Change in Net Change in Net Change in Net Change in Shareholding Share Pledged Shareholding Share Pledged

Chairman & Chief Jonney Shih 0 0 0 0 Branding Officer Vice Chairman & Jonathan Tsang 0 0 0 0 President Director & Chief Jerry Shen 355,000 0 0 0 Executive Officer

Director Eric Chen 0 0 0 0

Director & S.Y. Hsu 0 0 0 0 Corporate V.P. Director & Joe Hsieh 0 0 0 0 Corporate V.P. Director & Samson Hu 0 0 0 0 Corporate V.P. Supervisor Tze-Kaing Yang 0 0 0 0 Chung-Jen Supervisor 0 0 0 0 Cheng

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2013 As of April 19, 2014

Title Name Net Change in Net Change in Net Change in Net Change in Shareholding Share Pledged Shareholding Share Pledged

Supervisor L.H. Yang 0 0 0 0

Corporate V.P. Henry Yeh 0 0 0 0

Corporate V.P. Benson Lin 0 0 0 0

Corporate V.P. Alex Sun 0 0 0 0 Chief Financial David Chang 10,000 0 0 0 Officer Note: The parties involved in shares transfer or equity pledge are known as the related party and they must have the following forms filled out.

(2) Information of shares transferred: There is no party involved in shares transfer known as the related party. (3) Information of equity pledged: There is no party involved in equity pledge knows as the related party.

VIII. The relation of the top ten shareholders as defined in the Finance Standard Article 6: The relation and Shares held name of the top Shareholding of by other ten shareholders as Shareholding Name spouse and minor persons in defined in the their name Finance Standard Article 6 Shares % Shares % Shares % Name Relation

Jonney Shih 30,093,638 4.05% 0 0 0 0 None None

ASUS’s Certificate of Depository with 28,166,807 3.79% 0 0 0 0 None None CitiBank (Taiwan) Standard Chartered managed Infinite 20,869,542 2.81% 0 0 0 0 None None Growth Companies Chase Bank managed Saudi Arabia Central 18,743,013 2.52% 0 0 0 0 None None Bank investment account Governemnt of Singapore Investment 14,487,340 1.95% 0 0 0 0 None None Commissioned to Citibank (Taiwan) Standard Chartered managed Van Gardner emerging 12,641,458 1.70% 0 0 0 0 None None market stock index fund account

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The relation and Shares held name of the top Shareholding of by other ten shareholders as Shareholding Name spouse and minor persons in defined in the their name Finance Standard Article 6 Shares % Shares % Shares % Name Relation Labor Insurance 11,939,040 1.61% 0 0 0 0 None None Funds ASUS’s Royal Bank of Scotland FS Pacific 10,548,000 1.42% 0 0 0 0 None None Investment Account with CitiBank Invesco Greater China Equity Fund 9,715,000 1.31% 0 0 0 0 None None with JPM Invesco Funds Abu Dhabi Investment Authority Account 8,925,613 1.20% 0 0 0 0 None None with JPMorgan Chase & Co.,

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IX. Investments of Directors, Supervisors, Managers and directly or indirectly controlled business on the reinvested business and the total shareholding ratio:

Total Shareholding Ratio Baseline date: 12.31.2013, Unit: Share; % Investments from Directors, Supervisors, Investment of the Managers and directly or Total Investment Company Reinvestment Indirectly Controlled Business Shares % Shares % Shares % ASUS TECHNOLOGY 19,000,000 100.00 19,000,000 100.00 INCORPORATION ASKEY COMPUTER CORP. 693,304,205 100.00 693,304,205 100.00 ENERTRONIX, INC. 40,238,437 100.00 40,238,437 100.00 AGAIT TECHNOLOGY 30,000,000 100.00 30,000,000 100.00 CORPORATION HUA-CHENG VENTURE 114,500,000 100.00 114,500,000 100.00 CAPITAL CORP. HUA-MIN INVESTMENT 68,000,000 100.00 68,000,000 100.00 CO., LTD. UNIMAX ELECTRONICS 21,300,000 100.00 21,300,000 100.00 INC. WAVEFACE INC. 15,916,000 100.00 15,916,000 100.00 (be liquidated) AXUS MICROSYSTEMS 10,045,980 84.99 1,000 0.01 10,046,980 85.00 INC. ASUS CLOUD 25,027,789 83.43 25,027,789 83.43 CORPORATION ASMEDIA TECHNOLOGY 24,748,727 43.89 6,955,947 12.34 31,704,674 56.23 INC. AAEON TECHNOLOGY 45,120,000 47.00 17,280,000 18.00 62,400,000 65.00 INC. INTERNATIONAL UNITED 11,402,092 56.73 11,402,092 56.73 TECHNOLOGY CO., LTD. UPI SEMICONDUCTOR 33,812,819 37.50 13,101,500 14.53 46,914,319 52.03 CORP. SHINEWAVE 5,468,750 50.99 1,000 0.01 5,469,750 51.00 INTERNATIONAL INC. JOINT POWER EXPONENT, 640,000 22.86 560,000 20.00 1,200,000 44.86 LTD. YU-LIAN TECHNOLOGY 5,250,000 16.55 2,625,000 8.28 7,875,000 24.83 CO., LTD. JIE-LI TECHNOLOGY CO., 2,317,888 7.15 4,111,660 12.67 6,429,548 19.82 LTD. ASUS COMPUTER 50,000 100.00 50,000 100.00 INTERNATIONAL ASUS HOLLAND B.V. 3,000,000 100.00 3,000,000 100.00 ASUS INTERNATIONAL 89,730,042 100.00 89,730,042 100.00 LIMITED ASUSTEK HOLDINGS 20,452,104 100.00 20,452,104 100.00 LIMITED

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Investments from Directors, Supervisors, Investment of the Managers and directly or Total Investment Company Reinvestment Indirectly Controlled Business Shares % Shares % Shares % ASUS GLOBAL PTE.LTD 280,000,000 100.00 280,000,000 100.00 CENTRAL TEC ASIA 2,120,000 100.00 2,120,000 100.00 LIMITED (Liquidated) DEEP DELIGHT LIMITED 11,422,000 100.00 11,422,000 100.00 CHANNEL PILOT LIMITED 30,033,000 100.00 30,033,000 100.00 ASUS TECHNOLOGY PTE. 44,419,424 100.00 44,419,424 100.00 LIMITED ASUS EGYPT L.L.C. - 100.00 - 100.00 ASUS MIDDDLE EAST 5 100.00 5 100.00 FZCO ASUS COMPUTER - 100.00 - 100.00 (SHANGHAI) CO., LTD. ASUS TECHNOLOGY 500,000 100.00 500,000 100.00 (HONG KONG) LIMITED ASUS TECHNOLOGY - 100.00 - 100.00 (SUZHOU) CO., LTD. ASUSTEK COMPUTER - 100.00 - 100.00 (SHANGHAI) CO. LTD. ASUSTEK Computer - 100.00 - 100.00 (Chongqing) CO., LTD. ASUS INVESTMENTS - 100.00 - 100.00 (SUZHOU) CO., LTD. ASUS COMPUTER GMBH - 100.00 - 100.00 ASUS COMPUTER - 100.00 - 100.00 BENELUX B.V. ASUS FRANCE SARL 5,300 100.00 5,300 100.00 ASUSTEK (UK) LIMITED 50,000 100.00 50,000 100.00 ASUS KOREA CO., LTD. 358,433 100.00 358,433 100.00 ASUSTEK COMPUTER (S) 20,002 100.00 20,002 100.00 PTE, LTD. ASUS POLSKA SP. Z O.O. 1,000 100.00 1,000 100.00 ASUS TECHNOLOGY 20,134,400 100.00 20,134,400 100.00 PRIVATE LIMITED ASUS TECHNOLOGY 375,000 100.00 375,000 100.00 HOLLAND B.V. ASUS TECHNOLOGY - 100.00 - 100.00 (VIETNAM) CO., LTD. ASUSTEK ITALY S.R.L. - 100.00 - 100.00

ASUS IBERICA S.L 3,000 100.00 3,000 100.00 ASUS JAPAN 20,500 100.00 20,500 100.00 INCORPORATION

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Investments from Directors, Supervisors, Investment of the Managers and directly or Total Investment Company Reinvestment Indirectly Controlled Business Shares % Shares % Shares % ASUS COMPUTER CZECH - 100.00 - 100.00 REPUBLIC S.R.O. ASUS CZECH SERVICE - 100.00 - 100.00 S.R.O. ASUS SERVICE 950,000 100.00 950,000 100.00 AUSTRALIA PTY LIMITED ASUS AUSTRALIA PTY 350,000 100.00 350,000 100.00 LIMITED ASUS INDIA PRIVATE 33,500,000 100.00 33,500,000 100.00 LIMITED ASUS ISRAEL - 100.00 - 100.00 (TECHOLOGY) LTD. ASUS SERVICE INDONESIA 1,500,000 100.00 1,500,000 100.00 PTE. LTD. ACBZ IMPORTACAO E 110,370,000 100.00 110,370,000 100.00 COMERCIO LTDA. ASUS PERU S.A.C. 1,000 100.00 1,000 100.00 ASUS SERVICE INDONESIA 1,500,000 100.00 1,500,000 100.00 PTE. LTD. ASUS HOLDINGS MEXICO, 51,120 100.00 51,120 100.00 S.A. DE C.V. ASUS MEXICO, S.A. DE C.V. 132 100.00 132 100.00 ASUS HUNGARY SERVICES LIMITED - 100.00 - 100.00 LIABILITY COMPANY ASUS PORTUGAL, SOCIEDADE UNIPESSOAL 30,000 100.00 30,000 100.00 LDA. ASUS SWIZERLAND GMBH 3,400 100.00 3,400 100.00 ENERTRONIX HOLDING 11,270,551 100.00 11,270,551 100.00 LIMITED ENERTRONIX 10,000 100.00 10,000 100.00 INTERNATIONAL LIMITED ENERTRONIX (HUIZHOU) - 100.00 - 100.00 LTD. eMES (SHUZHOU) CO., LTD. - 100.00 - 100.00 UNIMAX HOLDINGS 6,500,000 100.00 6,500,000 100.00 LIMITED WAVEFACE HOLDING 14,000,000 76.40 14,000,000 76.40 COMPANY LIMITED AGAIT TECHNOLOGY (H.K.) CORPORATION 18,820,000 100.00 18,820,000 100.00 LIMITED

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Investments from Directors, Supervisors, Investment of the Managers and directly or Total Investment Company Reinvestment Indirectly Controlled Business Shares % Shares % Shares % AGAITECH HOLDING LTD. 1,000,000 100.00 1,000,000 100.00 AGAIT TECHNOLOGY - 100.00 - 100.00 (SHENZHEN) LIMITED AGAIT INTELLIGENT TECHNOLOGY - 100.00 - 100.00 (SHENZHEN) CO. LIMITED INTERNATIONAL UNITED - 100.00 - 100.00 TECHNOLOGY CO., LTD. GREAT EXTEND 691,856 100.00 691,856 100.00 INVESTMENT CORP. ASUS CLOUD SINGAPORE 1 100.00 1 100.00 PTE. LTD. ASUS CLOUD - 100.00 - 100.00 (LUXEMBOURG)S.A.R.L ASUS CLOUD (TIANJIN) INFORMATION - 100.00 - 100.00 TECHNOLOGY CO., LTD. ASKEY INTERNATIONAL 3,700,000 100.00 3,700,000 100.00 CORP. DYNALINK 11,160,172 100.00 11,160,172 100.00 INTERNATIONAL CORP. MAGIC INTERNATIONAL 117,525,738 100.00 117,525,738 100.00 CO., LTD. ASKEY (VIETNAM) COMPANY LIMITED 2,883,359 100.00 2,883,359 100.00 (be liquidated) WISE ACCESS (HK) LIMITED 1,600,000 100.00 1,600,000 100.00 SILIGENCE SAS 780,000 80.00 780,000 80.00 MAGICOM 91,030,000 100.00 91,030,000 100.00 INTERNATIONAL CORP. LEADING PROFIT CO., 25,050,000 100.00 25,050,000 100.00 LTD. UNI LEADER 50,000 100.00 50,000 100.00 INTERNATIONAL LTD. OPENBASE LIMITED 50,000 100.00 50,000 100.00 ASKEY COMMUNICATION 100,000 100.00 100,000 100.00 GMBH ASKEY TECHNOLOGY - 100.00 - 100.00 (SHANGHAI) LTD. ASKEY TECHNOLOGY - 100.00 - 100.00 (JIANGSU) LTD. ASHINE TECHNOLOGY (SUZHOU) LTD. - 100.00 - 100.00 (be liquidated)

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Investments from Directors, Supervisors, Investment of the Managers and directly or Total Investment Company Reinvestment Indirectly Controlled Business Shares % Shares % Shares % ASKEY MAGICXPRESS - 100.00 - 100.00 (WUJIANG) CORP. AAEON ! ! 490,000 100.00 490,000 100.00 ELECTRONICS,INC. AAEON ! ! 559,822 100.00 559,822 100.00 DEVELOPMENT,INC. AAEON TECHNOLOGY ! ! 8,807,097 100.00 8,807,097 100.00 CO.,LTD AAEON TECHNOLOGY(EUROPE) ! ! 1,000 100.00 1,000 100.00 B.V. AAEON TECHNOLOGY ! ! 300 100.00 300 100.00 GMBH AAEON INVESTMENT CO., ! ! 15,000,000 100.00 15,000,000 100.00 LTD. ONYX HEALTHCARE INC. ! ! 8,211,000 85.00 8,211,000 85.00 AAEON TECHNOLOGY ! ! 465,840 100.00 465,840 100.00 SINGAPORE PTE. LTD. AAEON TECHNOLOGY ! ! - 100.00 - 100.00 (SUZHOU) INC. ONYX HEALTHCARE USA, ! ! 10,000,000 100.00 10,000,000 100.00 INC. ONYX HEALTHCARE 100,000 100.00 100,000 100.00 EUROPE B.V. UBIQ SEMICONDUCTOR 20,000,000 100.00 20,000,000 100.00 CORP. UPI SEMICONDUCTOR 765,000 100.00 765,000 100.00 CORPORATION (HK) LTD. NOVELTEK 1,950,000 53.76 1,950,000 53.76 SEMICONDUCTOR CORP. UPI-SEMICONDUCTOR CORPORATION - 100.00 - 100.00 (SHENZHEN) LTD. NEXT SYSTEM LIMITED 8,560,974 43.48 8,560,974 43.48 POTIX CORPORATION ! ! 5,000,000 22.22 5,000,000 22.22 (CAYMAN) LITEMAX ELECTRONICS ! ! 7,399,219 21.69 7,399,219 21.69 INC. ATECH OEM INC. ! ! 11,436,773 15.73 11,436,773 15.73 Note 1: Company investment under Equity Method. Note 2: (*) Standards for the English transliteration of company’s name or individual’s name.

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IV. Stock Subscription

I. Capital and shares (1) History of capitalization 1. Type of shares April 19, 2014 / Unit: Shares Authorized Shares Type of Shares Outstanding Shares Remarks Unissued shares Total (Note) Order common 742,760,280 4,007,239,720 4,750,000,000 stock Note: Listed stock

2. Stock capital Authorized shares Issued shares Remarks Month / Par value Approval date and Shares Amount Shares Amount Non-monetary approval no. of Year (NT$) Source of capital (1,000) ($1,000) (1,000) ($1,000) capital capitalization by the SEC, Ministry of Finance 1990.03 10 3,000 30,000 3,000 30,000 Incorporation ɡ ɡ 1990.11 10 8,000 80,000 8,000 80,000 Cash $50 million ɡ ɡ Cash $40 million 1991.12 10 15,000 150,000 15,000 150,000 Retained earnings $30 ɡ ɡ million 1993.04 10 19,900 199,000 19,900 199,000 Cash $49 million ɡ ɡ 1993.08.27 SFE Ruling Retained earnings 1993.09 10 30,845 308,450 30,845 308,450 ɡ (82) Tai-Tsai-Cheng (1) $109.45 million No. 30832 1994.07.21 SFE Ruling Retained earnings 1994.08 10 45,033.7 450,337 45,033.7 450,337 ɡ (83) Tai-Tsai-Cheng (1) $141.887 million No. 32675 1995.06.15 SFE Ruling Retained earnings 1995.06 10 60,000 600,000 60,000 600,000 ɡ (84) Tai-Tsai-Cheng (1) $149.663 million No. 35196 Cash $12 million 1996.06.28 SFE Ruling 1996.09 10 200,000 2,000,000 120,000 1,200,000 Retained earnings $588 ɡ (85) Tai-Tsai-Cheng (1) million No. 40947 1997.05.05 SFE Ruling Cash (GDR) $210 (86) Tai-Tsai-Cheng (1) million No. 30903 1997.05 10 650,000 6,500,000 323,000 3,230,000 ɡ Retained earning $1.82 1997.04.17 SFE Ruling billion (86) Tai-Tsai-Cheng (1) No. 30279 1998.05.21 SFE Ruling Retained earning $4.885 1998.06 10 1,400,000 14,000,000 811,500 8,115,000 ɡ (87) Tai-Tsai-Cheng (1) billion No. 44748 1998.08.30 SFE Ruling 1998.10 10 1,400,000 14,000,000 813,500 8,135,000 Cash $20 million ɡ (87) Tai-Tsai-Cheng (1) No. 35007 1999.05.20 SFE Ruling Retained earning $3.314 1999.06 10 1,400,000 14,000,000 1,144,900 11,449,000 ɡ (88) Tai-Tsai-Cheng (1) billion No. 47786 1999.06.16 SFE Ruling 1999.08 10 1,400,000 14,000,000 1,146,400 11,464,000 Cash $15 million ɡ (88) Tai-Tsai-Cheng (1) No. 53605 2000.05.26 SFE Ruling Retained earnings 2000.06 10 2,000,000 20,000,000 1,567,104 15,671,040 ɡ (89) Tai-Tsai-Cheng (1) $4.20704 billion No. 45450 1,976,880 2001.06.06 SFE Ruling Retained earnings 2001.06 10 2,100,000 21,000,000 19,768,800 ɡ (90) Tai-Tsai-Cheng (1) $4.09776 billion No. 135654 2002.06.26 SFE Ruling Retained earnings $220 2002.07 10 2,100,000 21,000,000 1,998,880 19,988,800 ɡ (91) Tai-Tsai-Cheng (1) million No. 0910134921

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Authorized shares Issued shares Remarks Month / Par value Approval date and Shares Amount Shares Amount Non-monetary approval no. of Year (NT$) Source of capital (1,000) ($1,000) (1,000) ($1,000) capital capitalization by the SEC, Ministry of Finance 2003.07.08 SFE Ruling Retained earnings 2003.07 10 2,450,000 24,500,000 2,281,740 22,817,400 ɡ Tai-Tsai-Cheng (1) No. $2.8286 billion 0920130466 2004.07.12 FSC Ruling Retained earnings 2004.08 10 2,872,000 28,720,000 2,552,914 25,529,140 ɡ Jin-Kwong-Cheng (1) No. $2.71174 billion 0930130836 2005.06.23 FSC Ruling Retained earnings 2005.07 10 3,380,000 33,800,000 2,861,205 28,612,054 ɡ Jin-Kwong-Cheng (1) No. $3.082914 billion 0940125161 2005.12.22 FSC Ruling Stock shares 2005.12 10 3,380,000 33,800,000 2,920,798 29,207,982 ɡ Jin-Kwong-Cheng (1) No. $595,928,350 0940157381 Convertible bond for 2006.02.03 Jin-So-Son-Tzi 2006.01 10 3,380,000 33,800,000 2,924,521 29,245,209 ɡ stock $37,226,200 No. 09501019910 2006.01.13 FSC Ruling Jin-Kwong-Cheng (1) No. Stock shares 0940161197 2006.03 10 3,380,000 33,800,000 2,998,184 29,981,838 ɡ $736,629,610 2006.02.27 FSC Ruling Jin-Kwong-Cheng (1) No. 0950106726 Convertible bond for 2006.04.21 Jin-So-Son-Tzi 2006.04 10 3,380,000 33,800,000 3,040,064 30,400,638 ɡ stock $418,799,510 No. 09501073310 2006.06.27 FSC Ruling Retained earnings 2006.08 10 3,860,000 38,600,000 3,407,070 34,070,701 ɡ Jin-Kwong-Cheng (1) No. $3.67006377 billion 0950126632 Convertible bond for 2007.04.26 Jin-So-Son-Tzi 2007.04 10 3,860,000 38,600,000 3,412,083 34,120,829 ɡ stock $50,127,660 No. 09601090540 2007.06.29 FSC Ruling Retained earnings 2007.09 10 4,250,000 42,500,000 3,652,687 36,526,871 ɡ Jin-Kwong-Cheng (1) No. $2.40604146 billion 0960033204 2007.08.27 FSC Ruling Stock share 2007.09 10 4,250,000 42,500,000 3,682,512 36,825,116 ɡ Jin-Kwong-Cheng (1) No. $298,245,610 0960044647 Convertible bond for 2007.10.22 Jin-So-Son-Tzi 2007.10 10 4,250,000 42,500,000 3,708,507 37,085,068 ɡ stock $259,951,830 No. 09601256950 Convertible bond for 2008.01.17 Jin-So-Son-Tzi 2008.01 10 4,250,000 42,500,000 3,728,359 37,283,589 ɡ stock $198,521,460 No. 09701012350 Convertible bond for 2008.05.13 Jin-So-Son-Tzi 2008.04 10 4,250,000 42,500,000 3,740,652 37,406,517 ɡ stock $122,927,710 No. 09701109460 Convertible bond for 2008.08.19 Jin-So-Son-Tzi 2008.08 10 4,250,000 42,500,000 3,751,832 37,518,315 ɡ stock $111,798,020 No. 09701207890 Retained earnings 2008.07.17 Jin-So-Son-Tzi 2008.09 10 4,750,000 47,500,000 4,245,897 42,458,967 ɡ $4.94065172 billion No. 0970036193 Convertible bond for 2008.10.22 Jin-So-Son-Tzi 2008.10 10 4,750,000 47,500,000 4,246,051 42,460,513 ɡ stock $1,545,780 No. 09701269640 Purchased Treasury stock for cancellation 2009.07.15 Jin-So-Son-Tzi 2009.07 10 4,750,000 47,500,000 4,219,926 42,199,262 ɡ with decrease of No. 09801153240 $261,250,000 Retained earnings 2009.07.01 Jin-So-Son-Tzi 2009.08 10 4,750,000 47,500,000 4,246,777 42,467,77 ɡ $268,512,150 No. 0980032762 spin-off and capital 2010.04.09 Jin-So-Son-Tzi 2010.06 10 4,750,000 47,500,000 637,016 6,370,166 reduction ɡ No. 0990013609 $36,097,608,610 Purchased Treasury stock for cancellation 2010.09.14 Jin-So-Son-Tzi 2010.09 10 4,750,000 47,500,000 627,016 6,270,166 ɡ with decrease of No. 09901209730 $100,000,000 Purchased Treasury stock for cancellation 2011.04.01 Jin-So-Son-Tzi 2011.03 10 4,750,000 47,500,000 617,016 6,170,166 ɡ with decrease of No. 10001064750 $100,000,000 Retained earnings 2011.06.29 Jin-So-Son-Tzi 2011.08 10 4,750,000 47,500,000 752,760 7,527,603 ɡ $1,357,436,570 No. 1000030060 Purchased Treasury stock for cancellation 2013.11.21 Jin-So-Son-Tzi 2013.11 10 4,750,000 47,500,000 742,760 7,427,603 ɡ with decrease of No. 10201237880 $100,000,000 3. Self-registration system: None

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(2) Status of shareholders Status of Shareholders April 19, 2014 Status of Domestic Foreign Government Financial Other Juridical shareholders Natural Institutions & Total Agencies Institutions Persons QTY Persons Natural Persons Number of 6 21 457 117,274 1,287 119,045 Shareholders Shareholding 7,014 23,663,861 82,131,650 212,811,288 424,146,467 742,760,280

Shareholding ratio (%) 0.00 3.19 11.06 28.65 57.10 100.00

(3) Status of Shareholding Distributed

1. Status of Shareholding Distributed April 19, 2014 Number of Shareholding Classification Shareholding Shareholder Ratio 1- 999 88,462 22,253,675 3.00 1,000- 5,000 25,782 47,393,699 6.38 5,001- 10,000 2,189 15,834,910 2.13 10,001- 15,000 701 8,685,090 1.17 15,001- 20,000 338 6,035,418 0.81 20,001- 30,000 350 8,723,139 1.17% 30,001- 50,000 319 12,615,617 1.68% 50,001- 100,000 333 24,370,128 3.24% 100,001- 200,000 258 37,465,958 4.98% 200,001- 400,000 173 48,683,100 6.47% 400,001- 600,000 64 30,919,811 4.11% 600,001- 800,000 37 25,807,166 3.43% 800,001-1,000,000 20 18,016,867 2.39% Over 1,000,001 114 452,148,324 60.06% Total 124,237 752,760,280 100.00%

2. Preferred Stock Shares: None

(4) Roster of Major Shareholders Roster of Major Shareholders

As of April 19, 2014

Shareholding Shareholding Shareholding Ratio (%) Shareholder’s Name Jonney Shih 30,093,638 4.05%

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Shareholding Shareholding Shareholding Ratio (%) Shareholder’s Name ASUS’s Certificate of Depository with CitiBank 28,166,807 3.79% (Taiwan) Standard Chartered managed Infinite Growth 20,869,542 2.81% Companies Chase Bank managed Saudi Arabia Central Bank 18,743,013 2.52% investment account Governemnt of Singapore Investment 14,487,340 1.95% Commissioned to Citibank (Taiwan) Standard Chartered managed Van Gardner 12,641,458 1.70% emerging market stock index fund account Labor Insurance Funds 11,939,040 1.61% ASUS’s Royal Bank of Scotland FS Pacific 10,548,000 1.42% Investment Account with CitiBank Invesco Greater China Equity Fund with JPM 9,715,000 1.31% Invesco Funds Abu Dhabi Investment Authority Account with 8,925,613 1.20% JPMorgan Chase & Co.,

(5) Market Price, Net Worth, Earnings & Dividend per Share of the Last Two Years Market Price, Net Worth, Earnings & Dividend per Share Unit: NT$/Share Fiscal year As of March 31, 2012 2013 Item 2014 (Note 9) Market price per Max. 342 382 304 share Min. 212 204 267 (Note 1) (Note 3) Average 287.28 288.64 287.35 Net worth per Before appropriation 167.38 182.02 - share (Note 2) After appropriation 148.38 (Note 8) 752,760 748,395 Weighted average shares thousand thousand - (Note 3) shares shares Earnings per share Earnings per Before adjustment 29.84 28.66 - shares (Note 3) After adjustment 29.84 (Note 8) Cash dividends 19.00 (Note 8) - Stock dividends from Retained 0 (Note 8) - earnings Dividends per Stock share dividends Stock dividends from Additional 0 (Note 8) - paid-in capital Accumulated unpaid dividends - - - (Note 4) Price/Earning Ratio (Note 5) 9.63 10.07 - Analysis of return Price/Dividend Ratio (Note 6) 15.12 (Note 8) - on investment Cash dividends yield rate (Note 7) 6.61ʘ (Note 8) - Note 1: List the highest and lowest market price per share; also, calculate the average market price per share in accordance with the trade amount and shares. Note 2: Please base the information on the shares issued at yearned and the resolution for stock distribution in shareholders meeting. Re-calculated according to IFRS. Note 3: If the stock dividend is to be adjusted retroactively, please list the earnings per share before and after the

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adjustment. Re-calculated according to IFRS. Note 4: According to the regulations of security issuance, if the dividend that is not distributed can be accumulated till the year with retained earnings, the accumulated unpaid dividend of the year must be disclosed. Note 5: Profit ratio = Closing price per share of the year / Earning per share. Re-calculated according to IFRS. Note 6: Earning ratio = Closing price per share of the year / Cash dividend per share Note 7: Cash dividend yield rate = Cash dividend per share / Closing price per share of the year Note 8: Subject to the approval of the annual shareholders meeting. Note 9: The data collected up to March 31, 2014 were included in the report printed on April 19, 2014 for data accuracy.

(6) Execution of Dividend Policy

1. Dividend Policy The annual final net profit of the company should be appropriated for taxation to make up for the past loss, followed by appropriating 10% of the net profit as statutory surplus reserve. Nonetheless, the appropriation does not apply when the statutory surplus reserve reaches the total paid-in capital of the company. Additionally, for the appropriation or reversal of special reserve specified by the laws and regulations of the competent authority, the balance will be deducted of 10% of the stock dividend , then appropriated of no less than 1% as employee dividend and less than 1% as remuneration for directors and supervisors. When paying the employee dividend through stocks, the objects must include employees of affiliated companies and the remaining balance added with the cumulative undistributed surplus from previous year, which will be distributed upon reaching resolution at the Shareholders’ Meeting through the distribution proposal developed by the Board of Directors. In a turbulent industry environment, the company faces with a growing stage for its corporate life cycle. In consideration of the company’s long-term financial plan and the meeting shareholder demand for cash flow. The cash dividend issued each year shall not remain lower than 10% of the sum of cash dividend and stock dividend. In the coming one year, the aforementioned dividend policy shall apply. 2. Proposed Distribution of Dividends: (1) The 2013 net income after tax was NT$ 21,449,894,566; when added with other comprehensive net income and nullification of treasury stock, the 2013 divisible earning became NT$ 19,070,337,546, which added with the retained earnings of NT$ 70,995,786,504 from previous year to yield a divisible earning of NT$ 90,066,124,050. After appropriating statutory surplus reserve of NT$ 2,144,989,457, that was distributed in accordance with the “Articles of Incorporation” as follows (Please refer to the distribution of retained earrings table for details): i. Shareholder dividend: NT$ 742,760,280, distributed in cash. ii. Shareholder cash dividends: NT$ 13,741,065,180, distributed in cash. (2) If shareholder’s cash dividend is less than NT$ 1, the distribution will be made in the form of cash rounded and adjusted by a specific represent arranged by the Chairman of the Board of Directors. (3) For earnings distribution, in case of changes in outstanding shares that causes changes in payout ratios and require modification, the shareholder meeting is hereby requested to authorize the board of directors for process within the scope of the said amount and stock shares. (4) The board of directors is authorized upon the resolution of the general shareholder meeting to define the dividend, distribution base date, and the related events.

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Distribution of Retained Earnings

In 2013 Unit: NT$ Subject Amount Note Unappropriated earnings (before adjustments) - 70,598,136,687 beginning (+)Net adjustment after converting IFRS 397,649,817 Unappropriated earnings (before adjustments) - 70,995,786,504 bii (+)2013 Net Income 21,449,894,566 2013 other comprehensive net income (10,492,344) Treasury stock cancelled (2,369,064,676) 2013 Distributable earnings 19,070,337,546 Distributable earnings - current 90,066,124,050 Appropriated 10% legal reserve 2,144,989,457 Distributions: Shareholder dividend (10%) 742,760,280 NT$1 per share Shareholder bonus 13,741,065,180 NT$18.5 per share 2013 Unappropriated earnings 2,441,522,629 Unappropriated earnings - ending 73,437,309,133 Notes: Distribution of employee bonus 928,107,242 Distribution of compensation of directors 185,621,448 Note: The proposed profit distribution is allocated from 2012 retained earnings available for distribution.

(7) Impact of the proposed stock dividend in shareholders meeting on business performances and EPS: None Note: The Company did not have financial forecast proposed up to the date of the annual report printed.

(8) Bonus to employees and remuneration to directors and supervisors 1. Information of dividend to employee and remuneration to directors and supervisors was The annual final net profit of the company should be appropriated for taxation to make up for the past loss, followed by appropriating 10% of the net profit as statutory surplus reserve. Nonetheless, the appropriation does not apply when the statutory surplus reserve reaches the total paid-in capital of the company. Additionally, for the appropriation or reversal of special reserve specified by the laws and regulations of the competent authority, the balance will be deducted of 10% of the stock dividend, then appropriated of no less than 1% as employee dividend and less than 1% as remuneration for directors and supervisors. When paying the employee dividend through stocks, the objects must include employees of affiliated companies and the remaining balance added with the cumulative undistributed surplus from previous year, which will be distributed upon reaching resolution at the Shareholders’ Meeting through the distribution proposal developed by the Board of Directors.!

2. Accounting process applied to the estimation base of dividend to employee and remuneration to directors and supervisors, outstanding shares computing base for stock dividend distribution, and the spread between amount distributed and estimated: The appropriation of bonus to employees and remuneration to directors and supervisors is based on the net income after loss appropriation, 10% legal surplus, and 10% dividend; 1% or more of the remaining balance as bonus to employees and 1% or less of the remaining balance as remuneration to directors and supervisors. The distribution of stock dividend is based on the closing price one day prior to the

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resolution reached in the shareholder meeting and the ex-right and ex-dividend effect. If the actual amount of distribution resolved in shareholder meeting differs from the estimated amount, it is deem as changes in accounting estimation and booked as gain or loss of the year upon distribution.

3. Dividend distribution of employees in 2013 resolved by the board of directors (1)Distribution amount of cash dividend and stock dividend to employees and remuneration to directors and supervisors proposed: Amount of Distribution (NTD) Cash dividend to employees 928,107,242 Stock dividend to employees 0 Remuneration to directors 185,621,448 and supervisors The spread amount between the expense accrued and estimated must be disclosed and with the causes and processes detailed: None (2) Proposed stock dividend amount to employees and the ratio of that amount to the total amount of net income and total dividend to employees (3) Earnings per share including the proposed stock dividend to employees and remuneration to directors and supervisors: Not applicable since the stock dividend to employees and remuneration to directors and supervisors is expensed in accounting books.

4. The distribution of dividend to employees and remuneration to directors and supervisors (including shares and amount distributed and stock price) in 2012; the spread between the accrued amount and estimated amount must be disclosed and with the causes and processes detailed: (1) Distribution of dividend to employees and remuneration to directors and supervisors in the year: Cash dividend to employees: NT$ 971,366,847 Remuneration to directors and supervisors: NT$ 194,273,368 (2) The spread between the accrued amount and estimated amount of dividend to employees and remuneration to directors and supervisors must be disclosed and with the causes and processes detailed: None

(9) Purchase of Treasury stock:

Repurchase term The 4th time The Board resolution date July 1, 2013 To safeguard the Company’s credit and the Purpose of repurchase shareholder’s equity Expected repurchase period July 2, 2013 ~ August 30, 2013 Repurchase price range NT$240 ~ NT$300 Types of stock and number of shares Common stock 10,000,000 shares repurchased Total stock value repurchased NT$ 2,525,987,023 Number of shares cancelled or Common stock 10,000,000 shares transferred

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Repurchase term The 4th time Cumulative shareholding in the 0 share Company Ratio of the number of shares repurchased to total outstanding 1.33 ʘ shares Note: The 10,000,000 shares repurchased were cancelled on November 21, 2013 with the capital change registration completed.

II. Arrangement of corporate bond:

(I) Arrangement of corporate bond: None

(II) Convertible Bonds: None

(III) Information of CB: None

(IV) Self registration of CB: None

(V) Bond with stock option: None

III. Preferred stock (with stock option): None

IV. Issuance of global depository receipts: GDR

Date of issuance (process) Item May 30, 1997

Date of issuance (process) May 30, 1997

London / Luxembourg Location of issuance and trade Note 1: Location for issuance and trade changed from London to Luxemburg starting March 28, 2013.

Total amount US$235, 830,000 Unit Price US$11.23 / GDR Total issuance 21,000,000 GDRS One GDR stands for one common stock share of ASUS Note 2: The Company’s stock exchange ratio has changed from one GDR for one common stock share to one GDR to Source of common stock recognition five common stock shares since January 2, 2008. Note 3: ASUS had capital reduction arranged on June 24, 2010. The proportion of outstanding convertible is 1,000 shares for 150 shares.

Total marketable security shares recognized Stands for 21,000,000 common stock shares of ASUS Rights and obligations of GDR holders Please refer to Attachment A Trustee None GDR institute CITIBANK, NA

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Date of issuance (process) Item May 30, 1997

Depository institute Citibank Taiwan Limited

Outstanding GDR 5,519,428 GDRS (December 31, 2013) Issuance and expense amortization throughout the It is to be amortized in three years on average after issuance issuance period according to Article 243 of Company Law GDR agreement and depository agreement Please refer to Attachment B Max. US$ 62.500 2013 Min. US$ 33.750 Market price Average US$ 47.560 per unit (US$) Max. US$ 51.720 As of April 19, 2014 Min. US$ 44.425 Average US$ 47.930 Total marketable security GDR shares recognized Item Price / Per Date Amounts Price Issue Amount Shares share Date and remainder of initial 86/05/30 21,000,000 USD11.23 235,830,000 21,000,000 0 issuance A 87/06/15 25,478,476 0 0 25,478,476 0

87/10/26 56,628 0 0 56,628 0

88/06/14 18,893,413 0 0 18,893,413 0

88/08/30 69,309 0 0 69,309 0

89/08/11 23,830,652 0 0 23,830,652 0

90/08/30 20,663,365 0 0 20,663,365 0 Date and Remainder 92/08/01 6,256,511 0 0 6,256,511 0 of 93/08/15 10,924,803 0 0 10,924,803 0 Additional Issuance 94/08/29 10,654,365 0 0 10,654,365 0 After the Initial 95/09/21 13,439,142 0 0 13,439,142 0 Issuance B 96/09/20 6,310,972 0 0 6,310,972 0

97/01/02 -126,062,109 0 0 0 0

97/09/30 3,142,032 0 0 15,710,161 0

98/09/23 64,927 0 0 324,639 0

99/06/24 -29,514,114 0 0 -147,570,571 0

100/09/01 1,111,472 0 0 5,557,362 0

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Total Number of Remainder 6,319,844 31,599,227 for Issuance D

Attachment A

1. Voting rights: May not exercise voting rights directly but instructing the GDR institute to exercise voting rights according to the GDR agreement. 2. Dividend distribution, stock option, and other rights: (1) Entitled to distribution of dividend and stock shares just like the common shareholders of ASUS. GDR institute may have GDR issued proportionally to shareholdings or increase the common stock shares recognized with each GDR or have stock dividend sold on behalf of GDR holders and with the income distributed to GDR holders proportionally. (2) GDR institute may have the said rights provided to GDR holders within the scope defined by the law of R.O.C. or international law, or, GDR institute may have the said rights sold on behalf of GDR holder and with the income distributed to GDR holders proportionally.

Attachment B

1. GDR agreement: (1) Transfer/split: The ownership of GDR is evidenced by EUROCLEAR and CEDEL book transaction and split system. (2) Dividend and others: c Cash dividend in US$ net of GDR institute fees and tax withholding is distributed to GDR holders proportionally to their holdings. d For the distribution of stock dividend, GDR holders are to have the total GDR adjusted proportionally to the shareholding ratio recognized with GDR holdings; also, adjusted the GDR of GDR holders accordingly. GDR institute may have the income distributed to GDR holders proportionally. e While having new stock shares issued for cash capitalization or arranging stock option, GDR institute may (I) arrange stock subscription or (II) entrust the said right to GDR holders; however, the new stock shares for cash capitalization are limited to the exemption registered with SFC. f GDR institute must strive to have cash dividend and stock dividend distributed to GDR holders. (3) Voting rights: Unless otherwise agreed upon, GDR institute must base on the GDR agreement, law of R.O.C., and the instruction of GDR holders to exercise the voting rights of the marketable security recognized with GDR. 2. Depository agreement: (1) Submit marketable security for the issuance of GDR. (2) Inform GDR institute to have GDR issued. (3) Deliver marketable security for the exchange of GDR (4) Confirm the volume of GDR monthly (5) Confirm the volume of GDR on the registration date

V. Employee stock option certificates: None

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VI. Limit on Employee New Bonus Share: None

VII. Merger and acquisitions or stock shares transferred with new stock shares issued: (1) The merger completed, stock shares transferred, and new stock shares issued in recent years and up to the date of the annual report printed: 1. The opinions of the security underwriter who is responsible for merger, accepting other company’s stock share, and issuing new stock shares in the most recent quarter: None 2. If the business performance of the last quarter does not meet the expectation, please state the impact on shareholder’s equity and the corrective action proposed: None (2) If the merger is completed, stock shares is transferred, and new stock shares are issued in recent years and up to the date of the annual report printed, the information of the merger and the merged or acquired company must be disclosed: None

VIII. Fund implementation plan Up to the last quarter before the printing of the financial statements, outstanding equity issuance or marketable security subscription or the completed equity issuance or subscribed marketable security without success: Not Applicable

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V. Overview of Business Operation

I. Principal activities (I) Operating Scope

The company’s 3C integrated products are awarded with many honors for their excellent quality and advanced technology this year. ASUS received 4,256 awards worldwide from media and professional rating institutes in 2013. ASUSTeK had generated sales revenue of NTD421.4 billion in 2013. In terms of sales generated from branded products, ASUS sold 20.7 million motherboards, 18.8 million notebooks and 12.1 million tablets.

1. Product lines of the company;! a. Desktop / server b. 3D AutoCAD c. Advanced sound blaster d. NB e. Eee Pad f. Smartphone g. LED display h. Broadband & communication products i. Advanced server j. Portable Projector

2. Product development projects: a. Digital control wireless transmission technology dual core CPU MB b. Advanced 3D image display and wireless TV transmission graphic card c. Multi-function, three-in-one smartphone & Padfone (Note) & FonePad d. Ultra Mobile PC e. High-speed router / exchanger / firewall / VPN f. New-generation advanced server g. Professional LED display h. All-In-One PC, Transformer AIO i. Transformer Pad j. Touch Windows Notebook & Tablet k. Wearable electronic products

(II) Industry Overview 1. Progress and development of the industry: The market demand for thin, light-weight notebooks will continue to grow. The growth in high-quality multimedia entertainment, the increasing demands of game players, and the demand for 3D-multimedia and high-performance video and audio will drive demand for high-performance notebooks. The development of notebook incorporates not only the quality of “light-weight, thin, small, and visual appearance” but also “personalization, video and audio entertainment, wireless communication, and commitment to a green environment.”

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2. Correlation of the upper-stream, mid-stream, and down-stream of the industry: In terms of the correlation of upper-stream, mid-stream, and down-stream of the industry, upper-stream industry includes semiconductor (IC design, wafer foundry, and testing and packaging), electronic parts (passive components, rectifier diode, etc.), and others (LED, printed circuit board, connector, etc.). Mid-stream industry includes optoelectronic (monitor, LCD, etc.), electronic parts (motherboard, VGA, etc.), and computer peripherals (computer case, mouse, keyboard, etc.). Down-stream industry includes table-top computers and notebook computers. !

! ! 3. Product development trends: Cloud Computing provides data access and/or application service by terminal installation and through Internet connection to remote server or device. Cloud Computing is the next innovative technology for the world after Web 2.0/3.0. With the arrival of the Cloud Computing era, ASUSTeK plans to introduce a series of Cloud Computing related services and products having the qualities of portability, easy-to-use, connectivity, and service-in-depth reinforced in order to provide the most comprehensive products and solutions: notebook, nettop, e-books, Tablet PC, super personal computer, home server, storage equipment, and communication products that allow users to fully enjoy the convenience provided by Cloud Computing and information flowing freely through the diversified equipment. ! !

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4. Competition: The continuing volume growth of notebook is expected; however, the low-price factor remains in effect due to severe market competition. Therefore, our product design is focusing on personalization to stimulate demands for unique products. ASUSTeK focuses on product differentiation and segmentation to satisfy the demand of each consumer. The importance of this marketing strategy is greater than ever in order to create profit niche for each enterprise. At the same time, the development of notebook is moving towards upgrading product value by integrating it with new technology; marketing products, for example, that are light-weight, thin, portable, energy and power saving, and promoting green environment to help ASUSTeK outperform competitors in the minds of consumers. In addition to the qualities of light-weight, thinness, and durability, ASUS notebook is designed with unique power management technology to increase use time and power efficiency; it features LED, and incorporates natural material such as bamboo in response to the call for environmental protection.

MB, VGA, and CD-ROM are key segments of the computer elements industry that form a supply chain with CPU, module, PCB, and Connector. ASUS has kept a profound and excellent relationship with the aforementioned businesses. ASUS has established subsidiaries to manufacture these components to refine product development technology and secure a stable supply of components. As a result, ASUS has established comprehensive vertical integration. In terms of our global distribution structure, ASUS has worked closely with over 300 agents and over twenty thousand distributors worldwide. ASUS is the world number one brand in Europe, Asia, and America; in other words, ASUS is a dominant brand name in market.

(III) Research and Development ASUS has committed to R&D excellence since the day of incorporation to control self-developed technology for the R&D, production, and marketing of advanced MB, Graphics Cards, Notebook, Eee PC, Server, mobile phone!and to develop 4C (computer, communication, consumer electronics, and automobile electronics) integrated products. ASUS setup ATEC in 2003 and today has three R&D divisions setup, including broadband wireless communication, wireline / wireless exchanger, and VCD / DVD key technology. For ASUS, the R&D Division and the R&D Center work together reciprocally. R&D Center focuses on technology study and commercialization of creativity. R&D Center is entrusted with the responsibility to conduct preliminary study and assessment on the key software and hardware technology, module, and applied program development platform in depth. This work provides reference for the R&D director in judging technology movement and selecting partners. R&D Division focuses on system integration, product introduction and commercialization. Technology is transformed to generate income, and then part of that income is contributed back to support the creativity or technology supplier. The ASUS R&D Center will be operated permanently under such a positive cycle. These commitments to R&D, and the incentives provided by the company’s management, allow ASUS to continuously recruit R&D talents for technology. In the constantly changing computer world, the company has key technologies and leading products to compete in market and to create product value. The calculation of individual company yields R&D expense of 7.25 billion for 2013; the calculation of group yields a total commitment of R&D expense in the amount of 10.97 billion for 2013.

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ASUS is known for fast product R&D and Time to Volume. ASUS leads the industry to develop advanced products quickly and successfully, as demonstrated by the following new products:

1. R&D Products introduced in 2013: a. Digital control wireless transmission technology dual core CPU MB b. Advanced 3D image display and wireless TV transmission graphic card c. Multi-function, three-in-one smartphone & Padfone (Note) & FonePad d. Ultra Mobile PC e. High-speed router / exchanger / firewall / VPN f. New-generation advanced server g. Professional LED display h. All-In-One PC, Transformer AIO i. Transformer Pad j. Touch Windows Notebook & Tablet

2. R&D planned in 2014: a. Digital control wireless transmission technology dual core CPU MB b. Advanced 3D image display and wireless TV transmission graphic card c. Multi-function, three-in-one smartphone & Padfone (Note) & FonePad d. Ultra Mobile PC e. High-speed router / exchanger / firewall / VPN f. New-generation advanced server g. Professional LED display h. All-In-One PC, Transformer AIO i. Transformer Pad j. Touch Windows Notebook & Tablet k. Wearable electronics products

(IV) Short-term and long-term development plan: 1. Short-term development plan; ASUS will continue to exercise the brand spirit of “In Search of Incredible” to develop products with the quality of green technology, multimedia video and audio entertainment, and Cloud Computing. The product development cover two platforms blending advanced digital technology with the user’s life experience: Open-platform products include motherboard, drawing card, play station, LCD, and network server; system products include notebook and other handheld products.

2. Long-term development plan: We have entered a people-oriented mobile computing model, whereas all physical and virtual computation, data access and interaction are integrated through the internet. In the future, users will not have to adapt to product functions but the product functions will arbitrarily be converted to confirm to user demand. The boundary between mobile, tablet PC, notebook and other mobile devices will eventually be eliminated. In the new digital era of the future, the power of internet

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will eventually turn the screens of mobile devices into media centers connecting to cloud computing. The value of information will not be owned exclusively but readily available to all; transmission and sharing are the key. As the leader of brand technology, Asus believes in the power of open platform. We must embrace the ubiquitous era of cloud computing with open mind, building a versatile solution for the new generation of cloud computing.

II. Market analysis and the conditions of sales and production: (1) Market analysis: 1. Sales regions: Unit: NT$ thousands Year 2012 2013 Item Subtotal Total Subtotal Total Domestic sales 18,090,447 17,699,679

Internal sales 357,028,426 341,041,420 America / Canada 502,640 118,107 Asia Pacific 356,481,607 340,324,053 Europe 44,179 599,260 Africa - - Net sales 375,118,873 358,741,099

2. Market share and market demand and supply and market growth: (1) Market demand and supply of computer components: ASUS Motherboards have taken the largest global market share for several years in a row, mainly because of our superior R&D design capacity, massive production scale, complete upstream/downstream component supply chain, product quality, and production costs; all of which become our powerful competitive advantage.

Energy saving is the fundamental goal of ASUS throughout the process of production. ASUS is the first company to develop EPU with a power source adjusted smartly and instantly by detecting PC loading in order to supply energy effectively to the entire system. By providing elements with automatic phase switching (including CPU, VGA Card, memory, chips, hard drive, and fans), EPU is able to provide adequate power supply by smart acceleration and overclocking in order to save power and cost.

ASUSTeK sold 20.7 million motherboards in 2013. If the motherboard is the soul of a computer, VGA drawing card and CD ROM are the body and extremes of a computer. ASUS launches optimized products with high-quality, high-performance, and high CP value for motherboards for entry, medium and high-end markets. To attain the absolute leading advantages in global motherboard market, the sustainability of best brand and leading position in the industry is highly important.

(2) Market demand and supply of NB: The availability of laptop computers has grown substantially in the world. ASUS has worked in the industry of laptop computers for the past 15 years and the company demonstrates a remarkable sustained performance in product quality, R&D technology, and business development. According to research conducted by an international market survey institute, ASUS stands in the worldȷs top four laptop

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computer suppliers and constantly leads the industry in terms of product innovation, attaining high brand value and consumer recognition. The 2013 research institute estimated that ASUS will ship approximately 18,800,000 laptop computers to take over 10~11% of the global market share.

(3) Short-term development of IT industry; With the arrival of Cloud Computing era, ASUS plans to introduce a series of Cloud Computing-related services and products with a specific solution designed for the cloud computing of mobile computation, multimedia entertainment, and eCommerce. This solution will embrace the quality of portability, ease of use, connection, and service-in-depth, all reinforced to provide users with boundary-free and timeless lifestyle enhancement of information at your fingertip. Professionals may apply cloud computing business tools freely to explore business opportunities and upgrade competitiveness, while also sharing rich and diversified multimedia entertainment with family members.

3. Business goals The company’s strategic planning has matched up to market development trend in recent years. ASUSTeK generated sales revenue of NTD421.4 billion in 2013. In addition to care for the core businesses, ASUSTeK will strategically initiate diversified business operations. Sales of new products have grown by several-fold. ASUSTeK will continue to serve customers with world-class technology innovation, and excellent product quality as well as a practical and stable business operation.

4. Competitiveness, advantages and disadvantages of development, and responsive strategies

Industrial development and vision: (1) Advantages a. For the rise of mobile computing, lightweight and thin become the way to go for notebook computers. ASUS computer development has been focusing on effectiveness and energy saving since 2008, with a low power-consumption and Super Hybrid Engine (SHE) technology developed as the best solution to the request for lightweight, thin, and powerful. ASUS has mature technology ready for the market once the demand emerges. b. The development of laptop computer and motherboards in 2013 is expected to remain stable, whereas the development of Tablet PC continues to grow rapidly. This is projected to bring about more important impacts on personal mobile computing devices. ASUS has invested a substantial number of resources on the development of Tablet PC, leading the industry to launch new products in order to dominate the market and market share. ASUS has already become one of the top three leaders in the market for Tablet PCs utilizing the Android operating system. Under the mutual support and integration of products, ASUS has attained a niche competitive advantage in the evolution of hardware industries.

(2) Disadvantages and responsive strategies Global warming and its impacts are getting worse. The awareness of environmental protection is awakening; therefore, power saving is the concept shared by the world. Governments announce strict environmental protection provisions on electronic products which drive the power saving effort for the industry; therefore, enterprises must be able to respond to these global environmental protection polices for smooth

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business development. ASUSTeK, a global citizen, has been researching and developing lead-free and cadmium-free green motherboards since the year 2002; moreover, the concept of environmental protection has been introduced into other product lines, including the first power-saving motherboard with “smart EPU” introduced in 2007 to save CO2 emission throughout the power-on process. ASUSTeK has become the benchmark of green industry and has substantiated the responsibility of a business citizen. While the surge of green production is adopted worldwide, for solving the problem of global warming and environmental issues, green technology is the driving force of economy. Products in conformity with EuP directive are “green products with environmental protection design” and can be circulated freely in the European Community, a clear demonstration of ASUSTeK’s green competition advantage.

ASUSTek was awarded the “Enterprises Ongoing Business Development First Prize” in Taiwan in 2007; also, the company was the first technology enterprise in the world to receive the EuP directive certification. AUSUTeK notebook was the first product to receive Environmental Product Declaration (EPD), BSI Carbon Footprint, and EU Flower certification in 2010, continuing recognition of ASUSTeK’s endless efforts in power saving and environmental protection.

ASUSTeK expects have a more flexible and efficient organizational operation, with two business groups being formed including: System Business Group and Open Platform Business Group in order to aggregate recourses and be more responsive to market changes. Each business group will then be able to focus on improving procedure, form optimal strategy, and execute strategy completely. ! ASUS will continue to invest resources products that have economies of scale and competitive advantages as well as, to support the two business groups having the most competitive product lines and sales channels. ASUS is dedicated to providing consumers with better products and services, to upgrade the brand value in the minds of consumers and finally, to turn consumer’s brand recognition into market share.

Operating environment:

(1) Advantages a. ASUSTeK further demonstrates its R&D capability, introducing the first notebook and motherboard compatible with USB 3.0. This put ASUS ahead of its competitors in terms of advanced technology development creating business opportunity and maintaining the companyȷs leading position. b. The comprehensive notebook and motherboard-related components industry is breaking free from the technology restriction set by component manufacturers in Japan and Korea. ASUSTeK continues to cope with the rapid growth of motherboards and notebook computers in terms of meeting production demands. c. ASUSTeK dedicates itself to the tasks of environmental protection, power saving, and ongoing environmental concerns. Several innovative products were launched at CES and Cebit international exhibitions this year based on our core green technology. These were well received by media from all over the world. ASUSTeK has innovative green energy applied to the R&D and production of notebook computer, AIO PC, Tablet, LED backlight screen, and motherboard that

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has given us leverage in business opportunities and marketing driven by the surge of green environmental protection. (2) Disadvantages: The significant fluctuation of exchange rates in both directions has affected exporting business negatively. (3) Responsive strategies: We monitor exchange rate closely and adjust the position of foreign exchange to the optimal level.

Internal conditions

(1) Advantages a. Stable financing with sufficient funds b. Robust inventory control and healthy turnover rate c. The R&D technologies and talents of ASUS are world class; ASUS technology dominants the industry. d. The strategic planning of ASUS is vigorous and reinforces corporate vision; also, market trend reflects our industrial development. e. Talents of our employees are assets of ASUS. ASUS has improved employee’s welfare and salary and welfare facilities constantly to keep employee’s morale high and employee’s performance outstanding.

(2) Disadvantages: As ASUS grows significantly in both business operation and organizational structure, it is crucial to expand and improve the effectiveness of our management.

Product and technological development:

(1) Advantages: a. ASUS has created a strong R&D team for the development of MB, Graphics Cards, CD-ROM, NB, server, desktop computer, Intelligent Navigation phone, wireless broadband mobile device, and Eee series. The excellent R&D talents of ASUS are recognized in the industry, with many patents awarded and many new products constantly in development. b. Many of the department heads and management of ASUS have technological background. They thoroughly understand industrial trends and product development technology enabling them to take full advantage of development to plan product lines in depth, to apply recourses effectively, and to generate added value. c. ASUS has contributed significant R&D and marketing resources to promote the important new products as Tablet and EPAD in order to market products with the merits of good price, cosmetic design, industrial design, light weight, and easy interface.

(2) Disadvantages: The sales channel of mobile device is different from the one for information products; therefore, it is necessary to further develop the sales channel for mobile devices.

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Sales and marketability:

(1) Advantages a. Under a sophisticated sales management plan, ASUS has products distributed to all areas evenly; therefore, negative economic development in any one area will not cause critical loss to ASUS. This balanced market development provides ASUS with the best risk management. b. Chinese and Russian markets show significant growth in recent years; therefore, ASUS has progressively deployed in these markets, and expects to perform well this year with the emerging business opportunities in these areas. c. The French, Italian, German, and Russian markets represent the developed regions in Europe. Since 2002, ASUS motherboards still come out on top there, ranked highest in the first place in global market share. In terms of notebook computer, ASUSTeK is ranked first in Taiwan, third in Europe, second in China, first in Eastern Europe, and number three in Western Europe; also, is ranked in the top four worldwide. In terms of global network service, fifty-five official websites are constructed in thirty-one languages for substantiating localized operating strategy and developing local market.

(2) Disadvantages: The availability of resources and the control of cost are crucial to the business performance of the subsidiaries overseas; therefore, the head office must be able to control these key elements effectively.

(2) Application and production process of major products: 1. Application of major products: a. MB, VGA, and CD-ROM are important elements to desktop computer and servers. ASUS is in a leading position with all the aforementioned products worldwide. b. NB and PDA have potential to grow in commercial market (governmental offices and business) and home market (personal consumption and use). NB and PDA of ASUS have a bright future along with the prevailing concept of mobile office. c. For the development of information products, wireless broadband mobile device should be linked to personal lifestyle; therefore, the most important communication interface is wireless broadband communication technology. For the development of the professional and star product, it is necessary to control the key technologies for developing marketable products; ASUS is moving aggressively in this direction. 2. Production Process of Major Products a. MB and VGA: Automatic SMT ĺPick and placeĺsoldering potĺburningĺtest. b. NB and other products: Automatic SMTĺpick and placeĺsoldering pot ĺburningĺPCB testĺassemblyingĺsystem testǶ

(III) Supply of major raw materials: Major raw materials Suppliers Chips AMD, Intel, Nvidia, Qualcomm Logic IC Newland, RT, RICHTEK PCB HSB, WUS, Nova Connectors HON HAI, LOTES, Tyco MEMORY ELPIDA, HYNIX, SAMSUNG, MICRON, Nanya LCD LGD, AUO, INX

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Most of the aforementioned manufacturers have been doing business with ASUS for years. (IV) Major Customers with over 10% net sales and Suppliers with over 10% total purchases of the last two fiscal years 1. Major Suppliers of the last two fiscal years Unit: NT$ thousands 2011 2012 2014Q1 (Note 1) Percentage of Relation Percentage of Relation Percentage of Relatio Item Name Amount net annual with Name Amount net annual with Name Amount net purchase n with purchase (%) issuer purchase (%) issuer of Q1 (%) issuer Invested company Available valued -for-Sale 1 PEGA PEGA 131,662,808 24 with 85,227,822 18 Financial equity Assets method 2 T customer 92,514,581 17 None T customer 92,945,629 20 None 3 F customer 75,626,026 14 None F customer 68,088,647 14 None 4 Others 246,770,368 45 Others 228,611,238 48 Others Net Net Net purchase 546,573,783 100 purchase 474,873,336 100 purchase 100 amount amount amount Note 1: The 2013Q1 financial statements audited by the CPA were not yet available up to the print of annual report on April 19, 2014. Note 2: The purchase amount from the last two years included raw material amount purchased for clients. Note 3: Causes of increase and decrease – for business operation

2. Major Customers of the last two fiscal years Unit: NT$ thousands 2014Q1 2012 2013 (Note 1) Percentage Percentage Relati Percentage of annual Relation with of annual Relation on Item Name Amount Name Amount Name Amount of net sales net sales issuer net sales with issuer with of Q1 (%) (%) (%) issuer Invested Invested company company 1 ASTP 353,448,218 94 ASTP 233,229,291 65 valued with valued with equity equity method method Invested company 2 Others 21,670,655 6 ASGL 105,733,214 29 valued with Others equity method Others 19,778,594 6 Others Net Net sales Net sales 375,118,873 100 358,741,099 100 sales amount amount amount Note 1: The 2014Q1 financial statements audited by the CPA were not yet available up to the print of annual report on April 19, 2014. Note 2: Causes of increase and decrease – for business operation

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(V) Production/Sales Quantities and Value over the Past Two Year: Not Applicable

(VI) Sales quantities and value of the last two fiscal years: Unit: Piece (unit); NT$ thousands

year 2012 2013

Domestic Sales Export Sales Domestic Sales Export Sales Major product QTY Amount QTY Amount QTY Amount QTY Amount IT products 2,842,947 16,570,146 66,206,533 351,499,764 2,898,316 15,846,783 66,517,876 336,863,877 Others - 1,520,301 - 5,528,662 - 1,852,896 - 4,177,543 Total - 18,090,447 - 357,028,426 - 17,699,679 - 341,041,420

III. Employees Status of employees over the past two years and up to the date of the report printed April 19, 2014 As of Year 2012 2013 April 19, 2014 Direct Labor 0 0 0 Employee Indirect labor 4,682 5,226 5,300 Total 4,682 5,226 5,300 Average age 32.04 32.49 32.68 Average years of service 4.2 4.5 4.6 Ph. D. 0.8% 0.97% 0.98% Masters 53.37% 56.21% 56.11% Education College /University 42.29% 39.51% 38.75% Ȑ%ȑ Senior High School 3.35% 3.13% 3.58% Junior High School and below 0.19% 0.15% 0.17%

IV. Expenditure on environmental protection (I) Material capital expenditure invested in environmental protection activity: 1. ASUS is certified with ISO14001; also, bases on the spirit of reserving natural resources moving towards the direction of preventing and improving pollution. 2. ASUS is certified with OHSAS18001; also, has safety and health risk in control and goes for the ongoing concern of the company with zero disaster. 3. The external CD-ROM drive of the company followed the carbon footprinting PAS 2050 announced by British Standards Institution to complete the Life-Cycle Greenhouse-Gas Emissions Inventory and was awarded with the certificate for Pas 2050 carbon footprinting implementation from DNV. 4. The product U53SD notebook followed the carbon neutrality standards PAS2060 announced by British Standards Institution and reached product neutrality state for the residual carbon emission after carbon reduction in the offsetting of products through carbon credit trading. The company was awarded with the Implementation of Neutrality Certificate in compliance with PAS 2060 from DNV. 5. ASUS fellows will join environmental protection organizations and get involved in environmental protection activities.

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6. ASUS has promoted green product and recycling mechanism in compliance with the environmental requirement of RoHS and WEEE. 7. ASUS has joined Taipei Environmental Protection Volunteers Squad to help clean up the beach and perform environmental protection community service in Beitou are. ASUS has striven to fulfill social responsibility and protect our environment as a green corporate should do. 8. Arrange environmental protection, recycling, and merciful donation activities from time to time; also, contribute the income generated to charities activities.

(II) The total amount of loss and fine paid for environmental pollution in 2013 and up to the date of the report printed: None

(III) Estimated environmental protection expenses: 1. ASUSTeK will continue to conduct ISO14064 Greenhouse Gas Emission Validation and product carbon footprint validation process. 2. ASUS will introduce energy management system forcefully to save energy and reduce green house gas emission. 3. ASUS will continue to invest in green design, green procurement, green production, and green marketing for fulfilling corporate social responsibility to the earth.

(IV) The responsive actions of ASUS to environmental regulations:! ASUS cares about environmental protection, perpetual application of resources, and ecosystem issues; also, bases on the company’s environmental and occupational safety and health policy to establish environmental protection and health management system in order to substantiate ASUS’s on going concern with continuing improvement. ASUS does not take the importance of “green design, green procurement, green production, and green marketing” lightly and ASUS has initiated many tasks that are new in Taiwan and leads to and activates the industry for ongoing concern. In addition to promoting GreenASUS internally, the SERASUS is promoted to work with suppliers promoting green supply chain, reinforcing green design, developing green products, encouraging green products recycling mechanism and power-saving products design in compliance with the global environmental protection equipment of WEEE, RoHS, and ErP; also, ASUS has received international environmental protection citation and awards as a leading green high-tech enterprise should be.!

1. ASUS has complied with global environmental regulations: ASUS has GreenASUS setup to monitor and to respond to global environmental protection regulations including RoHs, WEEE, ErP, REACH, product energy efficiency and applicable laws and regulations and packing material application and waste management in order to comply with the requirements for products shipped to the world directly and indirectly. ASUS has RoHS test equipment available to have the components, work-in-process goods, and by-product tested; also, to ensure the finished goods shipped complying with international environmental protection standard.

2. The certification of environmental protection system: In fulfilling the quality assurance of environmental protection system, ASUS’s Quality Management System is stipulated in accordance with ISO and HSPM of IECQ QC 080000. ASUS has received the certification of IECQ QC080000 and IECQ hazard substances procedure management system.

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3. International environmental protection citation and award: Asus constantly implements the following solutions for environmental protection: (1) Asus takes into consideration at product design for the reduction in choosing environmentally hazardous raw materials, green product design, reducing product energy consumption, extension of product service life, waste product management, and product packaging and management, thereby to acquire various green marks such as the EPEAT Green Mark, EU Flower green mark, Czech Ecolabelling, the certification of TCO, Energy Star, Taiwan Green Mark, J-Moss Green mark, and China Energy Label. (2) Asus introduced the halogen free policy since 2008 by launching multiple halogen-free demonstration products such as laptop computer (NB), PDAs, monitors, EeePC, and VGA in addition to continuous parts inventory and moving towards the objective of halogen free for all product lines. Asus developed the first Halogen Free Full-HD (1920x1080) LED Monitor (VW247H-HF) and the world's first Halogen-free Motherboard (P7P55D-E/HF). In the future, the company will progress towards a comprehensive range of non-halogenated products. (3) The company implements product life cycle inventory (LCI) and analysis of environmental impacts assessment to further complete Type III environmental declaration and carbon footprint verification. (4) The Asus Corporate Social Responsibility website (http://csr.asus.com/) was founded disclose information related to Asus in the environmental and social responsibilities as well as the interactive platform for stakeholders concerning environmental information of ASUS. (5) To ensure suppliers and outsourcers in compliance with Asus standards, Asus implements the Quality Business Review (QBR) each year on the key focus and new suppliers, including the written review and annual audit. Suppliers and outsourcers passing the QBR will be further audited through international standards such as QC080000 and ISO 9001, Asus technology stands, and three aspects of management audit, including QSA (Quality System Audit), QPA (Quality Process Audit), and GA (Asus HSF recognized green parts, Hazardous Substance Free), to implement the concept of pursuing perfect quality to Asus's green supply chain management.

The company has achieved green marks and relevant certifications below: (1) ASUS was awarded with HSPM certificate (Hazardous Substance Process Management) from IECQ in 2012 to become the world’s first computer company that has been awarded with such special prestige. Again, ASUS’s commitment in environmental protection and green mobility are highly recognized. (2) After achieving the first Taiwan laptop computer to comply with EPEAT Gold and the world's first laptop computer in compliance with EU Flower in 2008, Asus continues to positively launch green products and exhibits its outstanding concepts of green design. In 2011, Asus comprehensively extend from EPAET green marks to EeePC, EeeBox and monitors series while concurrently expands to other regional certifications worldwide. Asus also offer multiple laptop computers and desktop computers with achievement of EU flower. Moreover, Asus also achieved Eco Mark from Japan and Eco-Label from South Korea as well as other green marks from Asian countries. In 2010, Asusȷs US laptop achieved Japanȷs Eco Mark among the top 10 IT companies.

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(3) Asus follows the carbon footprint standards PAS 2050: 2008 announced by the British Standards Institution (BSI) to complete the Life-Cycle Greenhouse-Gas Emissions Inventory and was granted the first certificate of carbon footprint implementation for notebook from DVN, an international certification body. A further analysis of the carbon inventory shows the result of Asus adopting ecological design with concept of green innovation to paunch notebook U53SD, Bamboo Notebook. Other than using natural bamboo to replace traditional plastic materials, U53SD is equipped with exclusive Super Hybrid Engine (SHE) energy-saving technology to improve product carbon footprinting with material replacement and increase in energy efficiency. The company followed the carbon neutrality standards PAS2060: 2012 announced by British Standards Institution in 2011 and reached product neutrality state for the residual carbon emission after carbon reduction in the offsetting of products through carbon credit trading. The company was awarded with the Implementation of Neutrality Certificate in compliance with PAS 2060 from DNV. (4) ASUSȷs development in effective reduction of power consumption, extreme power saving technology that enhances endurance, and the master technology relied by display products with easy recycle and power saving have urged ASUS to constantly improve product efficiency, thereby receiving the Excellence in Efficient Product Design from the 2011 Energy Star organized by the EPA of the United States. (5) ASUS won the Green ICT Award from the Best Choice Award in 2012 Taipei Computex. (6) Asus halogen free monitor, VW247H-HF and Bamboo notebook series, U43SD, have concurrently been awarded Green ICT Award from the 2011 Best Choice of COMPUTEX TAIPEI award. (7) In 2010, International Green Peace held the Electronics Survey to assess the use of chemical substance, energy efficiency, prolonged product service life, and other projects of the products. The companyȷs first halogen-free monitor, VW247H-HF, scored 7.5 out of 10 in total score, leading other brands and was awarded with the first place in monitor product assessment. In addition, notebook UL30A was also awarded with the first place in notebook product assessment. Asus became the only company worldwide to have achieved champions for two products. (8) In 2010, Asus was invited to participate in the assessment for Electronics Take Back Coalition recycling assessment and was awarded with outstanding performance in the category of computer. Please visit ASUS’s website for more products awarded with environmental protection citations: http://csr.asus.com/chinese/index.aspx#74!

V. Employee/employer relations The realization of business goals relies on the commitment, deduction, and effort of employees; however, employees cannot exercise their talents without the support of the employer; therefore, a harmonious employer-employee relation is what ASUS after. ASUS has treated employees with an honest and open attitude; also, has working regulations and rules defined in the company’s Work Code for the reference of employees. In terms of salary, benefit, and training policy, it is designed to help employees realize their objectives; therefore, they are able to have themselves heard and to have their working safety secured; also, their work satisfaction and profound economic interest fulfilled without the need of organizing an union. Employer and employees are unified and share the same concept to

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work for the future of the organization.

(I) Employee’s welfare package ASUS has made the “respecting humanity and caring for employees” one of the operating concepts. For the purpose of taking care of employees sufficiently and protecting their living security in order to work for the company worry-free, ASUS provides basic protection to employees; also, provides or sponsors welfare projects specially. Employee’s Welfare Committee is formed by the employees to plan and enforce welfare activities as follows: 1. ASUS has the following benefits provided in accordance with Company Law:! Health insurance, labor insurance, group insurance, pension reserve, accrual pension reserve according to old contribution plan deposited in Bank of Taiwan, arrearage reserve, and appropriating welfare fund with a percentage of sales revenue and paid-in capital.! 2. ASUS has the following benefits provided specially: Season-greeting bonus and performance bonus, annual physical health check up, E-Library, Employee Assistance Programs(EAP), Employee Sports and Recreational Center – Taoran Hall: offering lukewarm swimming pool/SPA, gym, pool room, and aerobics room as well as employee café, featuring multiple functional sites and welfare measures. 3. “Employee Welfare Committee” Birthday & Season-greeting bonus, wedding/funeral/celebration and emergency financial aid, group activities, scholarship and financial aid to employee’s children, Winter & Summer vocations’ children's winter & summer camp, employee benefits Vouchers, and using departmental-based “Teamwork” activities and cooperate with literary units for discount offers so that the peers can implement art and literature appreciation.

(II) Education and training ASUS has years of experience in cultivating talents in accordance with operating concepts of “cultivation, cherishment, caring for employees, and helping ASUS fellows reaching their potential;” moreover, ASUS has a profound operating model setup in education and training and with excellent internal tradition formed. The talents cultivation and development is illustrated as follows:

1. Personal learning & growth plan ASUS has promoted the “Learning & Growth Plan”, manager assist employees developing capability; also, to provide alternatives in conformity with organizational and personal development. Base on the concept of “individualization” to plan personal learning and growth plan by the management and the staff together in accordance with the core value of the company and the occupational ability needed for job performance. The idea is to have the learning process become more systematic and effective. There were 1,917 individuals participated in the learning and growth plan in 2013. Please refer to the learning and growth plan procedure below:

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Figure 1: Learning & Growth Plan Procedure 2. Diversified learning resources Talents are the key to the success of an enterprise. ASUS has never taken it light in the sense of talents training. The mission of ASUS is to help each worker learn and grow at work continuously; also, to exercise their potentials to the extreme. ASUS has a series of training courses and learning resources planned for the staffs taking as a whole. The training course includes orientation, newly promoted directors training, core value training, management functions training, and professional competence training. In addition to the internal training courses, external training courses, on-job training, and self-development training are also available.

Figure2: Diversify Learning & Development Resources

(1) Internal training courses - Management and core vocational training AUSUTeK plans comprehensive learning blueprint for each employee to help build up their occupational competence. Annual management training program including junior management training and management competency training in all level is to help the management upgrade managing ability systematically and exercise management effectiveness. Plan core value training courses to help staff generate ASUS DNA and upgrade staff’s work skills and performance. Individual received 6 hours of training in average in 2013 with the following courses: Cumulative Course Cumulative Course attendance Expense Type hours (NTD) (hr.) times Classroom 215 855.5 8,216 712,881 E-learning 59 156 4,142 605,990 Total 274 1,011.5 12,358 1,318,871

(2) Internal training courses - Professional training ASUS has new recruits trained with various professional and practical courses to help them adapt to working culture and accumulate professional skills in width and

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depth. Professional training courses arranged by each department in 2013 included 626 courses.

Figure 3: Internal Training Course (3) Self-development resources and seminars For the purpose of encouraging staffs for independent study, ASUS provides various learning resources for independent development, such as, free elective online courses, ASUS Library, industry database, E-Book, document sharing, and community discussion of diverse topics. Build up colleague’s active learning and personal capability and positive work attitude and sense of value. ASUS library, MP talking book, and VCD / DVD are 897 items in total in 2013. (4) On-job training Directors have on-job training arranged in accordance with the mission assigned and personal development added it with the participating in the projects, coaching, internship, job enlargement, and job enrichment to upgrade employee’s competence. Let employees learn from daily operation systematically and apply the learned skills to work. Directors have 980 on-job training programs planned and arranged in 2013, representing 10.86% of learning and growth plan. (5) External training In addition to the internal training courses planned in accordance with the demands of the staff taking as a whole, employees are assigned to be trained externally in response to the demand of each individual in order to upgrade the professional ability needed for performing the task. ASUS grants employees financial support for the external training courses related to their job performance. ASUS had 260 external training courses arranged in 2013 with NT$1,286,980 granted as follows: Expense Item Course (NTD)! Professional 163 813,552 Management 55 150,585 Language 3 51,811 Others 39 271,032 Total 260 1,286,980

(III) Code of employee’s conducts and ethics The “sincerity, thrift, profundity, and practicality” is one of the company’s operating concepts. For the common understanding of ASUS fellows, the company has the Chinese traditions “modesty, sincerity, theft, swiftness, courage” made to be the code of employee’s conduct socially and personally. The importance of industry’s moral and social responsibility cannot be stressed enough internationally; therefore, industry with the continuous trust and respect of consumers, business partners, and the public will be able to operate permanently. For regulating

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employee’s conducts in compliance with the company’s moral code and helping the company’s related party understand the moral standard of the employees in performing job responsibilities, the “Codes of Ethics” is stipulated for reference. The mail box at [email protected] is for the complaints filing of employees. Human Resources Office and Legal Center also re-wrote the Code of Ethical Conduct for Employee into 9 case studies (Chinese and English Version) on the internal announcement of the website homepage in addition to mailing the information to all peers. Moreover, a digital teaching material for Code of Ethical Conduct for Employee was prepared for all employees to study. The announcement will be made by the beginning of 2012 and all employees will receive training. In addition, after the course launch, it will be listed in the compulsory digital curriculum which all new employees must complete within one month after the employees have reported to work, in order to assure true conveyance of that concept. The peers will undergo promotion and interpretation for “Code of Ethical Conduct for Employees” to intensify the codes of practices and professional competency” of the company and all peers, so that all peers will exhibit the respective morals and help ASUS become a reputable organization. ASUS has based on the “Electronic Industry Code of Conduct (EICC)” and “Listed Companies to set standards of ethical conduct” to stipulate the “Code of Ethics” as follows: Chapter 1 General rules Chapter 2 Regulatory compliance Chapter 3 Preventing conflict of interest Chapter 4 Gifts, business entertainment, and social standard Chapter 5 Avoid the personal gain chance Chapter 6 Information fully preserved and disclosure Chapter 7 Fair trade, advertisement, and competition Chapter 8 Safeguard the interest Chapter 9 Community watch Chapter 10 Punishment Chapter 11 Others

(IV) Working environment and worker’s safety protection: 1. Establishment of Labor Health & Safety Committee: The company set up labor safety and health management unit according to the laws and regulations, organizing labor safety and health specialist to take responsibilities in the environmental safety and health business for company employees and the environment, in addition to cooperating with laws and regulations to implement labor safety and health related business. 2. Arrange labor safety and health education and training and employee’s health check-up periodically In addition to having labor safety and health department organized, the company must have labor safety and health education and training arranged for the new recruits. Զ Special operation supervisors are assigned to the site of special operations in addition to comply with laws and regulations for examining the different environment. There will also be specialists who take special educational training and health examination to protect the safety and health of employees. 3. Establishment of medical units There are nurses at the ASUS Medical Units to care for the staff; also, physicians are there to provide outpatient and advisory service to the staff.

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4. ASUS setup EAP counseling and arranges health promotion activities including employee benefits health check, healthy stair climbing, weight-loss contest, fitness test, vision care, cancer screening, hepatoprotective activity, and human factors improvement plan in accordance with the operating concept of “incubation, treasure, and care for employees.” 5. ASUS has received “Healthy workplace health promotion self-certification mark” and Taipei City Government “Excellent Milk Pumping Room” certification for the physical and spiritual care of employees. 6. Firefighting educational training and real emergency contingency practice Routinely carry out patrol on firefighting equipment and comply with the regulations stated in Fire Services Act to develop fire protection plan, routinely hold firefighting class, educational training, and practice the reporting, distinguishing, evacuation and escape, and rescue of personnel using firefighting equipment, to implement disaster prevention plan and assure employee safety. 7. Routine implementation of operating environment test Comply with relevant domestic laws and regulations to develop the sampling plan of operating environment testing, test the operating environment semi-annually and develop objectives in safety and health improvement. (V) Retirement plan In response to the company’s having the business operation dividend into brand name business and OEM/ODM since 2008, the seniority of the workers with ROC nationality was settled and with the pension paid on the end of January 2008. Workers with ROC nationality who have been employed in 2008 are entitled to the Defined Contribution Pension Plan. White-collar workers without ROC nationality are entitled to the prior-existing pension plan. Blue-collar workers are contracted for three years without the concern of pension.

(VI) Other agreements The company’s loss from employee-employer dispute in recent years and up to the date of the report printed: None

VI. Major agreements: April 19, 2014 Contract Start/Expiration date of Affiliated Person Content Restrictions Property Contract The line of credit of NT $ 3 billion or its equivalent Credit Mega International Aug 17, 2013 ~ in other currencies, and Contracts Commercial Bank Aug 16, 2014! share the amount with ASTP.

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VI. Financial Information

I. Condensed balance sheet, income statement, and auditor’s opinions over the last five years (I) Condensed balance sheets (consolidated) – adopting IFRSs Unit: NT$ thousands Summarized financial information of Year As of April 19, fiscal year 2009~2013 (Note 2)! 2014 Item 2009 2010 2011 2012 2013 (Note 3)! Current Assets! 214,271,675 238,864,019 Property, plant and 10,764,132 10,746,683 equipment! Intangible Assets! 2,023,127 2,159,156 Other Assets! 40,974,443 44,302,897 Total Assets! 268,033,377 296,072,755 Before 134,303,079 151,095,249 Current allocation Liabilities After 148,605,524 (Note 1) allocation! Total non-current 5,942,643 8,006,022 liabilities Before 140,245,722 159,101,271 Total allocation Liabilities After 154,548,167 (ຏ 1) allocation! N/A (Note 3)! Equity attributable to shareholders of the parent! Share capital 7,527,603 7,427,603 Capital surplus 4,305,220 4,452,237 Before 111,704,586 116,472,478 Retained allocation earnings After 97,402,141 (Note 1) allocation! Other Equity! 2,460,065 6,847,184 Treasury shares - - Non-controlling interest! 1,790,181 1,771,982 Before 127,787,655 136,971,484 Total allocation Equity After 113,485,210 (Note 1) allocation! Note 1: General shareholders meeting has not yet been summoned up to April 19, 2014; therefore, the amount after adjustment is not disclosed. Note 2: The above financial information for each year was audited by CPA. Note 3: The 2014Q1 financial statements have not yet been audited by CPA up to the date of the report printed on April 19, 2014.

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Condensed statements of comprehensive income (consolidated) – adopting IFRSs

Unit: NT$ thousands !!!!!!!! Year Summarized financial information of fiscal year 2009~2013 (Note 1)! As of April 19, 2014 Item! 2009 2010 2011 2012 2013

Operating revenue! 448,684,621 463,286,507 Gross Profit! 61,117,687 59,970,065 Operating Income! 21,831,860 19,836,010 Non-operating Income and 5,231,353 7,190,092 Expenses! Profit before income tax! 27,063,213 27,026,102 Income (Losses) from Continuing Operations for 22,537,178 21,531,664 the year! Losses from Discontinued - - Operations! Profit for the year (Losses) 22,537,178 21,531,664 Other comprehensive income for the year(Net of (403,854) 4,382,949 (Note 2)! income tax)! N/A Total comprehensive 22,133,324 25,914,613 income for the year Profit attributable to 22,463,572 21,449,895 shareholders of the parent Profit attributable to 73,606 81,769 Non-controlling interests Total comprehensive income attributable to 22,061,034 25,826,521 shareholders of the parent! Total comprehensive income attributable to 72,290 88,092 Non-controlling interests! Earnings per share 29.84 28.66 (non-retroactive)! Note 1: The above financial information for each year was audited by CPA. Note 2: The 2014Q1 financial statements have not yet been audited by CPA up to the date of the report printed on April 19, 2014. Note 3: No capitalized interest expenses booked for each year.

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Condensed balance sheets (consolidated) – adopting ROC GAAP

Unit: NT$ thousands Summarized financial information of !!!!!!! Year fiscal year 2009~2013 (Note 1)! Item 2009 2010 2011 2012 2013

Current Assets! 278,290,995 153,450,175 177,644,110

Funds & investments 12,804,912 30,141,020 30,486,345

Fixed assets (Note 2) 64,716,905 9,277,818 10,509,523

Intangible Assets 4,319,475 367,069 2,369,754

Other Assets 9,874,815 1,870,106 2,373,255

Total Assets 370,007,102 195,106,188 223,382,987 Before 160,753,370 85,266,601 103,321,085 Current allocation Liabilities After 169,671,602 93,904,834 114,236,109 allocation Long-term Liabilities 9,486,372 1,456,500 834,498 Other Liabilities 2,116,396 2,024,807 3,052,718 Before 172,356,138 88,747,908 107,208,301 Total allocation Liabilities After 181,274,370 97,386,141 118,123,325 allocation

Capital Stock 42,467,775 6,270,166 7,527,603 N/A Additional paid-in 30,237,586 4,482,124 4,662,555 capital Before 96,525,371 94,960,135 99,100,280 Retained allocation earnings After 87,607,139 84,964,465 88,185,256 allocation Unrealized gain on 2,159,201 1,197,335 1,514,237 financial instruments Cumulative translation 1,490,885 (1,066,766) 715,457 adjustments Net loss not recognized as pension (3,202) 11 122 cost Unrealized revaluation - - 73,526 increment Unrealized gains on 306,361 200,655 1,354,470 cash flow hedges Minority Equity 24,466,987 314,620 1,226,436 Before 197,650,964 106,358,280 116,174,686 Total allocation Shareholder’s After Equity 188,732,732 97,720,047 105,259,662 allocation Note 1: The above financial information for each year was audited by CPA. Note 2: The 2010 land appraisal was conducted using the publicly assessed land value according to the laws and regulations. The land was assessed to increase in total value of 91,909, which was deducted with land value increment tax of 18,381 to yield a net value of 73,526. It is recognized as the unrealized re-assessment value under Shareholder’s Equity.

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Condensed income statements (consolidated) – adopting ROC GAAP

Unit: NT$ thousands !!!!!!!!!! Year Summarized financial information of fiscal year 2009~2013 (Note 1)! Item! 2009 2010 2011 2012 2013

Operating revenue! 610,120,403 429,721,249 384,112,294

Gross Profit! 62,015,053 51,862,488 52,354,786

Operating Income! 15,734,198 18,975,273 18,229,501 Non-operating Income 6,697,807 4,669,490 3,782,296 and gains! Non-operating Expenses 3,135,845 2,219,029 1,877,566 and Losses! Income from continuing operations before income 19,296,160 21,425,734 20,134,231 Tax! Income from continuing 16,255,535 18,039,603 16,847,398 operations! Income from N/A - - - discontinued operations! Extraordinary - - - Gain(Loss) Cumulative Effect of Changes In Accounting - - - Principles Consolidated net income! 16,255,535 18,039,603 16,847,398 Consolidated net income attributable to 12,479,066 16,488,357 16,578,159 shareholders of the parent Earnings per share 2.94 6.32 21.99 (non-retroactive)! Note 1: The above financial information for each year was audited by CPA. Note 2: No capitalized interest expenses booked for each year.! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

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(II) Condensed balance sheets (separate) – adopting IFRSs Unit: NT$ thousands! Summarized Balance sheets of !!!!!!!!!!!!!!!Year fiscal year 2009~2013 (Note 2)! As of April 19, 2014 Item! 2009 2010 2011 2012 2013

Current Assets! 130,453,670 130,087,168 Property, plant and 4,002,107 4,440,336 equipment! Intangible Assets! 110,730 313,928 Other Assets! 72,784,708 86,063,086 Total Assets! 207,351,215 220,904,518 Before 75,803,458 78,436,223 Current allocation Liabilities After 90,105,903 (Note 1) allocation! Total non-current liabilities! 5,550,283 7,268,793 Before 81,353,741 85,705,016 Total allocation ! Liabilities After N/A (Note 3) 95,656,186 (Note 1) allocation! Share capital 7,527,603 7,427,603 Capital surplus 4,305,220 4,452,237 Before 111,704,586 116,472,478 Retained allocation earnings After 97,402,141 (Note 1) allocation! Other Equity! 2,460,065 6,847,184 Treasury shares - - Before 125,997,474 135,199,502 Total Equity allocation After 111,695,029 (Note 1) allocation! Note 1: General shareholders meeting has not yet been summoned up to April 19, 2014; therefore, the amount after adjustment is not disclosed Note 2: The above financial information for each year was audited by CPA. Note 3: The 2014Q1 financial statements have not yet been audited by CPA up to the date of the report printed on April 19, 2014.

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Condensed statements of comprehensive income (separate) – adopting IFRSs

Unit: NT$ thousands!

!!!!!!!!!!!!!!Year Summarized financial information of fiscal year 2009~2013 (Note 1)! As of ! April 19, 2014! Item 2009 2010 2011 2012 2013

Operating revenue 375,118,873 358,741,099 Realized gross profit 24,482,294 23,195,769 Operating Income 14,765,207 9,775,216 Non-operating Income 11,899,543 15,786,546 and Expenses Profit before tax 26,664,750 25,561,762 Income (Losses) from Continuing Operations 22,463,572 21,449,895 for the year! N/A Losses from (Note 2)! - - Discontinued Operations! Profit for the year! 22,463,572 21,449,895 Other comprehensive income for the year (Net (402,538) 4,376,626 of income tax)! Total comprehensive 22,061,034 25,826,521 income for the year! Earnings per share 29.84 28.66 (non-retroactive) Note 1: The above financial information for each year was audited by CPA. Note 2: The 2014Q1 financial statements have not yet been audited by CPA up to the date of the report printed on April 19, 2014. Note 3: No capitalized interest expenses booked for each year.

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Condensed balance sheets (unconsolidated) – adopting ROC GAAP

Unit: NT$ thousands!

Year Summarized financial information of fiscal year 2009~2013 (Note)

Item 2009 2010 2011 2012 2013

Current Assets! 99,144,691 110,079,794 112,832,696

Funds & investments 121,788,684 52,970,757 65,560,476

Fixed assets 4,273,269 4,269,103 3,937,811

Intangible Assets 174,074 89,987 123,425

Other Assets 3,548,961 320,959 283,504

Total Assets 228,929,679 167,730,600 182,737,912 Before 52,939,062 57,719,960 61,689,874 Current allocation Liabilities After 61,857,294 66,358,193 72,604,898 allocation Long-term Liabilities - - -

Other Liabilities 2,806,640 3,966,980 6,099,788 Before 55,745,702 61,686,940 67,789,662 Total allocation Liabilities After 64,663,934 70,325,173 78,704,686 allocation N/A Capital Stock 42,467,775 6,270,166 7,527,603 Additional paid-in 30,237,586 4,482,124 4,662,555 capital Before 96,525,371 94,960,135 99,100,280 Retained allocation earnings After 87,607,139 84,964,465 88,185,256 allocation Unrealized gain on 2,159,201 1,197,335 1,514,237 financial instruments Cumulative translation 1,490,885 (1,066,766) 715,457 adjustments Net loss not recognized as pension (3,202) 11 122 cost Unrealized revaluation - - 73,526 increment Unrealized gains on 306,361 200,655 1,354,470 cash flow hedges Before 173,183,977 106,043,660 114,948,250 Total allocation Shareholder’s After Equity 164,265,745 97,405,427 104,033,226 allocation Note: The above financial information for each year was audited by CPA.

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Condensed income statements (unconsolidated) – adopting ROC GAAP

Unit: NT$ thousands!

!!!!!!!!!!!!!!!!!!Year Summarized financial information of fiscal year 2009~2013 (Note 1)! Item! 2009 2010 2011 2012 2013

Operating revenue 232,576,904 296,751,129 317,669,775 Gross Profit 11,059,471 17,235,676 20,126,952 Operating Income 3,545,695 9,663,446 10,723,456 Non-operating income and 9,764,265 9,904,547 9,761,549 gains Non-operating Expenses 489,190 659,123 689,540 and Losses Income from continuing operations before income 12,820,770 18,908,870 19,795,465 tax Income from continuing N/A 12,479,066 16,488,357 16,578,159 operations Income from discontinued - - - operations Extraordinary Gain(Loss) - - - Cumulative Effect of Changes In Accounting - - - Principles Net income 12,479,066 16,488,357 16,578,159 Earnings per share 2.94 6.32 21.99 (non-retroactive) Note 1: The above financial information for each year was audited by CPA. Note 2: No capitalized interest expenses booked for each year.

(III) Auditing by CPAs CPAs and their auditing opinions in the past five years Auditing Year CPAs Opinions 2009 Yen Hsin-Fu, Lo Jui-Lan Modified unqualified 2010 Chou Tseng Hui-Chin, Hsuen Ming Ling Modified unqualified 2011 Chou Tseng Hui-Chin, Hsuen Ming Ling Modified unqualified 2012 Chou Tseng Hui-Chin, Hsuen Ming Ling Modified unqualified 2013 Chou Tseng Hui-Chin, Hsuen Ming Ling Modified unqualified

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II. Financial analysis in the past five years (I) Financial analysis for consolidated report – adopting IFRSs

Year (Note 1) Financial analysis in the past five years As of April 19, 2013 Item (Note 3) 2009 2010 2011 2012 2013

Ratio of liabilities to 52.32 53.74 Financial assets structure Ratio of long-term (炴) capital to Property, plant 1,242.37 1,349.04 and equipment Current ratio (%) 159.54 158.09 Solvency Quick ratio (%) 94.53 101.94 (%) Times interest earned 309.99 77.72 Account receivable 7.49 6.34 turnover (times) Days sales in accounts 48.73 57.57 receivable Inventory turnover 5.15 4.58 (times) Account payable Operating 6.65 6.27 ability turnover (times) Average days in sales 70.87 79.69 Property, plant and equipment turnover 43.07 43.07 (times) N/A (Note 2) Total assets turnover 1.82 1.64 (times) Ratio of return on total 9.20 7.73 assets (%) Ratio of return on equity 18.48 16.27 (%) Ratio of profit before Profitability tax to Paid-in capital 359.52 363.86 (%) (Note 7) Profit ratio (%) 5.02 4.65 Earnings per share ($) 29.84 28.66 (non-retroactive) Cash flow ratio (%) 16.19 19.78 Cash flow adequacy ratio Cash flow 130.40 145.59 (炴) (%) Cash reinvestment ratio 7.66 10.03 (%) Degree of operating 2.91 3.38 leverage Leverage Degree of financial 1.00 1.02 leverage

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The root causes of the financial ratio change in the last two years: Times interest earned: Due to the higher interest expense this year, the interest protection multiplies decreased. Cash flow ratio: The range of increase in cash inflow resulting from this year’s operating activities was greater than the range of account payable and expenses from inbound materials and other current liabilities, hence the cash flow ration increased. Cash reinvestment ratio: The increase in net cash inflow resulting from this year’s operating activities has caused cash reinvestment ratio to rise.! Note 1: The financial information is audited by CPA. Note 2: The 2014Q1 financial statements have not yet been audited by CPA up to the date of the report printed on April 19, 2014. Note 3: Equations: 1. Financial structure (1) Ratio of liabilities to assets = Total liabilities / Total assets (2) Ratio of long-term capital to property, plant and equipment = (Total equity + non-current liabilities) / Net property, plant and equipment 2. Solvency (1) Current ratio = Current assets / Current liabilities (2) Quick ratio = (Current assets – Inventory – Prepaid expenses) / Current liabilities (3) Times interest earned = Net income before tax and interest expense / Interest expense of the year 3. Operating ability (1) Account receivable turnover (including accounts receivable and notes receivable derived from business operation) = Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business operation) (2) Days sales in accounts receivable = 365 / Account receivable turnover (3) Inventory turnover = Cost of goods sold / Average inventory amount (4) Account payable turnover (including accounts payable and notes payable derived from business operation) = Cost of goods sold/ Average accounts payable (including accounts payable and notes payable derived from business operation) (5) Average days in sales = 365 / Inventory turnover (6) Property, plant and equipment turnover = Net sales / Average net property, plant and equipment (7) Total assets turnover = Net sales / Average total assets 4. Profitability (1) Ratio of return on total assets = [Net income (loss) + interest expense x (1-tax rate)] / Average total assets (2) Ratio of return on equity = Net income (loss) / Net average total equity (3) Ratio of profit before tax to paid-in capital = Net income before tax / Paid-in capital (4) Profit ratio = Net income (loss) / Net sales (5) Earnings per share = (Profit attributable to shareholders of the parent – preferred stock dividend) / Weighted average stock shares issued (Note 4) 5. Cash flow (1) Cash flow ratio = Net cash flow from operating activity / Current liabilities (2) Cash flow adequacy ratio = Net cash flow from operating activity in the past five years / (Capital expenditure + Inventory increase + Cash dividend) in the past five years (3) Cash reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Gross property, plant and equipment + Long-term investment + Other non-current assets + Working capital) (Note 5) 6. Leverage: (1) Degree of operating leverage = (Net operating revenue – Variable operating cost and expense) / Operating income (Note 6) (2) Degree of financial leverage = Operating income / (Operating income – interest expense)

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Note 4: The following factors are to be included for consideration for the calculation of earnings per share: 1. It is based on the weighted average common stock shares instead of the outstanding stock shares at yearend. 2. For capitalization with cash or Treasury stock trade, the stock circulation must be included for consideration to calculate weighted average stock shares. 3. For capitalization with retained earnings and capital surplus, the earnings per share calculated semi-annually and annually must be adjusted retroactively and proportionally to the capitalization but without considering the issuance period of the capitalization. 4. If preferred stock shares are nonconvertible and cumulative, the dividend of the year (whether it is distributed or not) should be deducted from net income or added to the net loss. If preferred stock shares are not cumulative, preferred stock dividend should be deducted from net income if there is any but it needs not be added to net loss if there is any. Note 5: The following factors are to be included for consideration for the analysis of cash flow: 1. Net cash flow from operating activity meant for the net cash inflow from operating activity on the Statement of Cash Flow. 2. Capital expenditure meant for the cash outflow of capital investment annually. 3. Increase of inventory is counted only when ending inventory exceeds beginning inventory. If the ending inventory is decreased, it is booked as zero value. 4. Cash dividend includes the amount for common stock and preferred stock. 5. Gross Property, plant and equipment meant for the total Property, plant and equipment before deducting the accumulated depreciation. Note 6: Issuers are to have operating cost and operating expenses classified into the category of fixed and variable. If the classification of operating cost and operating expense involves estimation or discretional judgment, it must be made reasonably and consistently. Note 7: For company shares without face value or each face value not equivalent to NTD10, the aforementioned calculation of paid-in capital ratio is calculated on the equity ratio under the parent company proprietors on the balance sheet.

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Financial analysis for consolidated report – adopting ROC GAAP

Year (Note 1) Financial analysis in the past five years

Item (Note 2) 2009 2010 2011 2012 2013 Ratio of liabilities to Financial 46.58 45.49 47.99 assets structure Ratio of long-term (ʘ) 320.07 1,162.07 1,113.36 capital to fixed assets Current ratio (%) 173.12 179.97 171.93 Solvency Quick ratio (%) 116.02 115.95 109.73 (ʘ) Times interest earned 58.76 104.20 157.13 Account receivable 6.80 6.54 7.99 turnover (times) Days sales in accounts 53.67 55.81 45.68 receivable Inventory turnover 5.50 5.25 5.95 (times) Operating Account payable 5.97 5.07 6.40 ability turnover (times) Average days in sales 66.36 69.52 61.34 Fixed assets turnover 9.00 11.61 38.82 (times) Total assets turnover 1.68 1.52 1.84 N/A (times) Ratio of return on total 4.54 6.45 8.10 assets (%) Ratio of return on 8.43 11.87 15.14 shareholders’ equity (%) Operating Ratio to 37.05 302.63 242.17 income Profitability paid-in Income capital (%) 45.44 341.71 267.47 before tax Profit ratio (%) 2.66 4.20 4.39 Earnings per share ($) 2.94 6.32 21.99 (non-retroactive) Cash flow ratio (%) 33.30 29.96 17.88 Cash flow adequacy Cash flow 78.87 104.67 157.00 (炴) ratio (%) Cash reinvestment ratio 18.51 14.36 7.80 (%) Degree of operating 4.78 3.16 3.08 leverage Leverage Degree of financial 1.02 1.01 1.01 leverage

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The root causes of the financial ratio change in the last two years: Times interest earned: At the expiration of current CB, the reduction in amortized value decreased (the CB and ECB issued by the company does not pay out relevant interests. However, to cooperate with the regulations of new Financial Reporting, the amortized expense resulting from the discount on bonds is recognized as interest expense without the actual cash payout) has caused the interest protection multiples to increase. Account receivable turnover (times): The range of decline in average account receivable was higher than that of operating amount, causing the current account receivable turnover to go up. Account payable turnover (times): The range of decline in average account payable was higher than that of sale costs, causing the current account payable to go up. Fixed assets turnover (times): The decline in current average fixed assets net value caused the current fixed asset turnover to go up. Total assets turnover (times): The decline in current average total assets caused the current total assets turnover to go up. Ratio of return on total assets (%): The decline in current average total assets caused the ratio of return on total assets to go up. Ratio of return on shareholders’ equity: This range of decline in current profit/loss after tax was lower than that of the decline in average shareholder equity, causing the current ratio of return on shareholders’ equity to go up. Cash flow ratio: The net cash flow from current operating activities declined while the balance of current liabilities went up, causing the current cash flow ratio to go down. Cash flow adequacy ratio (%): The rise in the net cash flow from latet 5 eyars of operating activities caused the current cash flow adequacy ratio to go up. Cash reinvestment ratio: The decline net cash flow of current operating activities caused decline in current cash reinvestment ratio. Note 1: The financial information is audited by CPA. Note 2: Equations: 1. Financial structure (1) Ratio of liabilities to assets = Total liability/Total assets (2) Ratio of long-Term capital to fixed assets = (Net shareholders’ equity + Long-term liability) / Net fixed assets 2. Solvency (1) Current ratio = Current assets / current liability (2) Quick ratio = (Current assets – Inventory – Prepaid expense) / Current liability (3) Times interest earned = Net income before tax and interest expense / Interest expense of the year 3. Operating ability (1) Account receivable turnover (including accounts receivable and notes receivable derived from business operation) = Net sales / Average accounts receivable (including accounts receivable and notes receivable derived from business operation) (2) Days sales in accounts receivable = 365 / Account receivable turnover (3) Inventory turnover = Cost of goods sold / Average inventory amount (4) Account payable turnover (including accounts payable and notes payable derived from business operation) = Cost of goods sold/ Average accounts payable (including accounts payable and notes payable derived from business operation) (5) Average days in sales = 365 / Inventory turnover (6) Fixed assts turnover = Net sales / Net fixed assets (7) Total assets turnover = Net sales / Total assets 4. Profitability (1) Ratio of return on total assets = [Net income (loss) + interest expense x (1-tax rate)] / Average total assets (2) Ratio of return on shareholders’ equity = Net income (loss) / Net average shareholders’ equity (3) Ratio to paid-in capital = Net income before tax / Paid-in capital (4) Profit ratio = Net income (loss) / Net sales (5) Earnings per share = (Net income – preferred stock dividend) / Weighted average stock shares issued (Note4)

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5. Cash flow (1) Cash flow ratio = Net cash flow from operating activity / Current liabilities (2) Cash flow adequacy ratio = Net cash flow from operating activity in the past five years / (Capital expenditure + Inventory increase + Cash dividend) in the past five years (3) Cash reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Fixed assets + Long-term investment + Other assets + Working capital) (Note5) 6. Leverage: (1) Degree of operating leverage = (Net operating revenue – Variable operating cost and expense) / Operating income (2) Degree of financial leverage = Operating income / (Operating income – interest expense) Note 3: The following factors are to be included for consideration for the calculation of earnings per share: 1. It is based on the weighted average common stock shares instead of the outstanding stock shares at yearend. 2. For capitalization with cash or Treasury stock trade, the stock circulation must be included for consideration to calculate weighted average stock shares. 3. For capitalization with retained earnings and additional paid-in capital, the earnings per share calculated semi-annually and annually must be adjusted retroactively and proportionally to the capitalization but without considering the issuance period of the capitalization. 4. If preferred stock shares are nonconvertible and cumulative, the dividend of the year (whether it is distributed or not) should be deducted from net income or added to the net loss. If preferred stock shares are not cumulative, preferred stock dividend should be deducted from net income if there is any but it needs not be added to net loss if there is any. Note 4: The following factors are to be included for consideration for the analysis of cash flow: 1. Net cash flow from operating activity meant for the net cash inflow from operating activity on the Statement of Cash Flow. 2. Capital expenditure meant for the cash outflow of capital investment annually. 3. Increase of inventory is counted only when ending inventory exceeds beginning inventory. If the ending inventory is decreased, it is booked as zero value. 4. Cash dividend includes the amount for common stock and preferred stock. 5. Gross fixed assets meant for the total fixed assets before deducting the accumulated depreciation. Note 5: Issuers are to have operating cost and operating expenses classified into the category of fixed and variable. If the classification of operating cost and operating expense involves estimation or discretional judgment, it must be made reasonably and consistently.

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(II) Financial analysis for separate report – adopting IFRSs

྽ԃࡋᄒԿ Year (Note 1) Financial analysis in the past five years ԃ Д 103 4 19 В଄୍ Item (Note 3) 2009 2010 2011 2012 2013 ၗ਑ Ratio of liabilities to 39.23 38.80 Financial assets structure Ratio of long-term (炴) capital to Property, 3,148.28 3,044.80 plant and equipment Current ratio (%) 172.09 165.85 Solvency Quick ratio (%) 131.49 130.03 (%) Times interest earned 5,332,951.00 5,112,353.40 Account receivable 5.98 5.13 turnover (times) Days sales in 61.03 71.15 accounts receivable Inventory turnover 13.69 11.66 (times) Account payable Operating 6.77 6.04 ability turnover (times) Average days in sales 26.66 31.30 Property, plant and equipment turnover 97.82 84.99 (times) Total assets turnover N/A (Note 2) 1.93 1.68 (times) Ratio of return on 11.58 10.02 total assets (%) Ratio of return on 18.65 16.42 equity (%) Ratio of profit before tax to Profitability 354.23 344.15 Paid-in capital (%) (Note 7) Profit ratio (%) 5.99 5.98 Earnings per share ($) 29.84 28.66 (non-retroactive)) Cash flow ratio (%) 20.92 20.87 Cash flow adequacy Cash flow 115.09 114.10 (炴) ratio (%) Cash reinvestment 3.70 1.41 ratio (%) Degree of operating 1.34 1.70 leverage Leverage Degree of financial 1.00 1.00 leverage The root causes of the financial ratio change in the last two years: Cash reinvestment ratio: The current cash dividend amount issued and long-term investment balance increased when compared with previous period, causing the current cash reinvestment ratio to decline. Note: The notes are the same as Financial analysis for consolidated report – adopting IFRSs

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Financial analysis for unconsolidated report – adopting ROC GAAP

Year (Note 1) Financial analysis in the past five years

Item (Note 2) 2009 2010 2011 2012 2013 Ratio of liabilities to Financial 24.35 36.78 37.10 assets structure Ratio of long-term (ʘ) 4,052.73 2,483.98 2,919.09 capital to fixed assets Current ratio (%) 187.28 190.71 182.90 Solvency Quick ratio (%) 154.53 150.40 146.56 (ʘ) Times interest earned 127.32 234.31 421.29 Account receivable 5.41 6.04 5.96 turnover (times) Days sales in accounts 67.46 60.43 61.24 receivable Inventory turnover 9.26 15.99 15.28 (times) Operating Account payable 7.20 6.94 6.59 ability turnover (times) Average days in sales 39.41 22.86 23.88 Fixed assets turnover 51.77 69.48 77.42 (times) Total assets turnover 1.03 1.50 1.81 (times) N/A Ratio of return on total 5.60 8.35 9.48 assets (%) Ratio of return on 7.33 11.81 15.00 shareholders’ equity (%) Ratio to Operating 8.35 154.12 142.46 paid-in income Profitability capital Income before 30.19 301.57 262.97 (%) tax Profit ratio (%) 5.37 5.56 5.22 Earnings per share ($) 2.94 6.32 21.99 (non-retroactive) Cash flow ratio (%) 46.17 36.41 14.83 Cash flow adequacy Cash flow 51.68 85.46 122.16 (炴) ratio (%) Cash reinvestment ratio 9.01 10.87 0.42 (%) Degree of operating 2.60 1.54 1.61 leverage Leverage Degree of financial 1.03 1.01 1.00 leverage

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The root causes of the financial ratio change in the last two years: Times interest earned: At the expiration of current CB, the reduction in amortized value decreased (the CB and ECB issued by the company does not pay out relevant interests. However, to cooperate with the regulations of new Financial Reporting, the amortized expense resulting from the discount on bonds is recognized as interest expense without the actual cash payout) has caused the interest protection multiples to increase. Ratio of return on total assets: The increase in this year’s net profit caused the return on total asset ratio to increase. Ratio of return on shareholders’ equity: Last year’s capital reduction and growing revenue causing the rise ration of return on shareholders’ equity to rise. Ratio of operating income to Paid-in capital: The increase in this year’s operating income was smaller than the increase in additional paid-in capital caused the ratio of operating income to paid-in capital to drop. Cash flow ratio: This year’s revenue growth, increase in account receivable resulting from sales of goods, and increase in inventory net balance have caused the net cash inflow from current operating activities to drop, therefore the cash flow ratio declined accordingly. Cash flow adequacy ratio: The competent authority actively controls the inventory quantity, causing reduction in inventory increase in the last 5 years while the net cash inflow resulting from the total operating activities in the last 5 years to rise, therefore the cash flow adequacy increased accordingly. Cash reinvestment ratio: This year’s revenue growth, increase in account receivable resulting from sales of goods, and increase in inventory net balance have caused the net cash inflow from current operating activities to drop, when compared with last period. Note: The notes are the same as Financial analysis for consolidated report – adopting ROC GAAP

III. Supervisors’ report in the most recent years

ASUSTek Computer Inc. SUPERVISORS’ REPORT

The Board of Director has prepared the Company’s 2013 business report, financial statements and distribution of profits. All of the above have been reviewed and determined to be correct and accurate by the undersigned. According to Article 219 of the Company Act, we hereby submit this report.

ASUSTek Computer Inc.

Supervisors: Tze-Kaing Yang

Chung-Jen Cheng

L.H. Yang

March 27 2014

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IV. Separate Financial Statements and Report of Independent Accountants in the most recent years: Please refer to Page 143-206 for details.

V. Consolidated Financial Statements and Report of Independent Accountants of the parent company and subsidiaries in the most recent years: Please refer to Page 207-304 for details.

VI. Financial difficulties faced by the company and the related party in the most recent years and up to the date of the annual report printed: None

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VII. Review of financial position, management performance and risk management

I. Analysis of financial position Consolidated Comparison of Financial Position

Unit: NT$ thousands Year Difference 2012 2011 Item Amount % Current assets 238,864,019 214,271,675 24,592,344 11.48 Property, plant and 10,746,683 10,764,132 (17,449) (0.16) equipment Long-term investment, intangible assets and other 46,462,053 42,997,570 3,464,483 8.06 assets Total assets 296,072,755 268,033,377 28,039,378 10.46 Current liabilities 151,095,249 134,303,079 16,792,170 12.50 Non-current liabilities 8,006,022 5,942,643 2,063,379 34.72 Total liabilities 159,101,271 140,245,722 18,855,549 13.44 Share capital 7,427,603 7,527,603 (100,000) (1.33) Capital surplus 4,452,237 4,305,220 147,017 3.41 Retained earnings 116,472,478 111,704,586 4,767,892 4.27 Other equity 6,847,184 2,460,065 4,387,119 178.33 Total equity attributable to 135,199,502 125,997,474 9,202,028 7.30 shareholders of the parent Total equity 136,971,484 127,787,655 9,183,829 7.19 Analysis of financial ratio change: 1. Non-currentġliabilities: Caused by the increase in current deferred income tax liabilities. 2. Other equity: Caused by the current recognition of unrealized holding gain resulting from the supply of financial assets for sale.

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Separate Comparison of Financial Position

Unit: NT$ thousands Year Difference 2013 2012 Item Amount % Current assets 130,087,168 130,453,670 (366,502) (0.28) Property, plant and 4,440,336 4,002,107 438,229 10.95 equipment Long-term investment, intangible assets and other 86,377,014 72,895,438 13,481,576 18.49 assets Total assets 220,904,518 207,351,215 13,553,303 6.54 Current liabilities 78,436,223 75,803,458 2,632,765 3.47 Non-current liabilities 7,268,793 5,550,283 1,718,510 30.96 Total liabilities 85,705,016 81,353,741 4,351,275 5.35 Share capital 7,427,603 7,527,603 (100,000) (1.33) Capital surplus 4,452,237 4,305,220 147,017 3.41 Retained earnings 116,472,478 111,704,586 4,767,892 4.27 Other equity 6,847,184 2,460,065 4,387,119 178.33 Total equity 135,199,502 125,997,474 9,202,028 7.30 Analysis of financial ratio change: 1. Non-current liabilities: Caused by the increase in current deferred income tax liabilities. 2. Other equity: Caused by the current recognition of unrealized holding gain resulting from the supply of financial assets for sale and increase in other comprehensive net income share resulting from the subsidiary, associate company and joint venture recognized under Equity Method.

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II. Business performance (I) Consolidated Comparison of Business Performance Unit: NT$ thousands

Item 2013 2012 Amount change Ratio change (%) Operating revenue 463,286,507 448,684,621 14,601,886 3.25 Operating costs (403,316,442) (387,566,934) (15,749,508) 4.06 Gross profit 59,970,065 61,117,687 (1,147,622) (1.88) Operating expenses (40,134,055) (39,285,827) (848,228) 2.16 Operating profit 19,836,010 21,831,860 (1,995,850) (9.14) Non-operating income and expenses Other income 1,713,743 944,432 769,311 81.46 Other gains (losses) 5,256,646 2,840,464 2,416,182 85.06 Finance costs (352,266) (87,587) (264,679) 302.19 Share of profit of associates and joint ventures accounted 571,969 1,534,044 (962,075) (62.71) for under equity method Total non-operating income 7,190,092 5,231,353 1,958,739 37.44 and expenses Profit before income tax 27,026,102 27,063,213 (37,111) (0.14) Income tax expense (5,494,438) (4,526,035) (968,403) 21.40 Profit for the year 21,531,664 22,537,178 (1,005,514) (4.46) Other comprehensive income Financial statements translation differences of 797,850 (1,128,920) 1,926,770 (170.67) foreign operations Unrealized gain on valuation of available-for-sale 3,193,282 3,276,123 (82,841) (2.53) financial assets Cash flow hedges 57,044 (1,646,511) 1,703,555 (103.46) Actuarial gain on defined (6,770) 11,558 (18,328) (158.57) benefit plan Share of other comprehensive income of associates and 617,033 (618,524) 1,235,557 (199.76) joint ventures accounted for under equity method Income tax relating to the components of other (275,490) (297,580) 22,090 (7.42) comprehensive income Other comprehensive income for the 4,382,949 (403,854) 4,786,803 (1185.28) year Total comprehensive income for the 25,914,613 22,133,324 3,781,289 17.08 year Profit attributable to shareholders of 21,449,895 22,463,572 (1,013,677) (4.51) the parent

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Item 2013 2012 Amount change Ratio change (%) Total comprehensive income attributable to shareholders of the 25,826,521 22,061,034 3,765,487 17.07 parent Analysis of financial ratio change: 1. Non-operating income and expenses: Caused by the increase in disposition of investment profits and dividend earned. 2. Income tax expense: Caused by the increase in taxation in countries with high tax rates. 3. Other comprehensive income: Caused by the current recognition of differences resulting from translating the financial statements of a foreign operation, cash flow hedge and the increase in other comprehensive net income share resulting from the associate company and joint venture recognized under Equity Method.

111 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 111!

Separate Comparison of Business Performance Unit: NT$ thousands

Item 2013 2012 Amount change Ratio change (%) Operating revenue 358,741,099 375,118,873 (16,377,774) (4.37) Operating costs (335,795,322) (350,312,389) 14,517,067 (4.14) Gross profit 22,945,777 24,806,484 (1,860,707) (7.50) Unrealized loss (profit) from sales 249,992 (324,190) 574,182 (177.11) Realized gross profit 23,195,769 24,482,294 (1,286,525) (5.25) Operating expenses (13,420,553) (9,717,087) (3,703,466) 38.11 Operating profit 9,775,216 14,765,207 (4,989,991) (33.80) Non-operating income and expenses Other income 1,281,587 619,124 662,463 107.00 Other gains (losses) 3,729,676 1,739,906 1,989,770 114.36 Finance costs (5) (5) - - Share of profit of subsidiaries, associates and joint ventures 10,775,288 9,540,518 1,234,770 12.94 accounted for under equity method Total non-operating income 15,786,546 11,899,543 3,887,003 32.67 and expenses Profit before income tax 25,561,762 26,664,750 (1,102,988)) (4.14) Income tax expenses (4,111,867) (4,201,178) 89,311 (2.13) Profit for the year 21,449,895 22,463,572 (1,013,677) (4.51) Other comprehensive income Financial statements translation 745,749 (915,962)) 1,661,711 (181.42) differences of foreign operations Unrealized gain on valuation of 2,988,705 3,288,300 (299,595) (9.11) available-for-sale financial assets Share of other comprehensive income of subsidiaries, associates and joint ventures 949,998 (2,528,409) 3,478,407 (137.57) accounted for under equity method Income tax relating to the components of other (307,826) (246,467) (61,359) (24.90) comprehensive income Other comprehensive income for the 4,376,626 (402,538) 4,779,164 (1187.26) year Total comprehensive income for the 25,826,521 22,061,034 3,765,487 17.07 year Analysis of financial ratio change: 1. Operating expenses: This year’s investment in R&D for new products and expansion of market caused the rise in operating expenses. 2. Operating profit: Reduction in this year’s operating grow profit and rise in operating expenses have caused the net operating profit to drop. 3. Non-operating income and expenses:!Caused by increase in the disposition of investment profits, net foreign currency exchange profits and dividend earned.! 112 !

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Item 2013 2012 Amount change Ratio change (%) 4. Other comprehensive income: Caused by the current recognition of differences resulting from translating the financial statements of a foreign operation and the increase in other comprehensive net income share resulting from the subsidiary, associate company and joint venture recognized under Equity Method.

III. Analysis of cash flow (I) Consolidated liquidity analysis of the last two years

Year 2013 2012 Financial ratio change Item

Cash flow ratio 19.78ʘ 16.19% 22.17ʘ Cash flow adequacy ratio 145.59ʘ 130.40% 11.65ʘ Cash reinvestment ratio 10.03ʘ 7.66% 30.94ʘ Analysis of financial ratio change: 1. Increase of cash flow ratio this year: The increase of cash inflow for this year’s operating activities is greater than the accounts payable and expenses for inbound material inventory as well as other current liabilities, therefore the cash flow ratio increased. 2. Increase of cash reinvestment ratio this year: The net cash inflow of this year’s operating activities increased; therefore the cash reinvestment ratio increased accordingly.

Separate liquidity analysis of the last two years

Year 2013 2012 Financial ratio change Item Cash flow ratio 20.87% 20.92% (0.24)% Cash flow adequacy ratio 114.10% 115.09% (0.86)% Cash reinvestment ratio 1.41% 3.70% (61.89)% Analysis of financial ratio change: Decrease of cash reinvestment ratio this year: Current cash dividend amount and long-term investment balance increased when compared with last period, causing the current cash reinvestment ratio to decline.

(II) Analysis of cash liquidity in one year Unit: NT$100 million

Beginning cash Expected net Expected Expected cash Remedial measures for the balancec cash flow from cash outflow surplus expected insufficient cash operating activity of the yeare (deficit) d Investing Financing of the year cɠdɡe activity activity 242.63 180.04 147.84 274.83 - -

113 !

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1. Analysis of cash flow change: (1)Operating activity: Net cash inflow from operating activity for an amount of NT$18 billion (2)Investing activity: Net cash outflow from investing activity including long-term investment for an amount of NT$300 million (3)Financing activity: Net cash outflow from financing activity including dividend distribution for an amount of NT$14.48 billion 2. Remedial measures for the expected insufficient cash and liquidity analysis: N/A

IV. The impact of significant capital expenditure on finance in recent years: Significant capital expenditure and the source of fund: N/A

V. Reinvestment in recent years: Unit: NT$ thousands Item Gain or Loss Root cause of Corrective Amount! Policy Investment Plans (Note)! in 2013! profit or loss! action Develop brand business to Focus on brand Own brand improve marketing and .! .! business! 1,821,635! competitiveness 10,137,451 business and operating development performance Note: Own brand business included: ASUS GLOBAL PTE. LTD., ASUS TECHNOLOGY PTE. LIMITED, ASUS TECHNOLOGY INCORPORATION, ASUSTEK COMPUTER (SHANGHAI) CO. LTD., ASUS COMPUTER INTERNATIONAL, ASUSTEK Computer (Chongqing) CO., LTD., ACBZ IMPORTACAO E COMERCIO LTDA., ASUS JAPAN INCORPORATION, ASUS INDIA PRIVATE LIMITED, ASUS COMPUTER GMBH and ASUS HOLDINGS MEXICO, S.A. DE C. V.

VI. Risk analysis and evaluation in recent years and up to the date of the annual report printed:

(I) The impact of interest rate, exchange rate, and inflation on the company’s income and expense and the responsive measures: 1. The impact of interest rate on the company’s income and expense and the responsive measures: The net interest income in 2013 amounted to less than 0.06% of total operating income; therefore, the impact of interest rate on the company was insignificant. 2. The impact of exchange rate on the company’s income and expense and the responsive measures: The exchange gain recognized in 2013 amounted to 0.58% of total operating income; therefore, the impact of exchange rate on the company was insignificant. 3. The impact of inflation on the company’s income and expense and the responsive measures: Although major global economies adopted Easing Monetary Policy in 2013, such adoption does not seem to cause major impact on the company upon assessment and the company will continue to follow the development closely.

(II) Conducting high-risk and high-leverage investment, granting loans to others, endorsement & guarantee and directives policy, root cause of profit and loss, and the responsive measures:

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The company has granted loans to others, endorsement & guarantee, and directives trade processed in accordance with the “Assets Acquisition and/or Disposition Procedure” and “Loans and Endorsement & Guarantee Procedure” of the company and the responsive measures. The company has granted no loan to others in 2013 and the year-end balance of external endorsement and guarantee only accounted for 1.10% of the total company net profits without major impact. (III) R&D plans and budgeted R&D expense: ASUS cannot stress enough the importance of R&D team cultivation and training since the incorporation. ASUS is able to have the key technology of products controlled to secure the timing of mass production. ASUS will base on the said fine tradition to reinforce the R&D capability of the company and add it with market movement to have unique and innovative information products developed. 1. Products development planned in 2013: (1) Digital control wireless transmission technology dual core CPU MB (2) Advanced 3D image display and wireless TV transmission graphic card (3) Multi-functional, three-in-one smartphone & Padfone Note & FonePad (4) Ultra Mobile PC (5) High-speed router / exchanger / firewall / VPN (6) New-generation advanced server (7) Professional LED display (8) All-In-One PC, Transformer AIO (9) Transformer Pad (10) Touch Windows Notebook & Tablet (11) Wearable electronic products 2. R&D budget in 2012: NT$9~10 billion (IV) The impact of domestic and international policies and law change on the company’s finance and the responsive measures: None. (V) The impact of technology change and industrial change on the company’s finance and the responsive measures: ASUS constantly strives to be an integrated 3C solution provider (Computer, Communications, Consumer electronics). Technology change provides the company with business opportunity for new products. The company was with 11.66 times of inventory turnover in 2013; apparently, there was not any significant negative impact on finance. (VI) The impact of industrial image change on business risk management and the responsive measures: ASUS has maintained a fine industrial image and there is not any negative report on the company’s image. (VII) The expected effect, potential risk, and responsive measures of merger: The company’s did not have any merger conducted in 2010 and up to the date of the annual report printed: Not Applicable (VIII) The expected effect, potential risk, and responsive measures of plant expansion: Not Applicable (IX) The risk faced by procurements and sales hub and the responsive measures: The company’s procurements and sales are not centralized and with a good customer relationship established; therefore, no risk of procurements and sales centralization. (X) The impact of massive stock transfer or change by directors, supervisors, and shareholders with over 10% shareholding, the risk, and the responsive measures: 115 !

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There was not any massive stock transfer or change by directors, supervisors, and shareholders with over 10% shareholding in 2013 and up to the date of the annual report printed. (XI) The impact of right to operation change on the company, the risk, and the responsive measures: Not Applicable (XII) Legal and non-legal events: 1. The company’s major legal issues, non-legal issues, or administrative lawsuits settled or in pending: (1) In May 2007, a US company filed a lawsuit against the Company and its US subsidiary for patent infringement. In January 2012, the Company was ordered by the court to compensate the plaintiff, but the Company has filed with a higher court. The higher court changed the original judgment and the Company finally won the case. Based on the final outcome of the case, the Company claimed from the plaintiff for reimbursement of the litigation fee. In January 2011, the plaintiff, a US company, also filed a lawsuit against the Company and its US subsidiary for patent confirmation, and the lawsuit is currently under investigation. (2) Several patentees filed lawsuits or investigations for patent infringement including LAN chip, PCI-Express switch, the patent of Blu-ray, Dynamic voltage scaling function for solid state disk, DDR, FLASH memory, LCD, Bluetooth, BIOS, Image chip, thermal management method and device, Display, Bluetooth HS technology and notebooks, Eee PC, products of Wireless LAN, products of Wireless telecommunication, router with dual channel transmission function, and equipments with Andriod system against the Company. These lawsuits or investigations are currently under investigation in a California court, in a Texas court, in a Delaware court, in a Virginia court and in United States International Trade Commission. The Company cannot presently determine the ultimate outcome of these lawsuits, but has already recognized the possible loss in the books. (3) Several patentees filed lawsuits or investigations for patent infringement including mobile products with switching signals based on the signal strength, products with the image resizing and scanning format conversion, digital image processor, interactive video system, communication switch technique, Tablet PC with user-selectable log in and unlock function, products of Web Storage, products of display technology, products with buffer memory and buffer access, SED hard discs, Windows BitLocker function products, Wireless Router products with antenna connector, radiator of display card, wireless Internet products with monitor functions, Bluetooth and wireless communication products, Padfone series products, NOR Flash and XtraROM chip products, products of auto-rotate for turn on/off functions, GaN LED products, products with UMTS network devices and multi-core ARM processor products against the Company. These lawsuits or investigations are currently under investigation in a Texas court, in a California court, in a Florida court, in a Delaware court, in a Massachusetts court, in a Germany court, in a Shanghai court and in a Taiwan intellectual property court. The Company cannot presently determine the ultimate outcome and effect of these lawsuits. (4) Lawsuits for consumer rights: In February 2012, consumer F filed a Company lawsuit for GPS and WiFi function being interfered due to the design of PAD case against the Company and its US subsidiary in a Northern California court.

116 !

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The parties involved in the lawsuit have currently reached a compromise, but the Company has not yet fulfilled its obligation. (5) In July 2013, a US company N filed a lawsuit against the Company and its US subsidiary for overstated advertising on Wi-Fi router products, unfair competition and violation of FCC regulations. The lawsuit or investigation is currently under investigation in a Northern California court. The Company cannot presently determine the ultimate outcome of this lawsuit, but has already recognized the possible loss in the books. (6) A plaintiff filed a criminal with civil suit against the Company and its subsidiary, ASMEDIA, for infringement of patents. On August 30, 2012 and April 16, 2013, the Intellectual Property Rights Police Team (IPRP) has searched ASMEDIA office and executed seizure of related evidence. The lawsuit is currently under examination in Taiwan Taipei District Court. ASMEDIA has appointed the attorney to deal with the cases through the legal process and go ~50~ through subsequent related matters and to cooperate with authority investigation. ASMEDIA cannot presently determine the effect, but the Company and ASMEDIA expect the above cases have no material effect on their operating and financial position.

2. The related party’s major legal issues, non-legal issues, or administrative lawsuits settled or in pending: N/A (XIII) Other significant risks and responsive measures: Not Applicable

VII. Other material events: None

117 ! 117 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468

VIII. Special disclosures

I. Related party (II) Consolidated financial statements of the related party 1. Related party (1) Organizational structure of related party: Please refer to Page 119-122. (2) Company profile of related party: Please refer to Page 123-127. (3) A controlling and hierarchical relationship according to Article 369.3 of Company Law: None (4) Business scope of ASUS Group: The business scope of ASUS and the related party includes computer-related product design, production, processing, and sales. Some related parties are in the business of investment. In general, the collaboration within the organization is to generate the best result through reciprocal support in technology, production, marketing, and sales. (5) Directors, supervisors, and president of the related party: Please refer to Page 128-134. 2. Business operation of the related party: Please refer to Page 135-141.

(II) Consolidated Financial Statements and Report of Independent Accountants of the parent company and subsidiaries: Please refer to Page 207-304.

(III) Related Party Report: Not Applicable

II. Subscription of marketable securities privately in the most recent years and up to the date of the report printed: None

III. The stock shares of the company held or disposed by the subsidiaries in the most recent years and up to the date of the report printed: None

IV. Supplementary disclosures: None

V. Occurrence of events defined in Securities Transaction Law Article 36.2.2 that has great impact on shareholder’s equity or security price in the most recent years and up to the date of the report printed: None

118 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 118 ! Ltd 100% (HuiZhou) HOLDING Enertronix Inc. INTERNATIONAL Enertronix, ENERTRONIX ENERTRONIX Holding Limited LTDAGAIT LTD AGAiT Technology 100% 100% ASUS AGAIT AGAiTech INTERNATIONAL TECHNOLOGY TECHNOLOGY TECHNOLOGY (H.K.) TECHNOLOGY CORP. LIMITED INTELLIGENTAGAIT (SHENZHEN) LIMITED(SHENZHEN) LIMITED (SHENZHEN) INC. LIMITED Corp. TECHNOLOGY INVESTMENT GREATEXTEND Technology Co., Ltd. LTD Co., Ltd CORP. 100% 56.73% 43.89% 100% 100% 100% LIMITED ASUSTEK International ASMEDIA HOLDINGS United INC. 100% Company Limited WAVEFACE

119 B.V. ASUS Holland Asustek Computer Inc. Computer Asustek

INC. eMes ASUS Waveface CENTRAL Int'l United 100% 0.41% 76.40% 100% 100% 100% 100% 100% 100% 100% CO., LTD. Service s.r.o. INTERNATIONAL SHINEWAVE (SHUZHOU) Czech Holding TEC ASIA Technology Corp. Hua-Cheng VentureCapital UPI INC. ASUS ASMEDIA AAEON AXUS TECHNOLOGY TECHNOLOGY TECHNOLOGY MICROSYSTEMS Semiconductor UPI Corp. INC. INC. INC. COMPUTER INTERNATIONAL Semiconductor INC. 0.01% 9.54% 8.29% 9% 0.01% Investment INTERNATIONAL TECHNOLOGY TECHNOLOGY SHINEWAVE INC. Co., Ltd. AXUS Hua-Min ASUS ASUS CloudASUS ASMEDIA AAEON (Luxembourg) MICROSYSTEMS WU, HAN-CHANG 100% 100% 4.05%100% 9% 4.99% ASUS CORP. 83.43% 84.99% 100% 100% 100% 100% 50.99% 100% CLOUD CO., LTD. PTE. LTD. r.l. S.à INC. INC. Corp. ASUSCLOUD SINGAPORE TECHNOLOGY INFORMATIONAL ASUS Organization Chart (2013.12.31) - (1) (2013.12.31) Chart Organization ASUS CLOUD(TIANJIN) ASUS

119 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468

UPI Corp. 100% 37.50% Semiconductor (Shenzhen)Corp. UPI-Semiconductor Semiconductor Corp.(HK) Ltd. Corp. Ltd. 100% 100% UBIQ UPI Semiconductor 100% UNIMAX LIMITED HOLDINGS ELECTRONICS ASUS ASUS UNIMAX Middle East FZC INC. Inc. ASUS PILOT 100% ASUS LIMITED Asustek CHANNEL LIMITED Computer INTERNATIONAL TECHNOLOGY TECHNOLOGY ASUS PTE.LIMITED PTE.LIMITED Continueto (4)

120 100%DEEP 100% ASUS LIMITED DELIGHT 1% 0.07% 100% 20% 100% PTE. LTD. L.L.C. ASUS SERVICE ASUS INDONESIA EGYPT 100% ASUS GLOBAL PTE. LTD. ! ASUS Organization Chart (2013.12.31) -(2) (2013.12.31) Chart Organization ASUS

120 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 HEALTHCARE Healthcare USA, 100% 100% ONYX ONYX AAEON ONYX Healthcare Europe B.V. INC. INVESTMENT GmbH CO., LTD. INC. (EUROPE) B.V. INC. 47% AAEON TECHNOLOGY (SUZHOU)INC. 94.20% 100% AAEON AAEON SINGAPORE LTD. PTE. TECHNOLOGY TECHNOLOGY INC. INC. CO., LTD. 100% 100% 100% 100% 100% 100% 85% AAEON AAEON AAEON AAEON AAEON MagicXpress ELECTRONICS, DEVELOPMENT TECHNOLOGY TECHNOLOGY TECHNOLOGY Corp Technology

121 Ltd. Inc. Corp Askey 100% 100% 100% 100% ASHINE Askey Askey Asustek Computer TECHNOLOGY (SUZHOU) LTD. (Jiangsu) Limited (Wujiang) Corp. International

Corp. 100% Askey 100% MAGIC Computer CO., LTD. INTERNATIONAL (Shanghai) Limited Profit Technology Limited International International Askey Leading Askey Openbase UNI Leader Magicom GmbH. Co., Ltd. Communication (beliquidated) Askey (Vietnam) SAS 80% Corp 100% 100% 100% 100% 100% 100% 100% 100% 100% Dynalink SILIGENCE Wise Access International (HK) Limited Co., Ltd ASUS Organization Chart (2013.12.31) - (3) (2013.12.31) Chart Organization ASUS

121 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468

JAPAN 100% CO. LTD. ASUSTEKCOMPUTER (SHANGHAI) INCORPORATION ASUS 100% Technology INVESTMENTS (Suzhou) Co. Ltd. Co. (Suzhou) (SUZHOU) Co.(SUZHOU) Ltd. IBERICAS.L. Technology (HONGKONG) LIMITED ASUS ASUS ASUS Czech Middle ASUS ASUS ASUS ASUS ASUS ASUS COMPUTER COMPUTER Benelux B.V. GmbH Service Service s.r.o. East FZCO LIMITED ASUSTEK (UK)ASUSTEK SERVICE ASUS AUSTRALIA AUSTRALIA PTYLIMITED PTYLIMITED COMERCIO LTDA. ! IMPORTACAOE

122 ASUS TECHNOLOGY (Chongqing) Co. Ltd. PTE.LIMITED Private Computer ASUS IndiaASUS ASUSTEK ACBZ ASUS LTD Limited Polska EGYPT KOREA ITALY FRANCE DE C. V. MEXICO, S.A.MEXICO, ASUS HOLDINGASUS ASUSISRAEL (TECHNOLOGY) S.A.C. PTE. LTD. Sp.z.o.o. L.L.C. Co., Ltd. S.R.L. SARL COMPUTER (S) ASUS PERU ASUS ASUS SERVICE ASUS PrivateLimited COMERCIO LTDA. INDONESIA S.A.C. IMPORTACAO E 1% ASUS DE C. V. ASUS HOLDINGS Holland B.V. A. S. MEXICO, A. S. MEXICO, ASUS ASUS ASUSASUS ASUSTEK ASUS ASUS ACBZ ASUS PERU ASUS ASUS ASUSTEK ASUS DE CV DE C. V. PTE. LTD. Services LLCServices Gmbh (Vietnam) Ltd Co., ASUS ASUS 100%Czech 100% Technology Technology 100%100% Technology 100% 100% 100% 100%100% 100% 0.01% 99% 99.93% 1% 99% 100% 1% 100% 99% 100% 99% 100% 100% 100% 100% 100% 100% 100% 99.99% 100% 100% 99.59% 80% 100% 100% 100% ASUS COMPUTER ASUS PORTUGAL, LDA UNIPESSOAL Republic Republic s.r.o. ASUS Organization Chart (2013.12.31) - (4) (2013.12.31) Chart Organization ASUS SOCIEDADE Hungary Switzerland CO., LTD. (SHANGHAI) COMPUTER MEXICO, SA

122 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 rint rint p In In thousand NTD / as of Dec 31, 2013 Manufacturing and selling RAID products products RAID and selling Manufacturing Developing, manufacturing and selling ink-jet Designing, developing and manufacturing high-speed analog circuit Selling 3C products in North America America North in products 3C Selling investment business peripherals Computer Ink-jet print heads and investment business technology ink-jet digital image output business investment circuit analog High-speed heads and ink-jet digital image output technology technology output image digital and ink-jet heads Communication business investment business investment Communication products communication about consulting and Selling Selling 3C products in Taiwan in Taiwan products 3C Selling products 3C Repairing products 3C Selling investment business peripherals Computer Developing, software information system designing and consulting about CORP. INTERNATIONAL ASKEY business investment Communication investment business peripherals Computer products communication and selling Manufacturing business investment Communication Developing, Developing, software information system designing and consulting about selling and repairing manufacturing, Designing, products and computer peripheral spare communication parts 14,903 20,621 40,281 40,063 55,937 85,939 11,499 118,200 201,000 563,879 680,000 190,000 834,540 107,250 110,279 332,629 1,145,000 3,502,855 2,713,149 6,933,042 - (Note 1)

123 ADDRESS ADDRESS CAPITAL ITEMS / PRODUCTION BUSINESS MAJOR Honk Kong Kong Honk France .10.01 .10.01 Islands Virgin British 85.06.28 85.06.28 USA 83.06.21 83.06.21 USA 85 84.12.29 84.12.29 Taiwan 87.06.16 91.05.21 Taiwan Samoa 88.06.23 Islands Cayman 97.05.27 97.05.27 97.05.27 Taiwan 86.08.06 Taiwan Taiwan 88.04.20 88.04.20 Taiwan 93.03.31 Taiwan 89.03.29 89.03.29 Netherlands 97.01.03 Samoa 85.11.01 Vietnam 88.05.13 88.05.13 Islands Virgin British 78.11.10 78.11.10 Taiwan 91.03.22 91.03.22 China 102.03.15 102.03.15 Singapore 100.09.21 100.09.21 100.07.19 DATE OF DATE ESTABLISHMENT INC. INC. CO.,LTD. CO.,LTD. K) LIMITED( LIMITED( K) NAME OF CORPORATION CORPORATION OF NAME (2)Basic Data of Affiliated Enterprises Enterprises of Affiliated Data (2)Basic INTERNATIONAL ASUS COMPUTER INCORPORATION ASUS TECHNOLOGY INC. MICROSYSTEMS AXUS B.V. HOLLAND ASUS LTD. PTE. GLOBAL ASUS CORP. CAPITAL VENTURE HUA-CHENG LTD. CO., INVESTMENT HUA-MIN INTERNATIONAL SHINEWAVE LTD. CO., (SUZHOU) EMES INTERNATIONAL UNITED LTD. (TAIWAN) TECHNOLOGY CO., TECHNOLOGY UNITED INTERNATIONAL CO.,LTD. INC. TECHNOLOGY ASMEDIA CORP. INVESTMENT EXTEND GREAT CORP. COMPUTER ASKEY CORP. INTERNATIONAL ASKEY CORP. INTERNATIONAL DYNALINK INTERNATIONAL MAGIC LIMITED COMPANY (VIETNAM) ASKEY (H ACCESS WISE SAS SILIGENCE CORP. INTERNATIONAL MAGICOM

123 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 eripheral eripheral spare p eripherals business eripherals p Selling communication peripherals products and computer products communication about consulting and Selling products communication and selling Developing Designing and selling computer peripheral and smart vacuums investment business peripherals Computer investment business peripherals Computer Selling communication peripherals products and computer products communication and selling Manufacturing products communication Selling Manufacturing and selling computer Manufacturing and selling communication products products communication and selling Manufacturing Manufacturing and selling communication products products communication and selling Manufacturing vacuums Manufacturing smart and computers industrial and selling Manufacturing peripherals computer and computers industrial and selling Manufacturing peripherals computer Industrial computer and computers investment parts parts Manufacturing and selling communication products products communication and selling Manufacturing vacuums smart Selling peripherals andcomputer selling Manufacturing Selling communication peripherals products and computer investment business peripherals Computer - 298 1,490 4,109 1,490 29,805 72,325 93,309 73,832 18,375 33,582 122,139 300,000 402,384 263,085 960,000 146,045 437,283 746,615 335,919 3,406,543

124 ADDRESS ADDRESS CAPITAL ITEMS / PRODUCTION BUSINESS MAJOR China China China Taiwan USA Islands Virgin British 10 10 Islands Virgin British 98.06.06 98.06.06 Taiwan 95.03.30 95.03.30 China 94.01. 95.03.30 Islands Virgin British 98.11.11 98.11.11 Kong Hong 99.12.01 99.12.01 84.06.06 86.11.21 90.08.30 90.08.30 China 99.01.18 China 92.07.01 92.07.01 China 96.12.26 China 98.06.03 Samoa 94.12.21 94.12.21 Islands Virgin British 94.11.24 Taiwan 93.03.12 93.03.12 93.09.02 Mauritius Mauritius 96.04.27 China 102.04.11 102.04.11 Germany 101.09.27 101.09.27 101.07.30 DATE OF DATE ESTABLISHMENT LTD. LTD. LIMITED LIMITED NAME OF CORPORATION CORPORATION OF NAME OPENBASE LIMITED LIMITED OPENBASE CO.,LTD. PROFIT LEADING LTD. INTERNATIONAL LEADER UNI GMBH COMMUNICATION ASKEY LTD. (SHANGHAI) TECHNOLOGY ASKEY LTD. (JIANGSU) TECHNOLOGY ASKEY LTD (SUZHOU) TECHNOLOGY ASON LTD. (SUZHOU) TECHNOLOGY ASHINE CORP. (WUJIANG) MAGICXPRESS ASKEY CORPORATION TECHNOLOGY AGAIT LTD. HOLDING AGAITECH CORPORATION (H.K.) TECHNOLOGY AGAIT LIMITED LIMITED (SHENZHEN) TECHNOLOGY AGAIT AGAIT INTELLIGENT TECHNOLOGY (SHENZHEN) LIMITED CO. INC. ENERTRONIX, D LIMITE INTERNATIONAL ENERTRONIX HOLDING ENERTRONIX (HUIZHOU) ENERTRONIX INC. TECHNOLOGY AAEON INC. ELECTRONICS, AAEON INC. DEVELOPMENT, AAEON

124 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 eripherals business eripherals p and technical support Industrial computers and adapters business investment investment business adapters and computers Industrial Manufacturing and selling industrial peripherals computer computers and Manufacturing and selling industrial peripherals computer computers and Industrial computer and computers investment Manufacturing and selling industrial peripherals computer computers and Manufacturing and selling industrial peripherals computer computers and Manufacturing and selling industrial peripherals computer computers and Manufacturing and selling industrial peripherals computer computers and Manufacturing and selling industrial adapters computers and circuits integrated developing Designing and circuits integrated selling and developing Designing, Selling integrated circuits and investing business support consulting in technical circuits integrated selling and developing Designing, Selling integrated consulting circuits service e-commerce about and consulting Selling service commerce Investing in service e-commerce about and consulting Selling service e-commerce about and consulting Selling investment business peripherals Computer business investment 3C investment business solutions Cloud - 528 4,109 1,233 4,109 8,552 7,451 7,409 96,600 10,985 29,805 22,801 72,275 39,726 291,468 150,000 354,608 901,669 200,000 300,000 691,278

125 ADDRESS ADDRESS CAPITAL ITEMS / PRODUCTION BUSINESS MAJOR British Virgin Islands Islands Virgin British Netherlands Germany Taiwan Taiwan Singapore USA Netherlands China Taiwan Taiwan Kong Hong Taiwan China Taiwan Singapore Luxembourg China Islands Cayman Islands Virgin British Islands Virgin British 90.09.11 90.09.11 94.03.04 96.10.23 98.06.06 99.02.02 93.03.30 90.11.01 94.12.23 97.11.25 89.03.24 88.09.20 89.02.03 93.02.17 100.10.27 100.10.27 101.05.16 100.05.09 100.10.27 100.09.05 101.12.14 102.12.03 102.01.17 DATE OF DATE ESTABLISHMENT NAME OF CORPORATION CORPORATION OF NAME AAEON TECHNOLOGY CO., LTD. LTD. CO., TECHNOLOGY AAEON B.V. (EUROPE) TECHNOLOGY AAEON GMBH TECHNOLOGY AAEON LTD. CO., INVESTMENT AAEON INC. HEALTHCARE ONYX LTD. PTE. SINGAPORE TECHNOLOGY AAEON INC. USA, HEALTHCARE ONYX B.V. EUROPE HEALTHCARE ONYX INC. (SUZHOU) TECHNOLOGY AAEON CORP. SEMICONDUCTOR UPI CORP. SEMICONDUCTOR UBIQ LTD. (HK) CORPORATION SEMICONDUCTOR UPI CORP. SEMICONDUCTOR NOVELTEK CORPORATION UPI-SEMICONDUCTOR LTD. (SHENZHEN) CORPORATION ASUS CLOUD LTD. PTE. SINGAPORE ASUS CLOUD R.L S.A (LUXEMBOURG) CLOUD ASUS INFORMATION (TIANJIN) ASUS CLOUD LTD. CO., TECHNOLOGY HOLDINGS LIMITED ASUSTEK LIMITED ASIA CENTRAL TEC LIMITED COMPANY HOLDING WAVEFACE

125 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ucts marketing in Czech Republic Republic Czech in ucts marketing ring 3C products in Europe Europe in products 3C ring Developing cloud solutions solutions cloud Developing Australia in products 3C Repairing Australia in products marketing 3C in Brazil products 3C Selling Automotive Automotive electronics business investment and computer peripherals and Netherlands, Belgium in products marketing 3C Luxembourg 2 Egypt in products marketing 3C 299prod 3C 495 Polska in products marketing 3C 472 Singapore in products 3C Repairing 4,058 Dubai in repairing and products marketing 3C 8,053 Repai 1,233 Spain in products marketing 3C 1,972 Italy in products marketing 3C 2,464 UK in products marketing 3C 4,355 France in products marketing 3C 9,305 2,054 1,808 Vietnam in products 3C Repairing 1,921 Kong Hong in repairing and marketing products 3C 97,217 India in repairing and products marketing 3C 10,504 Germany in products marketing 3C 50,531 Korea South in repairing and products marketing 3C 15,408 products 3C Selling 58,045 in Japan products 3C Selling 25,257 35,483 Indonesia in products 3C Repairing 340,433 investment business peripherals Computer 159,160 193,733 1,323,921 products 3C Selling 1,396,426

126 ADDRESS ADDRESS CAPITAL ITEMS / PRODUCTION BUSINESS MAJOR onesia onesia Taiwan Taiwan Australia Australia Brazil 30 30 Islands Virgin British 895,134 investment business 3C .02.15 .02.15 Republic Czech 94.04.26 94.04.26 Singapore 96.10.22 96.10.22 Dubai 95.09.13 India 97.09.11 97.09.11 Egypt 95.04.03 UK 89.07.21 89.07.21 93.05.19 Italy Spain 99 95.02.21 95.02.21 Netherlands 95.07.01 Kore 94.07.31 94.07.31 Polska 80.06.19 80.06.19 Germany 91.03.08 91.03.08 Islands Cayman 94.03. 2,674,404 business peripheral investment computer 3C and 91.07.12 France 94.11.25 Kong Hong 96.03.06 Netherlands 94.10.31 Republic Czech 91.01.23 91.01.23 Islands Virgin British 96.02.15 Islands Cayman 96.03.01 96.03.01 Vietnam 97.05.28 97.05.28 Japan 92.10.21 92.10.21 Singapore 102.05.21 102.05.21 Ind 100.07.27 100.07.27 100.02.10 100.01.05 100.01.05 DATE OF DATE ESTABLISHMENT O. O. E COMERCIO LTDA. LTDA. COMERCIO E NAME OF CORPORATION CORPORATION OF NAME WAVEFACE INC. INC. WAVEFACE LTD. INTERNATIONAL ASUS LTD. DELIGHT DEEP LIMITED PILOT CHANNEL LIMITED HOLDINGS UNIMAX LIMITED PTE. ASUS TECHNOLOGY FZCO EAST ASUS MIDDLE L.L.C. ASUS EGYPT LTD. PTE. INDONESIA SERVICE ASUS GMBH ASUS COMPUTER B.V. BENELUX COMPUTER ASUS SARL FRANCE ASUS LIMITED (UK) ASUSTEK LIMITED KONG) (HONG ASUS TECHNOLOGY LTD. CO., KOREA ASUS LTD. PTE. (S) COMPUTER ASUSTEK SP.Z.O.O. POLSKA ASUS LIMITED PRIVATE ASUS TECHNOLOGY B.V. HOLLAND ASUS TECHNOLOGY CO.,LTD. (VIETNAM) ASUS TECHNOLOGY S.R.L. ITALY ASUSTEK S.L. IBERICA, ASUS INCORPORATION ASUS JAPAN S.R. REPUBLIC CZECH COMPUTER ASUS S.R.O. SERVICE ASUS CZECH LIMITED PTY AUSTRALIA SERVICE ASUS LIMITED PTY AUSTRALIA ASUS ACBZ IMPORTACAO

126 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Repairing 3C products products 3C Repairing Selling 3C products in India India in products 3C Selling Manufacturing and selling autotronics and computer and computer autotronics and selling Manufacturing peripherals products 3C developing Researching and in China products 3C Selling estate real Leasing 11 Peru in products marketing 3C 388 Israel in products marketing 3C 294 Mexico in products marketing 3C 492 1,233 Portugal in products marketing 3C 1,695 Hungary in repairing and products marketing 3C 11,385 Switzerland in products marketing 3C 80,467 88,303 in Mexico products 3C Selling 213,308 326,611 in China products 3C Selling 161,752 1,549,174 1,565,039

127 ADDRESS ADDRESS CAPITAL ITEMS / PRODUCTION BUSINESS MAJOR India India fund up to December 31, 2009. 31, up to December fund any out transferred had not ASUSTeK however, 2002; in WESTERN A 89.06.09 89.06.09 China 89.06.30 89.06.30 97.03.12 China China 96.05.10 96.05.10 Hungary 96.04.17 Taiwan 98.05.10 98.05.10 Switzerland 102.04.25 102.04.25 Peru 101.03.12 101.03.12 Israel 100.07.05 100.07.05 102.03.27 102.03.27 102.04.22 Mexico Mexico 102.12.06 102.12.06 China DATE OF DATE ESTABLISHMENT NAME OF CORPORATION CORPORATION OF NAME Note 2: The paid-in capital involved foreign currency was exchanged under foreign exchange rate. exchange foreign under exchanged was currency foreign involved capital paid-in 2: The Note Note 1: ASUSTeK had International United Co., Ltd. setup in SAMO setup Ltd. Co., United had International ASUSTeK 1: Note ASUS INDIA PRIVATE LIMITED LIMITED PRIVATE INDIA ASUS LTD (TECHNOLOGY) ISRAEL ASUS S.A.C. PERU ASUS V. C. DE A. S. MEXICO, HOLDINGS ASUS V. C. DE A. S. ASUS MEXICO, LIABILITY LIMITED SERVICES HUNGARY ASUS COMPANY LDA. UNIPESSOAL SOCIEDADE PORTUGAL, ASUS GMBH SWITZERLAND ASUS 97.05.21 INC. ELECTRONICS UNIMAX LTD. CO. (SHANGHAI) ASUSTEK COMPUTER Portugal LTD. CO., (SHANGHAI) ASUS COMPUTER CO., LTD. (SUZHOU) TECHNOLOGY ASUS LTD. CO., (CHONGQING) COMPUTER ASUSTEK LTD. CO., (SUZHOU) INVESTMENTS ASUS 100.05.09 China

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(5) Directors, Supervisors and Presidents of Affiliated Enterprises As of Dec 31, 2013 SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonathan Tsangȑ 19,000,000 100.00% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ ɡ ɡ ASUS TECHNOLOGY INC. Director & President ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Sandy Weiȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Lin, Cheng-kuei*ȑ 693,304,205 100.00% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ ɡ ɡ ASKEY COMPUTER CORP Director & President ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Mark Leeȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ 40,238,437 100.00% Director & President ASUSTEK COMPUTER INC.ȐRepresentative: T.C. Chenȑ ɡ ɡ ENERTRONIX, INC. Director ASUSTEK COMPUTER INC.ȐRepresentative: S.Y. Shianȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Mark Leeȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ 30,000,000 100.00% AGAIT TECHNOLOGY Director & President ASUSTEK COMPUTER INC.ȐRepresentative: T.C. Chenȑ ɡ ɡ CORPORATION Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Mark Leeȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 114,500,000 100.00% HUA-CHENG VENTURE Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonathan Tsangȑ ɡ ɡ CAPITAL CORP. Director ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: David Changȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 68,000,000 100.00% HUA-MIN INVESTMENT Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonathan Tsangȑ ɡ ɡ CO., LTD. Director ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: David Changȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 10,045,980 84.99% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonathan Tsangȑ ɡ ɡ AXUS MICROSYSTEMS INC. Director ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ ɡ ɡ Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Sandy Weiȑ 1,000 0.01% President Jeffery Wang 393,999 3.33% Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Eric Chenȑ 25,027,789 83.43% Director ASUSTEK COMPUTER INC.ȐRepresentative: Lin, Tom-Wkȑ ɡ ɡ Director ASUSTEK COMPUTER INC.ȐRepresentative: Samson Huȑ ɡ ɡ ASUS CLOUD CORPORATION Director Chu, Chung-Yuan* 2,971,428 9.90% Director & President Wu, Han-Chang* 428,583 1.43% Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Alan Hsiehȑ ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ 24,748,727 43.89% Director & President ASUSTEK COMPUTER INC.ȐRepresentative: Chewei Linȑ ɡ ɡ Director Ted Hsu ɡ ɡ Director Hsu, Chin-Chuan* ɡ ɡ Independent director Chan, Hung-Chih* ɡ ɡ ASMEDIA TECHNOLOGY INC. Independent director Hsieh, Chieh- Ping* ɡ ɡ Independent director Wu, Ching-Chi ɡ ɡ Supervisor Yi-Li Investment*.ȐRepresentative: Tsai, Hsiao-Chenȑ 518,400 0.92% Supervisor Liang, Chi-Yen* ɡ ɡ Supervisor Lo, Wen-Yi ɡ ɡ Chairman RUI HAI INVESTMENT CO., LTD. 5,424,000 5.60% ȐRepresentative: Chuang, Yung-Shunȑ Director RUI HAI INVESTMENT CO., LTD. ɡ ɡ AAEON TECHNOLOGY INC. ȐRepresentative: Lee Ing-Jenȑ Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 45,120,000 47.00% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonathan Tsangȑ ɡ ɡ Director ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ ɡ ɡ

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SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % Supervisor Hua-Cheng Venture Capital Corp.ȐRepresentative: Mark Leeȑ 8,640,000 9.00% Supervisor FU YANG INVESTMENT LIMITED 336,000 0.35% ȐRepresentative: Yan, Cheng-Liȑ President Steve Hsu 700,000 0.73% Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ 11,402,092 56.73% Director & President ASUSTEK COMPUTER INC.ȐRepresentative: Daniel Lanȑ ɡ ɡ INTERNATIONAL UNITED Director HUA ENG WIRE & CABLE CO.,LTD. ȐRepresentative: MS Lin*ȑ 1,917,194 9.54% TECHNOLOGY CO., LTD. Supervisor ASUSTEK COMPUTER INC.ȐRepresentative: Mark Leeȑ ɡ ɡ Supervisor Absent Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jerry Shenȑ 33,812,819 37.65% Director ASUSTEK COMPUTER INC.ȐRepresentative: S.Y. Shianȑ ɡ ɡ Director ASUSTEK COMPUTER INC.ȐRepresentative: Mark Leeȑ ɡ ɡ Director ASUSTEK COMPUTER INC.ȐRepresentative: Huang, Nung-Che*ȑ ɡ ɡ Director Fu-Yang Investment Ltd.ȐRepresentative: Chu, Hsien-Kuo*ȑ 2,299,333 2.55% UPI SEMICONDUCTOR CORP. Director Lin, Chin-Hung* ɡ ɡ Director & President Chang, Tien-Chien* 874,479 0.97% Supervisor HUA-CHENG VENTURE CAPITAL CORP. 8,601,500 9.58% ȐRepresentative: Francy Jengȑ Supervisor Shen, Hung-Che* ɡ ɡ Chairman ASUSTEK COMPUTER INC.ȐRepresentative: H.C. Hungȑ 5,468,750 50.99% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ ɡ ɡ SHINEWAVE INTERNATIONAL INC. Director & President ASUSTEK COMPUTER INC.ȐRepresentative: Yu, Chun-Hua*ȑ ɡ ɡ Supervisor Hua-Cheng Venture Capital Corp. ȐRepresentative: Mark Leeȑ 1,000 0.01% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 50,000 100.00% Director ASUSTEK COMPUTER INC.ȐRepresentative: Jackie Hsuȑ ɡ ɡ ASUS COMPUTER INTERNATIONAL Director ASUSTEK COMPUTER INC.ȐRepresentative: Eric Chenȑ ɡ ɡ President Steve Chang ɡ ɡ ASUS HOLLAND B.V. Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 3,000,000 100.00% ASUS INTERNATIONAL LTD Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 89,730,042 100.00% ASUSTEK HOLDINGS LIMITED Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonney Shihȑ 20,452,104 100.00% Chairman ASUSTEK COMPUTER INC.ȐRepresentative: Jonathan Tsangȑ 280,000,000 100.00% ASUS GLOBAL PTE LTD. Director ASUSTEK COMPUTER INC.ȐRepresentative: Benson Linȑ ɡ ɡ Director ASUSTEK COMPUTER INC.ȐRepresentative: Ngalimin Darwinȑ ɡ ɡ CENTRAL TEC ASIA LIMITED Chairman ASUSTEK HOLDINGS LIMITEDȐRepresentativeǺJonney Shihȑ 2,120,000 100.00% (Liquidated) DEEP DELIGHT LTD Chairman ASUS INTERNATIONAL LIMITEDȐRepresentative: Jonney Shihȑ 11,422,000 100.00% CHANNEL PILOT LTD. Chairman ASUS INTERNATIONAL LIMITEDȐRepresentative: Jonney Shihȑ 30,033,000 100.00% Chairman CHANNEL PILOT LTD. ȐRepresentative: Jonathan Tsangȑ 44,419,424 100.00% ASUS TECHNOLOGY PTE. Director CHANNEL PILOT LTD. ȐRepresentative: Benson Linȑ ɡ ɡ LIMITED Director CHANNEL PILOT LTD. ȐRepresentative: Ngalimin Darwinȑ ɡ ɡ Director CHANNEL PILOT LTD.ȐRepresentative: Yu,Chien-Liangȑ ɡ 0.07% ASUS EGYPT L.L.C. Director ASUS TECHNOLOGY PTE. LIMITED ɡ 99.93% ȐRepresentative: Yu,Chien-Liangȑ Chairman ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Jonathan Tsangȑ 4 80.00% ASUS MIDDLE EAST FZCO Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Benson Linȑ ɡ ɡ Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Yu, Chien-Liangȑ ɡ ɡ ASUS COMPUTER (SHANGHAI) ASUS TECHNOLOGY PTE LTD. Chairman ɡ 100.00% CO., LTD. ȐRepresentative: Wu, Ming-Lungȑ ASUS TECHNOLOGY (HONG Chairman ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Jonathan Tsangȑ 50,000 100.00% KONG) LIMITED Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Benson Linȑ ɡ ɡ ASUSTEK COMPUTER ASUS TECHNOLOGY PTE LTD. Chairman ɡ 100.00% (SHANGHAI) CO. LTD. ȐRepresentative: Shih, Wen-Hungȑ ASUS TECHNOLOGY ASUS TECHNOLOGY PTE LTD. Director ɡ 100.00% (SUZHOU) CO., LTD. ȐRepresentative: Kao, Chih-Yuanȑ

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SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % ASUSTEK COMPUTER Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Ernest Keȑ ɡ 100.00% (CHONGQING) CO., LTD. ASUS INVESTMENTS (SUZHOU) ASUS Technology (Suzhou) Co. Ltd. Director ɡ 100.00% CO., LTD. ȐRepresentativeǺKao, Chih-Yuanȑ

ASUS COMPUTER GMBH Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Eric Chenȑ ɡ 100.00%

ASUS COMPUTER BENELUX ASUS TECHNOLOGY PTE LTD. Director ɡ 100.00% B.V. ȐRepresentative: Ou, Chang-Chuȑ Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Hung, Wen-Chiȑ 5,300 100.00% ASUS FRANCE SARL Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Li, Yu-Linȑ ɡ ɡ ASUSTEK (UK) LIMITED Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Yeh, Ju-Anȑ 50,000 100.00% Chairman ASUS TECHNOLOGY PTE LTD. 358,433 100.00% ȐRepresentative: Tu, Chi-Yuȑ Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ȐRepresentative: Benson Linȑ ASUS KOREA CO., LTD. Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ȐRepresentative: Wang, Shiang-Hueiȑ Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ȐRepresentative: Su, Shiow-Linȑ ASUSTEK COMPUTER (S) PTE, ASUS TECHNOLOGY PTE LTD. Director 20,002 100.00% LTD. ȐRepresentative: Wu, Chih-Lingȑ ASUS TECHNOLOGY PTE LTD. ASUS POLSKA SP. Z O.O. Director 1,000 100.00% ȐRepresentative: Ou, Chang-Chuȑ ASUS TECHNOLOGY PTE LTD. 20,134,400 100.00% Chairman ȐRepresentative: Jonathan Tsangȑ

ASUS TECHNOLOGY PTE LTD. ɡ ɡ Director ASUS TECHNOLOGY PRIVATE ȐRepresentative: Ngalimin Darwinȑ

LIMITED ASUS TECHNOLOGY PTE LTD. ɡ ɡ Director ȐRepresentative: Su, Hsin-Weiȑ

ASUS TECHNOLOGY PTE LTD. ɡ ɡ Director ȐRepresentative: Ou, Chang-Chuȑ ASUS TECHNOLOGY HOLLAND ASUS TECHNOLOGY PTE LTD. 375,000 100.00% Director B.V. ȐRepresentative: Jonathan Tsangȑ ASUS TECHNOLOGY ASUS TECHNOLOGY PTE LTD. Director ɡ 100.00% (VIETNAM) CO., LTD. ȐRepresentative: Lo, Shih-Chengȑ ASUS TECHNOLOGY PTE LTD. ASUSTEK ITALY S.R.L. Director ɡ 100.00% ȐRepresentative: Ou, Chang-Chuȑ ASUS TECHNOLOGY PTE LTD. ASUS IBERICA S.L. Director 3,000 100.00% ȐRepresentative: Ou, Chang-Chuȑ ASUS JAPAN INCORPORATION Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Emili Luȑ 20,500 100.00% Director ASUS TECHNOLOGY PTE LTD. ɡ 100.00% ASUS COMPUTER CZECH ȐRepresentative: Hsieh, Hsiao-Minȑ REPUBLIC S.R.O. Director ASUS TECHNOLOGY PTE LTD.ȐRepresentativeǺSteve Changȑ ɡ ɡ Director ASUS TECHNOLOGY PTE LTD. ɡ 99.59% ASUS CZECH SERVICE S. R. O. ȐRepresentative: Wu, Ming-Lungȑ Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Huang, Hsin-Weiȑ ɡ ɡ Director ASUS TECHNOLOGY PTE LTD. 950,000 100.00% ȐRepresentative: Huang, Chun-Yungȑ ASUS SERVICE AUSTRALIA Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ PTY LIMITED ȐRepresentative: Tsai, Hsiao-Mingȑ Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ȐRepresentative: Lin, Chih-Yuanȑ

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SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % Director ASUS TECHNOLOGY PTE LTD. 350,000 100.00% ȐRepresentative: Jackie Hsuȑ ASUS AUSTRALIA PTY LIMITED Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ȐRepresentative: Tsai, Hsiao-Mingȑ Director ASUS TECHNOLOGY PTE LTD. 33,500,000 100.00% ȐRepresentative: Tung, Chi-Chunȑ Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ASUS INDIA PRIVATE LIMITED ȐRepresentative: Chang, Chi-Chunȑ Director ASUS TECHNOLOGY PTE LTD. ɡ ɡ ȐRepresentative: Huang, Sheng-Huiȑ ASUS ISRAEL (TECHNOLOGY) Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Ethan Sunȑ ɡ 100.00% LTD ASUS SERVICE INDONESIA PTE. ASUS TECHNOLOGY PTE LTD. Director 1,485,000 99.00% LTD. ȐRepresentative: Wu, Ming-Lungȑ Director ASUS TECHNOLOGY PTE LTD. 110,362,284 99.99% ACBZ IMPORTACAO E ȐRepresentative: Wu, Ming-Tauȑ COMERCIO LTDA. Director ASUS TECHNOLOGY HOLLAND B.V. 7,716 0.01% ȐRepresentative: Wu, Ming-Tauȑ Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: James Lauȑ 990 99.00% ASUS PERU S.A.C. Director ASUS TECHNOLOGY HOLLAND B.V. 10 1.00% (ȐRepresentative: James Laiȑ Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Lun Hsiaoȑ 50,608 99.00% ASUS HOLDINGS MEXICO, Director ASUS TECHNOLOGY HOLLAND B.V. 512 1.00% S.A. DE C.V. ȐRepresentative: Lun Hsiaoȑ Director ASUS TECHNOLOGY PTE LTD.ȐRepresentative: Lun Hsiaoȑ 130 99.00% ASUS MEXICO, S.A. DE C.V. Director ASUS TECHNOLOGY HOLLAND B.V. 2 1.00% ȐRepresentative: Lun Hsiaoȑ ASUS HUNGARY SERVICES ASUS TECHNOLOGY HOLLAND B.V. Director ɡ 100.00% LIMITED LIABILITY COMPANY ȐRepresentative: Ou, Chang-Chuȑ ASUS PORTUGAL, SOCIEDADE ASUS TECHNOLOGY HOLLAND B.V. Director 30,000 100.00% UNIPESSOAL LDA ȐRepresentative: Ou, Chang-Chuȑ Director ASUS TECHNOLOGY HOLLAND B.V. 3,400 100.00% ȐRepresentative: Hung, Wei-Chiȑ Director ASUS TECHNOLOGY HOLLAND B.V. ɡ ɡ ȐRepresentative: Su, Hsin-Weiȑ ASUS SWITZERLAND GMBH Director ASUS TECHNOLOGY HOLLAND B.V. ɡ ɡ ȐRepresentative: Ou, Chang-Chuȑ Director ASUS TECHNOLOGY HOLLAND B.V. ɡ ɡ ȐRepresentative: Brauchli, Rudolfȑ ENERTRONIX INTERNATIONAL Chairman ENERTRONIX, INC. (Representative: Jerry Shen) 10,000 100.00% LIMITED ENERTRONIX HOLDING LIMITED Chairman ENERTRONIX, INC. (Representative: Jerry Shen) 11,270,551 100.00% Enertronix (HuiZhou) Co., Ltd. Director ENERTRONIX HOLDINGS LTD(RepresentativeǺT.C.Chen) ɡ 100.00% Chairman SHINEWAVE INTERNATIONAL INC. ɡ 100.00% ȐRepresentative: Yu, Jiunn-Hwa*ȑ Director SHINEWAVE INTERNATIONAL INC. ɡ ɡ ȐRepresentative: Cheng Shu-Fen*ȑ eMES (SHUZHOU) CO., LTD. Director SHINEWAVE INTERNATIONAL INC. ɡ ɡ ȐRepresentative: Chang Chih-Liang*ȑ Supervisor SHINEWAVE INTERNATIONAL INC. ɡ ɡ ȐRepresentative: Mark Leeȑ ASUS INTERNATIONAL LIMITED UNIMAX HOLDINGS LIMITED Director 6,500,000 100.00% ȐRepresentative: Jonney Shihȑ

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SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % Chairman UNIMAX HOLDINGS LIMITEDȐRepresentative: Jonathan Tsangȑ 21,300,000 100.00% Director & President UNIMAX HOLDINGS LIMITEDȐRepresentative: Wu, Chih-Pengȑ ɡ ɡ UNIMAX ELECTRONICS INC. Director UNIMAX HOLDINGS LIMITED ɡ ɡ ȐRepresentative: Chien, Chien-Hsiaoȑ Supervisor UNIMAX HOLDINGS LIMITEDȐRepresentative: Mark Leeȑ ɡ ɡ WAVEFACE HOLDING ASUSTEK HOLDINGS LIMITED Chairman 14,000,000 77.78% COMPANY LIMITED ȐRepresentative: Jonney Shihȑ Chairman WAVEFACE HOLDING COMPANY LIMITED 15,916,000 100.00% ȐRepresentative: Jonney Shihȑ Director WAVEFACE HOLDING COMPANY LIMITED ɡ ɡ WAVEFACE INC. ȐRepresentative: Raymond Chenȑ (be liquidated) Director & President WAVEFACE HOLDING COMPANY LIMITED ɡ ɡ ȐRepresentative: Will Chuangȑ Supervisor WAVEFACE HOLDING COMPANY LIMITED ɡ ɡ ȐRepresentative: Mark Leeȑ AGAIT TECHNOLOGY (H.K.) AGAIT TECHNOLOGY CORPORATION Director 18,820,000 100.00% CORPORATION LIMITED ȐRepresentative: Jerry Shenȑ AGAIT TECHNOLOGY CORPORATION AGAITECH HOLDING LTD. Director 1,000,000 100.00% ȐRepresentative: Jerry Shenȑ AGAIT INTELLIGENT AGAIT TECHNOLOGY (H.K.) CORPORATION LIMITED TECHNOLOGY (SHENZHEN) CO. Director ɡ 100.00% ȐRepresentative: T.C. Chenȑ LIMITED AGAIT TECHNOLOGY AGAITECH HOLDING LTD. Director ɡ 100.00% (SHENZHEN) LIMITED ȐRepresentative: T.C. Chenȑ INTERNATIONAL UNITED INTERNATIONAL UNITED TECHNOLOGY CO., LTD. Director ɡ 100.00% TECHNOLOGY CO., LTD. (RepresentativeǺJerry Shen) GREAT EXTEND INVESTMENT ASMEDIA TECHNOLOGY INC. Director 691,856 100.00% CORP. (Representative: Lin CheWei) Chairman ASUS CLOUD CORPORATION. 1 100.00% ASUS CLOUD SINGAPORE PTE. ȐRepresentative: Wu, Han-Changȑ LTD. Director ASUS CLOUD CORPORATIONȐRepresentative: Darwin Wuȑ ɡ ɡ ASUS CLOUD (LUXEMBOURG) ASUS CLOUD CORPORATION. Director ɡ 100.00% S. A. R. L. ȐRepresentative: Wu, Han-Changȑ Director ASUS CLOUD SINGAPORE PTE. LTD. ɡ 100.00% ASUS CLOUD (TIANJIN) ȐRepresentative: Wu, Han-Changȑ INFORMATION TECHNOLOGY Director ASUS CLOUD CORPORATION. ɡ ɡ CO., LTD. ȐRepresentative: Lin, Tom-Wkȑ Supervisor ASUS CLOUD CORPORATION.ȐRepresentative: Mark Leeȑ ɡr ɡ Chairman AAEON TECHNOLOGY INC. 490,000 100.00% (Representative: Hwang Yuhmin) Director AAEON TECHNOLOGY INC. ɡ ɡ AAEON ELECTRONICS, INC (Representative: Chuang Yung-Shun) Director AAEON TECHNOLOGY INC. (Representative: I.J. Lee) ɡ ɡ Director & President Steve Hsu ɡ ɡ AAEON TECHNOLOGY INC. AAEON DELELOPMENT, INC. Chairman & President 559,822 100.00% (Representative: Chuang, Yung-Shun) AAEON TECHNOLOGY INC. AAEON TECHNOLOGY CO.,LTD. Chairman & President 8,807,097 100.00% (Representative: Chuang, Yung-Shun) AAEON TECHNOLOGY (EUROPE) AAEON TECHNOLOGY INC. Chairman 1,000 100.00% B.V. (Representative: Chuang, Yung-Shun) AAEON TECHNOLOGY INC. AAEON TECHNOLOGY GMBH Chairman 300 100.00% (Representative: Chuang, Yung-Shun) Chairman & President AAEON TECHNOLOGY INC. 15,000,000 100.00% AAEON INVESTMENT CO., LTD. (Representative: Chuang, Yung-Shun) 132 !

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SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % Director AAEON TECHNOLOGY INC. ɡ ɡ (Representative: I.J. Lee) Director AAEON TECHNOLOGY INC. ɡ ɡ (Representative: Wayne Chan) Supervisor AAEON TECHNOLOGY INC. ɡ ɡ (Representative: Yang, Cheng-Li) Chairman & President AAEON TECHNOLOGY INC. 8,211,000 100.00% (Representative: Chuang, Yung-Shun) Director AAEON TECHNOLOGY INC. ɡ ɡ ONYX HEALTHCARE INC. (Representative: Dill Ha) Director AAEON TECHNOLOGY INC. ɡ ɡ (Representative: Steve Hsu) Supervisor AAEON TECHNOLOGY INC. (Representative: Juno Tu) ɡ ɡ AAEON TECHNOLOGY Chairman AAEON DELELOPMENT INC. (Representative: KS Seng) 465,840 100.00% SINGAPORE PTE. LTD. AAEON TECHNOLOGY (SUZHOU) AAEON TECHNOLOGY CO., LTD. Chairman ɡ 100.00% INC. ( (Representative: Chuang, Yung-Shun) ONYX HEALTHCARE INC. ONYX HEALTHCARE USA, INC. Chairman 10,000,000 100.00% (Representative: Chuang, Yung-Shun) ONYX HEALTHCARE EUROPE ONYX HEALTHCARE INC. Chairman 100,000 100.00% B.V. (Representative: Chuang, Yung-Shun) Chairman UPI SEMICONDUCTOR CORP. 20,000,000 100.00% (Representative: Chang Tien-Chien*) Director UPI SEMICONDUCTOR CORP. ɡ ɡ UBIQ SEMICONDUCTOR (Representative: Chiu, Chien-Pang*) CORP. Director UPI SEMICONDUCTOR CORP. ɡ ɡ (Representative: Chang, Huan-Yen*) Supervisor UPI SEMICONDUCTOR CORP. ɡ ɡ (Representative: Yu, Chih-Hsiung*) UPI SEMICONDUCTOR UPI SEMICONDUCTOR CORP. Director 765,000 100.00% CORPORATION (HK) LTD. (Representative: Yu, Chih-Hsiung*) Director UPI SEMICONDUCTOR CORPORATION (HK) LTD. ɡ 100.00% UPI-SEMICONDUCTOR (Representative: Yu, Chih-Hsiung*) CORPORATION (SHENZHEN) Supervisor UPI SEMICONDUCTOR CORPORATION (HK) LTD. ɡ ɡ LTD. (Representative: Chiu, Chien-Pang*) ASKEY COMPUTER CORP. ASKEY INTERNATIONAL CORP. Director 3,700,000 100.00% (Representative: Lin, Cheng-Kuei*) ASKEY COMPUTER CORP. DYNALINK INTERNATIONAL CORP. Director 11,160,172 100.00% (Representative: Lin, Cheng-Kuei*) ASKEY COMPUTER CORP. MAGIC INTERNATIONAL CO., LTD. Director 117,525,738 100.00% (Representative: Lin, Cheng-Kuei*) ASKEY (VIETNAM) COMPANY DYNALINK INTERNATIONAL CORP. Director 2,883,359 100.00% LIMITED (be liquidated) (Representative: Lin, Cheng-Kuei*) DYNALINK INTERNATIONAL CORP. WISE ACCESS (HK) LIMITED Director 1,600,000 100.00% (Representative: Lei, Han-Wen*) Director & Chief SILIGENCE SAS Didier Zwierski 780,000 80.00% Executive Officer MAGIC INTERNATIONAL CO., LTD. MAGICOM INTERNATIONAL CORP. Director 91,030,000 100.00% (Representative: Lin, Cheng-Kuei*) MAGIC INTERNATIONAL CO., LTD. LEADING PROFIT CO., LTD. Director 25,050,000 100.00% (Representative: Lin, Cheng-Kuei*) UNI LEADER INTERNATIONAL MAGIC INTERNATIONAL CO., LTD. Director 50,000 100.00% LTD. (Representative: Lin, Cheng-Kuei*)

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SHAREHOLDING NAME OF CORPORATION TITLE NAME OF PERPRESENTATIVE SHARES % MAGIC INTERNATIONAL CO., LTD. OPENBASE LIMITED Director 50,000 100.00% (Representative: Lin, Cheng-Kuei*) MAGIC INTERNATIONAL CO., LTD. ASKEY COMMUNICATION GMBH Director 100,000 100.00% (Representative: Ou, Ta-Chou*) ASKEY TECHNOLOGY Chairman MAGIC INTERNATIONAL CO., LTD. ɡ 100.00% (SHANGHAI) (Representative: Lin, Cheng-Kuei*) LTD. President Lei, Han-Wen* ɡ ɡ Chairman & Presiden MAGICOM INTERNATIONAL CORP. ɡ 100.00% t (Representative: Lin, Cheng-Kuei*) Director MAGICOM INTERNATIONAL CORP. ɡ ɡ ASKEY TECHNOLOGY (Representative: David Chang) (JIANGSU) LTD. Director MAGICOM INTERNATIONAL CORP. ɡ ɡ (Representative: Mark Lee) Supervisor MAGICOM INTERNATIONAL CORP. ɡ ɡ (Representative: Tina Chu) Chairman & President MAGICOM INTERNATIONAL CORP. ɡ 100.00% (Representative: Lin, Cheng-Kuei*) Director MAGICOM INTERNATIONAL CORP. ɡ ɡ ASHINE TECHNOLOGY (SUZHOU) .(Representative: Christine Wu) LTD. (be liquidated) Director MAGICOM INTERNATIONAL CORP. ɡ ɡ (Representative: Mark Lee) Supervisor MAGICOM INTERNATIONAL CORP. ɡ ɡ (Representative: Tina Chu) MAGICOM INTERNATIONAL CORP. ɡ 100.00% Chairman & President (Representative: Lin Cheng-Kuei*)

MAGICOM INTERNATIONAL CORP. ɡ ɡ Director ASKEY MAGICXPRESS (Representative: Kao, Chung- Ming)

(WUJIANG) CORP. MAGICOM INTERNATIONAL CORP. ɡ ɡ Director (Representative: Chang, Chi-Hsish*)

MAGICOM INTERNATIONAL CORP. ɡ ɡ Supervisor (Representative: Tina Chu) Note: (*) Standards for the English transliteration of company’s name or individual’s name.

134 !

134 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 - PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) - NET (LOSS) (LOSS) INCOME INCOME 285 248 - (157) 17,421 0.15 (147) (100) - (184) 19,891 0.29 - (LOSS) (LOSS) INCOME INCOME In thousand NTD / as of 12/31/2013 OPERATING OPERATING - NET REVENUES REVENUES OPERATING OPERATING 857 - - NET WORTH NET

807 1,498 15,185 135 - 256,546 1,086,211 1,188,983 111,129 86,984 1.54 TOTAL TOTAL LIABILITIES - TOTAL TOTAL ASSETS ASSETS - 55,937 251,404 88,379 163,025 1,699,370 19,108 20,822 - 14,903 30,680,138 31,065,970 (385,832) 80,368,082 233,943 34,381 - 20,621 857 - 190,000 5,614,121 5,035,924 578,197 18,154,737 475,265 417,716 21.99 834,540 73,156,735 70,240,235 2,916,500 107,787,728 1,927,312 2,307,940 - 680,000107,250 729,969 201,600 1,728201,000 28,843 222,346 728,241 172,757 25,546 - 133,637 196,800 2,915 131,551 4,291 (11,284) (7,166) 0.40 (0.36) 1,145,000 1,081,382 3,174 1,078,208 - NAME OF CORPORATION CORPORATION OF NAME CAPITAL 2. Summarized Operation Results of Affiliated Enterprises Enterprises Affiliated Results of Operation 2. Summarized ASUS COMPUTER NTERNATIONAL ASUS TECHNOLOGY INC. ASUS MICROSYSTEMS INC. ASUS HOLLAND B.V. ASUS GLOBAL PTE. LTD. 118,200HUA-CHENG VENTURE CAPITAL CORP. 165,054HUA-MIN INVESTMENT CO., LTD. SHINEWAVE INTERNATIONAL 8,442INC. eMES (SHUZHOU) CO., LTD. 156,612INTERNATIONAL UNITED TECHNOLOGY CO., LTD. INTERNATIONAL UNITED 11,499 51,053TECHNOLOGY CO., LTD. (SAMOA) 20,754ASMEDIA TECHNOLOGY INC. (1,472)GREAT EXTEND INVESTMENT CORP. 563,879 9,765 780ASKEY COMPUTER CORP. 1,342,757 ASKEY INTERNATIONAL CORP. 10,989 110,279 6,933,042 0.07 18,670,426 19,847 2,305 10,551,758 (2,252) 8,118,668 32,928,437 (1,697) 47,334Note 1 96,094 0.14

135 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 - - PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) NET (LOSS) (LOSS) INCOME INCOME (27) 490 Note 1 (63) 1,573 Note 1 (391) (391) - (774) (567) - (223) 10,529 Note 1 (LOSS) (LOSS) INCOME INCOME OPERATING OPERATING 602 (55,938) (55,938) Note 1 649 (9,691) (9,187) Note 1 - NET REVENUES REVENUES OPERATING OPERATING 3,702 - 87,308 23,380 (35,329) (35,233) - NET WORTH NET

18 94,784 - 666 28,903 910 528,257 - 136 - TOTAL TOTAL LIABILITIES - TOTAL TOTAL ASSETS ASSETS 1,490 716,589 574,836 141,753 1,511,917 54,218 54,269 - 1,490 5,584,648 5,574,581 10,067 27,684,529 (17,099) (15,283) - - 40,063 34,181 101,183 (67,002) 71,328 (56,189) (55,901) - 85,939 132,915 58,143 74,772 - 93,309 94,802 332,629 87,308 - 122,139 29,569 437,283 529,167 3,502,855 3,980,145 - 2,713,149 3,980,145 4,584,342 262,573 - 71,053 4,584,342 71,189 3,406,543 200,801 18,158,137 14,248,566 63,190 3,909,571 67,116 33,876,704 - 44,664 50,598 Note 1 NAME OF CORPORATION CORPORATION OF NAME CAPITAL DYNALINK INTERNATIONAL ORP. MAGIC INTERNATIONAL CO., LTD. ASKEY (VIETNAM) COMPANY LIMITED WISE ACCESS (HK) LIMITED SILIGENCE SAS MAGICOM INTERNATIONAL CORP. 40,281OPENBASE LIMITED LEADING PROFIT CO., LTD. 249UNI LEADER INTERNATIONAL LTD. 746,615ASKEY COMMUNICATION MBH 67,002ASKEY TECHNOLOGY 4,045,221(SHANGHAI) LTD. 4,109 (66,753) ASKEY TECHNOLOGY 4,791,417(JIANGSU) LTD. 3,702ASON TECHNOLOGY (SUZHOU) (746,196)LTD. 15,029,055ASHINE TECHNOLOGY - (SUZHOU) LTD. (17,237)ASKEY MAGICXPRESS (WUJIANG) CORP.. (26,542) -

136 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) NET (LOSS) (LOSS) INCOME INCOME 452 19,263 - (26) 1,512 - (74) (62,168) Note 1 (48) (48) - (48) (83,152) - - (1,250) - (LOSS) (LOSS) INCOME INCOME OPERATING OPERATING 94 (10,276) (10,276) (0.69) NET REVENUES REVENUES OPERATING OPERATING 452 - 37,591 - 13,076 - 104,438 1,262,898 27,256 (83,104) Note 1 106,125 - NET WORTH NET

80 109,420 453 2,155,041 2,148,389 143,949 293,424 3.06 137 TOTAL TOTAL LIABILITIES TOTAL TOTAL ASSETS ASSETS 298 452 - 4,109 27,260 6,946 20,314 42,070 1,989 1,714 - 29,805 13,076 - 72,32533,582 8,52873,832 14,921 1,778 13,988 1,848 6,750 7,816 13,073 - 6,172 2,930 (13,471) 20,280 (1,250) (42,838) Note 1 (61,516) Note 1 402,384 462,071 357,493 104,578 1,274,624 (62,728) (149,441) (3.71) 300,000 117,303 33,164 84,139 140,612 (45,659) (100,282)335,919 106,125 (3.34) - 291,468 296,326 4,883 291,443 7,216 NAME OF CORPORATION CORPORATION OF NAME CAPITAL AGAIT TECHNOLOGY CORPORATION AGAITECH HOLDING LTD. AGAIT TECHNOLOGY (H.K.) CORPORATION LIMITED AGAIT TECHNOLOGY (SHENZHEN) LIMITED AGAIT INTELLIGENT TECHNOLOGY (SHENZHEN) CO. LIMITED ENERTRONIX, INC. ENERTRONIX INTERNATIONAL LIMITED ENERTRONIX HOLDING LIMITED ENERTRONIX (HUIZHOU) LTD. AAEON TECHNOLOGY INC. 263,085AAEON ELECTRONICS, INC. AAEON DEVELOPMENT, INC. 546,508 960,000AAEON TECHNOLOGY CO., 146,045LTD. 2,682,494 18,375 442,070 AAEON TECHNOLOGY 482,111(EUROPE) B.V. 527, AAEON TECHNOLOGY GMBH 37,591 276,123AAEON INVESTMENT CO., LTD. - 150,000 1,233 205,988 109,500 13,983 879,222 (57,682) 4,270 (6,699) 9,713 - 41,166 1,131 1,144 -

137 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 - PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) - NET (LOSS) (LOSS) INCOME INCOME 623 1,198 - (241) (33,659) - - (3,335) - - (LOSS) (LOSS) INCOME INCOME OPERATING OPERATING 642 (13,639) (15,685) Note 1 211 (3,272) (3,272) Note 1 NET REVENUES REVENUES OPERATING OPERATING 4,937 4,416 - 39,726 - NET WORTH NET

599 4,131 138 TOTAL TOTAL LIABILITIES TOTAL TOTAL ASSETS ASSETS 4,109 10,203 4,295 5,9088,552 27,203 5,4667,451 1,707 1,182 4,416 9627,409 - - 4,284 4,730 13,981 (2,405) (2,707) Note 1 96,600 285,701 129,198 156,503 583,548 53,449 44,304 4.59 10,985 70,881 31,257 39,62422,801 114,004 72,275 4,937 42,736 - 14,55039,726 28,186 39,726 46,909 - (14,349) (14,273) (2.45) 354,608901,669 392,532 1,110,870 102,953 531,714 289,579 579,156 415,234 1,684,671 (144,164) 31,533 (93,777) 18,776 Note 1 (1.04) 691,278 588,164 1,563 586,601 - NAME OF CORPORATION CORPORATION OF NAME CAPITAL ONYX HEALTHCARE INC. AAEON TECHNOLOGY SINGAPORE PTE. LTD. ONYX HEALTHCARE USA, INC. ONYX HEALTHCARE EUROPE B.V. 29,805AAEON TECHNOLOGY (SUZHOU) INC. 60,369UPI SEMICONDUCTOR CORP UBIQ SEMICONDUCTOR CORP. 34,111UPI SEMICONDUCTOR 200,000CORPORATION (HK) LTD. NOVELTEK EMICONDUCTOR 26,258 454,503CORP. UPI-Semiconductor Corporation 169,616 238,216(Shenzhen) Ltd. ASUS CLOUD CORPORATION (2,271) 216,287ASUS CLOUD SINGAPORE PTE. LTD. 300,000 (2,128)ASUS CLOUD (LUXEMBOURG) 863,715S.A R.L 223,053ASUS CLOUD (TIANJIN) - INFORMATION TECHNOLOGY 28,632CO., LTD. 53,287ASUSTEK HOLDINGS LIMITED 27,864 169,766 1.39 57,643 (72,062) (75,974) (2.53)

138 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) NET (LOSS) (LOSS) INCOME INCOME 173 322 - (67) 7,984,667 - (88) (6,017) - (141) 797 - (913) 7,900,405 - (101) (24,785) - 6,201 7,647 - (26,111) (24,677) (1.52) (LOSS) (LOSS) INCOME INCOME OPERATING OPERATING - NET REVENUES REVENUES OPERATING OPERATING 298 12,390 (195) 293 - 23,612 - 73,443 - - NET WORTH NET

81 68,567 - 865 35,141,448 - 907 12,935 17,403 8,368 7,770 - 139 - TOTAL TOTAL LIABILITIES - TOTAL TOTAL ASSETS ASSETS 2 3,623 3,325 528 73,443 - 472 13,842 4,058 15,574 16,504 (930) 65,539 4,355 64,990 47,441 17,549 246,144 3,130 5,765 - 2,464 44,146 19,927 24,219 234,503 8,695 5,637 - 1,921 20,916 16,725 4,191 131,628 1,563 1,517 Note 1 - 10,504 759,121 662,124 96,997 2,972,093 11,499 13,336 - 50,531 64,682 4,558 60,124 71,128 (4,454) 12,098 35,483 42,949 2,557 40,392 5,876 (1,890) 4,510 159,160 68,648 340,433 288,498 2,406 286,092 - 2,674,404 35,142,313 1,323,921 68,448,380 29,484,444 38,963,936 274,944,391 7,852,588 8,692,523 - NAME OF CORPORATION CORPORATION OF NAME CAPITAL CENTRAL TEC ASIA LIMITED WAVEFACE HOLDING COMPANY LIMITED WAVEFACE INC. ASUS INTERNATIONAL LIMITED DEEP DELIGHT LIMITED CHANNEL PILOT LIMITED UNIMAX HOLDINGS LIMITED ASUS TECHNOLOGY PTE. LIMITED 895,134 193,733ASUS MIDDLE EAST FZCO 34,740,721ASUS EGYPT L. L. C. 23,612ASUS SERVICE INDONESIA PTE. 788,607LTD. 33,952,114 - ASUS COMPUTER GMBH ASUS COMPUTER Benelux B.V. ASUS FRANCE - SARL ASUSTEK (UK) LIMITED 2,054ASUS TECHNOLOGY (HONG KONG) LIMITED 23,290ASUS KOREA CO., LTD. ASUSTEK COMPUTER (S) PTE. LTD. 10,313 12,977 114,960 3,071 3,144 -

139 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) NET (LOSS) (LOSS) INCOME INCOME 398 140 - 536 10,228 - 543 476 - 145 145 - (LOSS) (LOSS) INCOME INCOME OPERATING OPERATING - (223) (226) - NET REVENUES REVENUES OPERATING OPERATING 434 11,935 533 8,441 NET WORTH NET

678 (205) 140 TOTAL TOTAL LIABILITIES 924 669,339 (530,415) 281,111 8,093 (509,360) - TOTAL TOTAL ASSETS ASSETS 11 473 294 15,119 14,685 495 66,430 22,286 44,144 163,179 4,627 3,381 - 299 19,305 9,469 9,836388 78,038 3,814 2,347 3,281 2,188 - 1,233 45,333 16,152 29,181 145,080 4,796 5,107 - 1,972 138, 1,808 14,612 11,073 3,539 71,052 97,21715,408 211,481 6,862,960 12,553 6,824,332 198,928 38,628 102,130 7,756 4,99225,257 129,167 8,918 - 97,713 31,45488,303 185,668 253,105 10,620 177,185 5,328 75,920 - 37,109 (12,367) (12,367) - 1,396,426 6,267,996 5,831,569 436,427 7,924,556 (253,742) (454,341) - NAME OF CORPORATION CORPORATION OF NAME CAPITAL ASUS POLSKA SP. Z O. O. ASUS TECHNOLOGY PRIVATE LIMITED ASUS TECHNOLOGY HOLLAND B. V. ASUS TECHNOLOGY (VIETNAM) CO., LTD. ASUSTEK ITALY S. R. L. ASUS IBERICA S.L. ASUS JAPAN INCORPORATION ASUS COMPUTER CZECH REPUBLIC S. R. O. 58,045ASUS CZECH SERVICE S. R. O. 2,350,212ASUS SERVICE AUSTRALIA PTY LIMITED 2,249,408 8,053ASUS AUSTRALIA PTY LIMITED ACBZ IMPORTACAO E 100,804COMERCIO LTDA. 96,148 9,305ASUS INDIA PRIVATE 12,356,264 LIMITED ASUS ISRAEL (TECHNOLOGY) 41,000 42,237 161,752LTD. 76,896ASUS PERU S. A. C. 1,218,086 23,517ASUS HOLDINGS MEXICO, S. A. 53,911 84,878DE C. V. 1,074,171ASUS MEXICO, S. A. DE C. V. 564,368 17,483 - 143,915 231,913 2,175,289 18,660 18,573 12,112 36,014 - 10,300 8,264 - -

140 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 PER PER (LOSS) (LOSS) EARNING EARNING SHARE(NTD) SHARE(NTD) NET (LOSS) (LOSS) INCOME INCOME (4) (4) Note 1 (LOSS) (LOSS) INCOME INCOME OPERATING OPERATING - NET REVENUES REVENUES OPERATING OPERATING 487 NET WORTH NET 3 (3,959,269) 68,736,936 (63,718) (46,657) (0.00) 5

141 TOTAL TOTAL LIABILITIES 2 5,463 17,709 51,673 1,573 1,912 - TOTAL TOTAL ASSETS ASSETS 492 492 1,6951,233 12,738 14,633 3,846 7,309 8,892 7,324 33,680 49,428 2,229 1,713 1,270 1,059 - - 80,467 80,834 14,101 66,733 189,621 1,053 383 Note 1

326,611 24,416,754 28,376,023 (3,959,269) 68,736,936 (63,718) (46,657) Note 1 1,549,174 2,362,5721,565,039 6,239,237 267,815 3,940,390 2,094,757 2,298,847 1,604,734 10,325,724 103,721 (50,397) 120,317 758,016 Note 1 Note 1 NAME OF CORPORATION CORPORATION OF NAME CAPITAL ASUS HUNGARY SERVICES LIMITED LIABILITY COMPANY ASUS PORTUGAL, SOCIEDADE UNIPESSOAL LDA. ASUS SWITZERLAND GMBH UNIMAX ELECTRONICS INC. ASUSTEK COMPUTER (SHANGHAI) 11,385 CO. LTD. 326,611ASUS COMPUTER (SHANGHAI) 24,416,754CO., LTD. 23,17 28,376,02 ASUS TECHNOLOGY (SUZHOU) CO., LTD. ASUSTEK COMPUTER (CHONGQING) CO., LTD. ASUS INVESTMENTS (SUZHOU) CO., LTD. Note 1: It’snot appliedcompany to limited.

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ASUSTeK Computer Inc. Declaration of Internal Control

Date: March 27, 2014

The internal control system in 2013 is with the following declarations made in accordance with the self-inspection conducted:

1. We understand it is the responsibility of the company’s management to have internal control system established, enforced, and maintained. The company has the internal control system established to provide a reasonable assurance for the realization of operating effect and efficiency (including profits, performance, and assets safety), the reliability of financial report, and the obedience of relevant regulations.

2. Internal control system is designed with limitations; therefore, no matter how perfect it is designed, an effective internal control system is to ensure the realization of the aforementioned three objectives. Due to the change of environment and condition, the effectiveness of an internal control system could change at any time. Our internal control system is designed with self-monitoring mechanism; therefore, we are able to have corrective actions initiated upon identifying any nonconformity.

3. We have based on the internal control criteria of “Governing Rules for handling internal control system by public offering companies” (referred to as “the Governing Rules” hereinafter) to determine the effectiveness of internal control design and enforcement. The internal control criteria of the “Governing Rules” is the management control process and with the internal control divided into five elements: 1. Environment control, 2. Risk analysis, 3. Control process, 4. Information and communication, and 5. Supervision. Each element is subdivided into several items. Please refer to the “Governing Rules” for the details of the said items.

4. We have based on the aforementioned internal control criteria to inspect the effectiveness of internal control design and enforcement.

5. We believe that our audits provide a reasonable basis for our opinion. On December 31, 2013, those standards require that we plan and perform the audit to obtain reasonable assurance about whether the internal control system (including the supervision and management over the subsidiaries) including the fulfillment of business performance and efficiency, the reliability of financial statements and the obedience of governing regulations, and the design and enforcement of internal control system is free of material misstatement and is able to ensure the realization of the aforementioned objectives.

6. The Declaration of Internal Control is the content of our annual report and prospectus for the information of the public. For any forgery and concealment of the aforementioned information to the public, we will be held responsible by law in accordance with Securities Transaction Regulation No. 20, No. 32, No. 171, and NO. 174.

7. We hereby declared that the Declaration of Internal Control was approved by the Board of Directors on March 27, 2014 unanimously by the directors at the meeting

ASUSTeK Computer Inc.

Chairman: Jonney Shih

President: Jerry Shen

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Independent Auditors’ Report

To the Board of Directors and Shareholders of

ASUSTEK COMPUTER INC.:

We have audited the accompanying separate balance sheets of ASUSTEK COMPUTER INC. as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related separate statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2013 and 2012. These separate financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these separate financial statements based on our audits. We did not audit the financial statements of certain investments accounted for under equity method. These investments accounted for under equity method amounted to $548,589,000, $23,582,389,000 and $22,828,599,000, constituting 0.25%, 11.37% and 12.63% of total assets as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively, the investments with credit balances amounted to $385,832,000, $409,559,000 and $793,962,000, constituting 0.45%, 0.50% and 1.20% of total liabilities as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively, and other comprehensive income of subsidiaries, associates and joint ventures accounted for under equity method amounted to $1,140,198,000 and $1,294,233,000, constituting 4.41% and 5.87% of total other comprehensive income for the years ended December 31, 2013 and 2012, respectively. The financial statements of these investments accounted for under equity method were audited by other auditors whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included in the separate financial statements and information disclosed relative to these investments, is based solely on the reports of other auditors.

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 rules and standards require that we plan and perform the audit to obtain reasonable assurance 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 by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.

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In our opinion, based on our audits and the reports of other auditors, the separate financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of ASUSTEK COMPUTER INC. as of December 31, 2013, December 31, 2012 and January 1, 2012, and the financial performance and its cash flows for the years ended December 31, 2013 and 2012, in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

PricewaterhouseCoopers, Taiwan March 27, 2014

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 in countries and jurisdiction other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such separate 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 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 separate financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ASUSTEK COMPUTER INC. SEPARATE BALANCE SHEETS DECEMBER 31, 2013, DECEMBER 31, 2012 AND JANUARY 1, 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

December 31, 2013 December 31, 2012 January 1, 2012 ASSETS Notes AMOUNT % AMOUNT % AMOUNT %

Current assets

Cash and cash equivalents 6(1) $ 24,262,821 11 $ 21,720,717 11 $ 16,608,239 9

Financial assets at fair value 6(2) 7,537,906 4 7,708,965 4 9,737,303 5

through profit or loss - current

Available-for-sale financial assets 6(3) 206,979 - 307,471 - 274,792 -

- current

Trades receivable 6(5) 4,490,421 2 2,903,549 1 2,669,758 2

Notes and trades receivable - 6(5) and 7 65,423,038 30 66,997,393 32 52,847,656 29

related parties

Other receivables 19,012 - 20,838 - 8,251,210 5

Inventories 6(6) 25,149,406 11 27,735,987 13 20,149,506 11

Prepayments 9 2,945,594 1 3,044,982 2 1,364,840 1

Other current assets 51,991 - 13,768 - 21,466 -

Total current assets 130,087,168 59 130,453,670 63 111,924,770 62

Non-current assets

Available-for-sale financial assets 6(3) 34,426,758 16 10,276,491 5 7,113,383 4

- non-current

Financial assets carried at cost 6(4) 71,977 - 62,859 - 62,859 -

- non-current

Investments accounted for under 6(7) 49,609,086 22 60,331,429 29 56,079,091 31

equity method

Property, plant and equipment 6(8) 4,440,336 2 4,002,107 2 3,667,758 2

Intangible assets 313,928 - 110,730 - 123,425 -

Deferred income tax assets 6(21) 1,433,736 1 1,504,125 1 1,254,806 1

Other non-current assets 8 521,529 - 609,804 - 553,557 -

Total non-current assets 90,817,350 41 76,897,545 37 68,854,879 38

TOTAL ASSETS $ 220,904,518 100 $ 207,351,215 100 $ 180,779,649 100

(Continued)

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145 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ASUSTEK COMPUTER INC. SEPARATE BALANCE SHEETS DECEMBER 31, 2013, DECEMBER 31, 2012 AND JANUARY 1, 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

December 31, 2013 December 31, 2012 January 1, 2012 LIABILITIES AND EQUITY Notes AMOUNT % AMOUNT % AMOUNT %

Current liabilities

Financial liabilities at fair value 6(9) $ - - $ - - $ 32,695 -

through profit or loss - current

Notes and trades payable 52,936,486 24 51,713,012 25 37,098,952 20

Trades payable - related parties 7 995,368 1 5,590,107 3 9,068,411 5

Other payables - accrued expenses 6(14) and 7 20,143,109 9 14,265,110 7 12,354,760 7

Current income tax liabilities 6(21) 1,522,963 1 2,462,081 1 1,612,235 1

Provisions for liabilities - current 6(11) and 9 2,135,835 1 906,048 - 959,718 1

Other current liabilities 7 702,462 - 867,100 - 632,972 -

Total current liabilities 78,436,223 36 75,803,458 36 61,759,743 34

Non-current liabilities

Deferred income tax liabilities 6(21) 6,281,707 3 4,590,091 2 3,049,046 2

Other non-current liabilities 6(7) 987,086 - 960,192 1 1,134,114 -

Total non-current liabilities 7,268,793 3 5,550,283 3 4,183,160 2

Total liabilities 85,705,016 39 81,353,741 39 65,942,903 36

Equity

Share capital - common shares 6(12) 7,427,603 3 7,527,603 4 7,527,603 4

Capital surplus 6(13) 4,452,237 2 4,305,220 2 4,290,502 2

Retained earnings 6(14) and 6(21)

Legal reserve 25,707,004 12 23,464,771 11 21,806,955 12

Special reserve 699,350 - 699,350 1 699,350 1

Unappropriated retained earnings 90,066,124 41 87,540,465 42 77,642,092 43

Other equity 6(3), 6(7), 6(15) 6,847,184 3 2,460,065 1 2,870,244 2

and 6(21)

Total equity 135,199,502 61 125,997,474 61 114,836,746 64

TOTAL LIABILITIES AND

EQUITY $ 220,904,518 100 $ 207,351,215 100 $ 180,779,649 100

The accompanying notes are an integral part of these separate financial statements. See report of independent accountants dated March 27, 2014.

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146 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ASUSTEK COMPUTER INC. SEPARATE STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

FOR THE YEARS ENDED DECEMBER 31, 2013 2012 Items Notes AMOUNT % AMOUNT % Operating revenue 6(16) and 7 $ 358,741,099 100 $ 375,118,873 100 Operating costs 6(6), 6(10), 6(14), ( 335,795,322 ) ( 93 ) ( 350,312,389 ) ( 93 ) 6(19), 6(20), 6(23) and 7 Net operating margin 22,945,777 7 24,806,484 7 Unrealized loss (profit) from sales 249,992 - ( 324,190 ) - Gross profit 23,195,769 7 24,482,294 7 Operating expenses 6(10), 6(14), 6(19), 6(20), 6(23), 7 and 9 Selling expenses ( 3,206,216 ) ( 1 ) ( 2,815,514 ) ( 1) General and administrative expenses ( 2,959,634 ) ( 1 ) ( 1,701,471 ) ( 1) Research and development expenses ( 7,254,703 ) ( 2 ) ( 5,200,102 ) ( 1) Total operating expenses ( 13,420,553 ) ( 4 ) ( 9,717,087 ) ( 3) Operating profit 9,775,216 3 14,765,207 4 Non-operating revenues and expenses Other income 6(17) 1,281,587 - 619,124 - Other gains (losses) 6(2), 6(7), 6(9) and 3,729,676 1 1,739,906 - 6(18) Finance costs ( 5 ) - ( 5 ) - Share of profit of subsidiaries, associates 6(7) 10,775,288 3 9,540,518 3 and joint ventures accounted for under equity method Total non-operating revenues and 15,786,546 4 11,899,543 3 expenses Profit before income tax 25,561,762 7 26,664,750 7 Income tax expenses 6(21) ( 4,111,867 ) ( 1 ) ( 4,201,178 ) ( 1) Profit for the year $ 21,449,895 6 $ 22,463,572 6 Other comprehensive income Financial statements translation 6(15) $ 745,749 - ( $ 915,962 ) - differences of foreign operations Unrealized gain on valuation of 6(3), 6(7) and 2,988,705 1 3,288,300 1 available-for-sale financial assets 6(15) Share of other comprehensive income of 6(7) and 6(15) 949,998 - ( 2,528,409 ) ( 1 ) subsidiaries, associates and joint ventures accounted for under equity method Income tax relating to the components of 6(15) and 6(21) ( 307,826 ) - ( 246,467 ) - other comprehensive income Other comprehensive income for the year $ 4,376,626 1 ( $ 402,538 ) - Total comprehensive income for the year $ 25,826,521 7 $ 22,061,034 6

Earnings per share (In dollars) 6(22) Basic earnings per share $ 28.66 $ 29.84 Diluted earnings per share $ 28.47 $ 29.68

The accompanying notes are an integral part of these separate financial statements. See report of independent accountants dated March 27, 2014.

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147 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468

) ) ) ) )

- - -

2,965 402,538 209,783 224,501 200,974 4,376,626 2,525,987 10,915,024 22,463,572 14,302,445 21,449,895 114,836,746 125,997,474 125,997,474 135,199,502 Total equity Total

$ $ $ $ ( ( ( ( (

)

------2,525,987 2,525,987

$ $ $ $ Treasury shares Treasury

(

) ) ) )

------57,044 292,041 292,041 234,997 Gain on Gain 1,354,470 1,646,511 effective effective flow flow hedges

portion of cash $ $ $ $ ( ( ( (

------for

- assets 1,515,774 2,964,998 4,480,772 4,480,772 2,872,802 7,353,574 Other Other equity sale financial

available - on valuation of $ $ $ $ Unrealized gain

) ) ) )

------

271,393 foreign foreign 1,728,666 1,728,666 1,728,666 1,457,273 Financial operations translation statements

differences of of differences $ $ $ $ ( ( ( (

) ) ) ) ) )

- - - - -

7,641 10,493 retained 1,657,816 2,242,233 2,369,065 earnings 77,642,092 10,915,024 22,463,572 87,540,465 87,540,465 14,302,445 21,449,895 90,066,124

financial statements.financial

$ $ $ $ Unappropriated ( ( ( ( ( (

------separate

31, 2013 AND 2012 AND 31, 2013 TAIWAN DOLLARS) TAIWAN

arnings dated 27,March 2014. e

699,350 699,350 699,350 699,350

~

$ $ $ $ Special reserve Special 7 Retained Retained

~

------ASUSTEK ASUSTEK COMPUTER INC. 1,657,816 2,242,233 21,806,955 23,464,771 23,464,771 25,707,004

Legal reserve $ $ $ $ YEARS ENDED DECEMBER

)

------SEPARATE STATEMENTS OF CHANGES STATEMENTS IN SEPARATE EQUITY

See of report independent accountants FOR THE 5,614 2,965 (EXPRESSEDTHOUSANDS IN OF NEW 20,332 20,332 209,783 224,501 200,974 224,271

Others s

$ $ $ $ (

The The accompanying notes are integral partan these of

suplu

)

------Capital 56,922 4,284,888 4,284,888 4,284,888 4,227,966

$ $ $ $ Share premium (

)

------

100,000 shares 7,527,603 7,527,603 7,527,603 7,427,603 Common Common

$ $ $ $

(

)) )) 4 4

2012

under under equity method disposal of subsidiary and book value under equity method disposal of subsidiary and book value Legal reserve Legal dividends Cash reserve Legal dividends Cash

the For ended year December 31, Balance at 1,January 2012 earningsAppropriations of 2011 (Note 6(1 Profit for the year Other comprehensive income the for year Changes associatesin and joint ventures accounted for between Difference proceeds acquisition from or Balance at December 31, 2012 the For ended year December 31, 2013 Balance at 1,January 2013 Appropriations of 2012 earnings (Note 6(1 Profit for the year Other comprehensive income the for year Changes associatesin and joint ventures accounted for between Difference proceeds acquisition from or shares treasury of Purchase shares treasury of Retirement Balance at December 31, 2013

148 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ASUSTEK COMPUTER INC. SEPARATE STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

FOR THE YEARS ENDED DECEMBER 31, 2013 2012

Cash flows from operating activities Profit before tax for the year $ 25,561,762 $ 26,664,750 Adjustments to reconcile profit before tax to net cash provided by operating activities Income and expenses that result in non-cash flows Depreciation 1,532,321 1,116,943 Amortization 133,303 70,671 Reversal of allowance for doubtful accounts ( 86,428 ) ( 150,121 ) Net (gain) loss of financial assets or liabilities at fair value through profit or loss ( 43,790 ) ( 247,308 ) Share of profit of subsidiaries, associates and joint ventures accounted for under ( 10,775,288 ) ( 9,540,518 ) equity method (Gain) loss on disposal of investments ( 1,470,225 ) 3,926 Impairment loss on financial assets 23,666 125,544 Unrealized (loss) profit from sales ( 249,992 ) 324,190 Others 8,629 8,133 Changes in assets/liabilities relating to operating activities Financial assets at fair value through profit or loss 224,899 2,352,466 Trades receivable ( 1,596,971 ) ( 215,749 ) Notes and trades receivable - related parties 1,574,355 ( 14,149,737 ) Other receivables ( 1,279,762 ) 5,782,803 Inventories 2,586,581 ( 7,586,481 ) Prepayments ( 140,287 ) ( 16,171 ) Other current assets ( 38,223 ) 7,698 Financial liabilities at fair value through profit or loss ( 10,050 ) ( 109,515 ) Notes and trades payable 1,223,474 16,574,584 Trades payable - related parties ( 4,594,739 ) ( 3,478,304 ) Other payables - accrued expenses 6,117,725 246,384 Provisions for liabilities 1,229,787 ( 53,670 ) Other current liabilities ( 164,638 ) 234,128 Receipts of interest 198,013 196,463 Payment of interest ( 5 ) ( 5 ) Payment of income tax ( 3,596,806 ) ( 2,306,073 ) Net cash provided by (used in) operating activities 16,367,311 15,855,031 Cash flows from investing activities Proceeds from disposal of available-for-sale financial assets 175,250 57,959 Acquisition of investments accounted for under equity method ( 924,814 ) ( 339,528 ) Proceeds from disposal of investments accounted for under equity method 4,625,770 126,052 Proceeds from capital reduction of investments accounted for under equity method - 1,223,461 Acquisition of property, plant and equipment ( 1,815,704 ) ( 1,314,869 ) Acquisition of intangible assets ( 139,003 ) ( 47,824 ) Change in other non-current assets ( 179,917 ) ( 211,374 ) Receipts of dividends 1,259,194 721,612 Others ( 5,418 ) ( 45,524 ) Net cash provided by (used in) investing activities 2,995,358 169,965 Cash flows from financing activities Payment of cash dividends ( 14,302,445 ) ( 10,915,024 ) Purchase of treasury shares ( 2,525,987 ) - Others 7,867 2,506 Net cash provided by (used in) financing activities ( 16,820,565 ) ( 10,912,518 ) Increase in cash and cash equivalents 2,542,104 5,112,478 Cash and cash equivalents at beginning of the year 21,720,717 16,608,239 Cash and cash equivalents at end of the year $ 24,262,821 $ 21,720,717

The accompanying notes are an integral part of these separate financial statements. See report of independent accountants dated March 27, 2014.

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ASUSTEK COMPUTER INC. NOTES TO SEPARATE FINANCIAL STATEMENTS DECEMBER 31, 2013 AND 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANIZATION (1) ASUSTEK COMPUTER INC. (ASUS or the Company) was established in the Republic of China (R.O.C.). The Company is primarily engaged in the design, R&D and sales of 3C products (including PCs, main boards, other boards and cards, tablet PCs, smart phones and other handheld devices, etc.). (2) The Company resolved to spin-off its OEM businesses on January 1, 2008. Pursuant to the Company’s resolution, the Company transferred its computer and non-computer OEM businesses to its spun-off subsidiaries, PEGA and UNIHAN, respectively. On June 1, 2010, however, the Company transferred further its OEM assets and business (the Company’s investments accounted for under equity method in PEGA) to the Company’s another investee, PII. PII issued new shares to the Company and its shareholders as consideration. On April 29, 2013, the Company disposed the partial shares of PEGA and reduced the ownership percentage to be below 20%. 2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE SEPARATE FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION These separate financial statements were authorized for issuance by the Board of Directors on March 27, 2014. 3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards, International Accounting Standards and Interpretations/bulletins (IFRSs) as endorsed by the Financial Supervisory Commission (FSC) Not applicable as it is the first-time adoption of IFRSs by the Company this year. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company A. IFRS 9, “Financial Instruments: Classification and measurement of financial assets” (A) The International Accounting Standards Board (IASB) published IFRS 9, “Financial Instruments”, in November, 2009, which will take effect on January 1, 2013 with early application permitted (Through the amendments to IFRS 9 published on November 19, 2013, the IASB has removed the previous mandatory effective date, but the standard is available for immediate application). Although the FSC has endorsed IFRS 9, FSC does not permit early application of IFRS 9 when IFRSs are adopted in R.O.C. in 2013. Instead, enterprises should apply International Accounting Standard No. 39 (IAS 39), “Financial Instruments: Recognition and Measurement” reissued in 2009.

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(B) IFRS 9 was issued as the first step to replace IAS 39. IFRS 9 outlines the new classification and measurement requirements for financial instruments, which might affect the accounting treatments for financial instruments of the Company. (C) The Company has not evaluated the overall effect of the IFRS 9 adoption. However, based on preliminary evaluation, it was noted that the IFRS 9 adoption might have an impact on those instruments classified as “available-for-sale financial assets” held by the Company, as IFRS 9 specifies that the fair value changes in the equity instruments that meet certain criteria may be reported in other comprehensive income, and such amount that has been recognized in other comprehensive income should not be reclassified to profit or loss when such assets are derecognized. The Company recognized gain on equity instruments amounting to $2,689,834 in other comprehensive income for the year ended December 31, 2013. (3) IFRSs issued by IASB but not yet endorsed by the FSC The following are the assessment of new standards, interpretations and amendments issued by IASB that are effective but not yet endorsed by the FSC and have not been adopted by the Company (application of the new standards, interpretations and amendments should follow the regulations of the FSC):

New standards, interpretations and amendments Main amendments Effective date Limited exemption from The amendment provides first-time adopters of July 1, 2010 comparative IFRS 7 disclosures IFRSs with the same transition relief that for first-time adopters existing IFRS preparer received in IFRS 7, (amendment to IFRS 1) “Financial Instruments: Disclosures” and exempts first-time adopters from providing the additional comparative disclosures. Improvements to IFRSs 2010 Amendments to IFRS 1, IFRS 3, IFRS 7, IAS 1, January 1, 2011 IAS 34 and IFRIC 13.

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New standards, interpretations and amendments Main amendments Effective date IFRS 9, “Financial instruments: IFRS 9 requires gains and losses on financial November 19, 2013 Classification and measurement liabilities designated at fair value through profit (Not mandatory) of financial liabilities” or loss to be split into the amount of change in the fair value that is attributable to changes in the credit risk of the liability, which shall be presented in other comprehensive income, and cannot be reclassified to profit or loss when derecognising the liabilities; and all other changes in fair value are recognized in profit or loss. The new guidance allows the recognition of the full amount of change in the fair value in the profit or loss only if there is reasonable evidence showing on initial recognition that the recognition of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch (inconsistency) in profit or loss. (That determination is made at initial recognition and is not reassessed subsequently.) Disclosures - transfers of financial The amendment enhances qualitative and July 1, 2011 assets (amendment to IFRS 7) quantitative disclosures for all transferred financial assets that are not derecognized and for any continuing involvement in transferred assets, existing at the reporting date. Severe hyperinflation and removal When an entity’s date of transition to IFRSs is July 1, 2011 of fixed dates for first-time on, or after, the functional currency adopters (amendment to IFRS 1) normalisation date, the entity may elect to measure all assets and liabilities held before the functional currency normalisation date at fair value on the date of transition to IFRSs. First-time adopters are allowed to apply the derecognition requirements in IAS 39, “Financial instruments: Recognition and measurement”, prospectively from the date of transition to IFRSs, and they are allowed not to retrospectively recognize related gains on the date of transition to IFRSs.

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New standards, interpretations and amendments Main amendments Effective date Deferred tax: recovery of The amendment gives a rebuttable presumption January 1, 2012 underlying assets that the carrying amount of investment (amendment to IAS 12) properties measured at fair value is recovered entirely by sale, unless there exists any evidence that could rebut this presumption. The amendment also replaces Standing Interpretations Committee 21, “Income taxes - recovery of revalued non-depreciable assets”. IFRS 10, “Consolidated financial The standard builds on existing principles by January 1, 2013 statements” identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where it is difficult to assess. IFRS 11, “Joint arrangements” Judgments applied when assessing the types of January 1, 2013 joint arrangements-joint operations and joint ventures, the entity should assess the contractual rights and obligations instead of the legal form only. The standard also prohibits the proportional consolidation for joint ventures. IFRS 12, “Disclosure of interests The standard requires the disclosure of interests January 1, 2013 in other entities” in other entities including subsidiaries, joint arrangements, associates and unconsolidated structured entities. IAS 27, “Separate financial The standard removes the requirements of January 1, 2013 statements” (as amended in 2011) consolidated financial statements from IAS 27 and those requirements are addressed in IFRS 10, “Consolidated financial statements”. IAS 28, “Investments in associates As consequential amendments resulting from the January 1, 2013 and joint ventures” issuance of IFRS 11, “Joint arrangements”, (as amended in 2011) IAS 28 (revised) sets out the requirements for the application of the equity method when accounting for investments in joint ventures.

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New standards, interpretations and amendments Main amendments Effective date IFRS 13, “Fair value IFRS 13 aims to improve consistency and January 1, 2013 measurement” reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs. IAS 19 revised, “Employee The revised standard eliminates corridor January 1, 2013 benefits” (as amended in 2011) approach and requires actuarial gains and losses to be recognized immediately in other comprehensive income. Past service costs will be recognized immediately in the period incurred. Net interest expense or income, calculated by applying the discount rate to the net defined benefit liability or asset, replace the finance charge and expected return on plan assets. The return of plan assets, excluding net interest expenses, is recognized in other comprehensive income.

Presentation of items of other The amendment requires profit or loss and other July 1, 2012 comprehensive income comprehensive income to be presented (amendment to IAS 1) separately in the statement of comprehensive income. Also, the amendment requires entities to separate items presented in other comprehensive income into two groups based on whether or not they may be recycled to profit or loss subsequently. IFRIC 20, “Stripping costs in the Stripping costs that meet certain criteria should January 1, 2013 production phase of a surface be recognized as the “stripping activity asset”. mine” To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the entity shall account for the costs of that stripping activity in accordance with IAS 2, “Inventories”.

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New standards, interpretations and amendments Main amendments Effective date Disclosures - Offsetting financial The amendment requires disclosures to include January 1, 2013 assets and financial liabilities quantitative information that will enable users (amendment to IFRS 7) of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements. Offsetting financial assets and The amendment clarifies criterion that an entity January 1, 2014 financial liabilities “currently has a legally enforceable right to (amendment to IAS 32) set off the recognized amounts” and gross settlement mechanisms with particular features are effectively equivalent to net settlement”; they would therefore satisfy the IAS 32 criterion in these instances. Government loans The amendment provides deferment to first-time January 1, 2013 (amendment to IFRS 1) adopters to apply the requirements in IFRS 9, “Financial instruments”, and IAS 20, “Accounting for government grants and disclosure of government assistance”, prospectively to government loans that exist at the date of transition to IFRS, and the gain of government loans from the existing lower market rate should not be recognized as a government grant. Improvements to IFRSs Amendments to IFRS 1 and IAS 1, IAS 16, January 1, 2013 2009-2011 IAS 32 and IAS 34. Consolidated financial statements, The amendment clarifies that the date of initial January 1, 2013 joint arrangements and application is the first day of the annual period disclosure of interests in other in which IFRS 10, 11 and 12 is adopted. Entities: Transition guidance (amendments to IFRS 10, IFRS 11 and IFRS 12) Investment entities (amendments The amendments define “Investment Entities” January 1, 2014 to IFRS 10, IFRS 12 and IAS 27) and their characteristics. The parent company that meets the definition of investment entities should measure its subsidiaries using fair value through profit or loss instead of consolidating them. IFRIC 21, “Levies” The interpretation addresses the accounting January 1, 2014 for levies imposed by governments in accordance with legislation (other than income tax). A liability to pay a levy shall be recognized in accordance with IAS 37, “Provisions, contingent liabilities and contingent assets”.

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New standards, interpretations and amendments Main amendments Effective date Recoverable amount disclosures The amendments remove the requirement to January 1, 2014 for non-financial assets disclose recoverable amount when a cash (amendments to IAS 36) generating unit contains goodwill or intangible assets with indefinite useful lives that were not impaired. Novation of derivatives and The amendment states that the novation of January 1, 2014 continuation of hedge a hedging instrument would not be accounting (amendments to considered an expiration or termination IAS 39) giving rise to the discontinuation of hedge accounting when the hedging instrument that is being novated complies with specified criteria. IFRS 9, “Financial assets: hedge 1. IFRS 9 relaxes the requirements for November 19, 2013 accounting” and admendments hedged items and hedging instruments (Not mandatory) to IFRS 9, IFRS 7 and IAS 39 and removes the bright line of effectiveness to better align hedge accounting with the risk management activities of entity. 2. An entity can elect to early adopt the requirement to recognize the changes in fair value attributable to changes in an entity's own credit risk from financial liabilities that are designated under the fair value option in “other comprehensive income”. Services related contributions The amendment allows contirbutions from July 1, 2014 from employees or third parties employees or third parties that are linked (amendments to IAS 19R) to service, and do not vary with the length of employee service, to be deducted from the cost of benefits earned in the period that the services is provided. Contributions that are linked to service, and vary according to the length of employee service, must be spread over the service period using the same attribution method that is applied to the benefits. Improvements to IFRSs Amendments to IFRS 2, IFRS 3, IFRS 8, July 1, 2014 2010-2012 IFRS 13, IAS 16, IAS 24 and IAS 38. Improvements to IFRSs Amendments to IFRS 1, IFRS 3, IFRS 13 July 1, 2014 2011-2013 and IAS 40.

The Company is assessing the potential impact of the new standards, interpretations and amendments above and has not yet been able to reliably estimate their impact on the separate financial statements.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these separate financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. (1) Compliance statement A. These separate financial statements are the first separate financial statements prepared by the Company in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers”. B. In the preparation of the balance sheet (the opening IFRS balance sheet) as of January 1, 2012 (the date of the Company’s transition to IFRSs), the Company has adjusted the amounts that were reported in the separate financial statements in accordance with previous generally accepted accounting principles in the Republic of China (R.O.C. GAAP). Please refer to Note 14 for the impact of transitioning from R.O.C. GAAP to IFRSs on the Company’s financial position, financial performance and cash flows. (2) Basis of preparation A. Except for the following significant items, these separate financial statements have been prepared under the historical cost convention: (A) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. (B) Available-for-sale financial assets measured at fair value. (C) Liabilities on cash-settled share-based payment arrangements measured at fair value. (D) Defined benefit liabilities recognized based on the net amount of pension fund assets plus unrecognized past service cost, and less present value of defined benefit obligation. B. The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the separate financial statements are disclosed in Note 5. (3) Foreign currency translation Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The separate financial statements are presented in “New Taiwan Dollars (NTD)”, which is the Company’s functional and presentation currency. A. Foreign currency transactions and balances (A) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise, except when deferred in other comprehensive income as qualifying cash flow hedges.

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(B) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss. (C) Non-monetary assets and liabilities denominated in foreign currencies at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date. The translation differences are recognized in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date. The translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions. (D) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within “other gains and losses”. B. Translation of foreign operations (A) The financial performance and financial position of all the subsidiaries and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows: a. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet; b. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and c. All resulting exchange differences are recognized in other comprehensive income. (B) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even the Company still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations. (C) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even the Company still retains partial interests in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in these foreign operations. (4) Classification of current and non-current items A. Assets that meet one of the following criteria are classified as current assets: (A) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle; (B) Assets held mainly for trading purposes;

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(C) Assets that are expected to be realized within twelve months from the balance sheet date; (D) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date. Otherwise they are classified as non-current assets. B. Liabilities that meet one of the following criteria are classified as current liabilities: (A) Liabilities that are expected to be paid off within the normal operating cycle; (B) Liabilities arising mainly from trading activities; (C) Liabilities that are to be paid off within twelve months from the balance sheet date; (D) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Otherwise they are classified as non-current liabilities. (5) Cash equivalents Cash equivalents refer to short-term highly liquid investments that are readily convertible to known amount of cash and subject to an insignificant risk of changes in value. Time deposits can be classified as cash equivalents if they meet the criteria mentioned above and are held for short-term cash commitments in operational purpose. (6) Financial assets at fair value through profit or loss A. Financial assets at fair value through profit or loss are financial assets held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition: (A) Hybrid (combined) contracts; or (B) They eliminate or significantly reduce a measurement or recognition inconsistency; or (C) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. B. On a regular way purchase or sale basis, financial assets designated as at fair value through profit or loss are recognized and derecognized using trade date accounting. C. Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss. (7) Available-for-sale financial assets A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.

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B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting. C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in “financial assets measured at cost”. (8) Loans and receivables Trades receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Trades receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. Due to the insignificant discount effect on the non-interesting-bearing short-term receivables, they are measured at the original invoice amount. (9) Impairment of financial assets A. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. B. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as follows: (A) Significant financial difficulty of the issuer or debtor; (B) A breach of contract, such as a default or delinquency in interest or principal payments; (C) The Company, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider; (D) It becomes probable that the borrower will enter bankruptcy or other financial reorganization; (E) The disappearance of an active market for that financial asset because of financial difficulties; (F) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local unfavorable economic conditions that correlate with defaults on the assets in the group; (G) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or

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(H) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. C. When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets: (A) Financial assets measured at amortized cost The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortized cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. (B) Financial assets measured at cost The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account. (C) Available-for-sale financial assets The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from “other comprehensive income” to “profit or loss”. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss can be reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. (10) Derecognition of financial assets The Company derecognizes a financial asset when one of the following conditions is met: A. The contractual rights to receive cash flows from the financial asset expire. B. The contractual rights to receive cash flows from the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

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C. To transfer the contractual rights to receive cash flows of ownership of the financial asset but the Company has not retained the control of financial asset. (11) Lease receivables/ leases (lessor) An operating lease is a lease that all the risks and rewards incidental to ownership of the leased assets are not transferred to the lessees. Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term. (12) Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials and other direct/indirect costs. It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. (13) Investments accounted for under equity method / subsidiaries and associates A. Subsidiaries are all entities over which the Company has the power to govern the financial and operating policies. In general, control is presumed to exist when the investor holds, directly or indirectly through subsidiaries, 50% or more of the voting power of the investee. Investments in subsidiaries are accounted for under equity method. B. Unrealized gains on transactions between the Company and its subsidiaries are eliminated to the extent of the Company’s interest in the subsidiaries. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company. C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acqusition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company should continue to recognize losses in proportion to its ownership. D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transaction with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. E. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, other comprehensive income in relation to the subsidiary should be reclassified to profit or loss.

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F. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20% or more of the voting power of the investee. Investments in associates are accounted for under equity method and are initially recognized at cost. G. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate. H. When changes in an associate’s equity are not recognized in profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes change in ownership interests in the associate in “capital surplus” in proportion to its ownership. I. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company. J. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then “capital surplus” and “investments accounted for under equity method” shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of. K. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. L. When the Company disposes its investment in an associate and loses significant influence over this associate, the total amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately. M. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

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N. According to “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, profit and other comprehensive income in the separate financial statements should be the same as profit and other comprehensive income attributable to shareholders of the parent in the consolidated financial statements, and the equity in the separate financial statements should be the same as the equity attributable to shareholders of the parent in the consolidated financial statements. (14) Property, plant and equipment A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised. B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. C. Except for land which is not depreciated, other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is significant, it should be depreciated separately. D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”, from the date of the change. The estimated useful lives of the buildings are 10~50 years, machinery and equipment are 3 years and miscellaneous equipment are 1~15 years. (15) Leased assets/ leases (lessee) An operating lease is a lease that the lessor assumes substantially all the risks and rewards incidental to ownership of the leased asset. Payments made under an operating lease (net of any incentives received from the lessor) are recognized in profit or loss on a straight-line basis over the lease term. (16) Investment property An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 50 years. (17) Intangible assets Computer software is amortized on a straight-line basis over its estimated useful life of 1~5 years.

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(18) Impairment of non-financial assets A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or decrease, the impairment loss shall be reversed to the extent of the loss previously recognized in profit or loss. However, the reversal should not exceed the carrying amount, net of depreciation or amortization had the impairment not been recognized. B. The recoverable amounts of goodwill shall be evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years. (19) Notes and trades payable Notes and trades payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. Due to the insignificant discount effect on the non-interesting-bearing short-term payables, they are measured at the original invoice amount. (20) Financial liabilities at fair value through profit or loss A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition: (A) Hybrid (combined) contracts; or (B) They eliminate or significantly reduce a measurement or recognition inconsistency; or (C) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy. B. Financial liabilities at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognized in profit or loss. (21) Derecognition of financial liabilities A financial liability is derecognized when the obligation under the liability specified in the contract is discharged, cancelled or expires.

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(22) Offsetting financial assets and financial liabilities Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. (23) Derivative financial instruments Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any changes in the fair value are recognized in profit or loss. (24) Provisions for liabilities Provisions are recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses. (25) Employee benefits A. Short-term employee benefits Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service. B. Pensions (A) Defined contribution plans For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments. (B) Defined benefit plans a. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in such corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead. b. Actuarial gains and losses arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise.

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c. Past service costs are recognized immediately in profit or loss if vested immediately; if not, the past service costs are amortized on a straight-line basis over the vesting period. (C) Termination benefits Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognizes termination benefits when it is demonstrably committed to a termination, when it has a detailed formal plan to terminate the employment of current employees and when it can no longer withdraw the plan. In the case of an offer made by the Company to encourage voluntary termination of employment, the termination benefits are recognized as expenses only when it is probable that the employees are expected to accept the offer and the number of the employees taking the offer can be reliably estimated. Benefits falling due more than 12 months after balance sheet date are discounted to their present value. (D) Employees’ bonus and directors’ and supervisors’ remuneration Employees’ bonus and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. However, if the accrued amounts for employees’ bonus and directors’ and supervisors’ remuneration are different from the actual distributed amounts as resolved by the shareholders at their shareholders’ meeting subsequently, the differences should be recognized based on the accounting for changes in estimates. The Company calculates the number of shares of employees’ stock bonus based on the fair value per share at the previous day of the shareholders’ meeting held in the year following the financial reporting year, and after taking into account the effects of ex-rights and ex-dividends. (26) Income tax A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity. B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the shareholders resolve to retain the earnings.

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C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the separate financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed. E. Current income tax assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously. F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from research and development expenditures and employees’ training expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized. (27) Dividends Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance. (28) Revenue recognition Sales of goods The Company is primarily engaged in the selling of 3C products. Revenue is measured at the fair value of the consideration received or receivable taking into account value-added tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Company’s activities. Revenue arising from the sales of goods should be recognized when the Company has delivered the goods to the customer, the amount of sales revenue can be measured

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reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied. (29) Business combinations A. The Company uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. B. If the total of the fair value of the consideration of acquisition and any non-controlling interest in the acquiree as well as the acquisition-date fair value of any previous equity interest in the acquiree is higher than the fair value of the Company’s share of the identifiable net assets acquired, the difference is recorded as goodwill; if less than the fair value of the Company’s share of the identifiable net assets acquired (bargain purchase), the difference is recognized as profit directly. 5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY The preparation of these separate financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions at the balance sheet date and estimates concerning future events. The resulting accounting estimates and assumptions might be different from the actual results, and will be continually evaluated and adjusted based on historical experience and other factors. (1) Critical judgements in applying the Company’s accounting policies A. Financial assets - impairment of equity investments The Company follows the guidance of IAS 39 to determine whether a financial asset - equity investment is impaired. This determination requires significant judgement. In making this judgement, the Company evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

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B. Investment property The Company uses the main part of the investment property to earn rentals or for capital appreciation and others for its own use. When the portions cannot be sold separately and cannot be leased separately under finance lease, the property is classified as investment property only if the own-use portion accounts for less than 50% of the property. C. Revenue recognition on a net/gross basis The determination of whether the Company is acting as principal or agent in a transaction is based on an evaluation of the Company’s exposure to the significant risks and rewards associated with the sale of goods in accordance with the business model and substance of the transaction. Where the Company acts as a principal, the amount received or receivable from customers is recognized as revenue on a gross basis. Where the Company acts as an agent, net revenue is recognized representing commissions earned. The following characteristics of a principal are used as indicators to determine whether the Company shall recognize revenue on a gross basis: (A) The Company has primary responsibilities for the goods or services it provides; (B) The Company bears inventory risk; (C) The Company has the latitude in establishing prices for the goods or services, either directly or indirectly. (D) The Company bears credit risk of customers. (2) Critical accounting estimates and assumptions A. Impairment assessment of investments accounted for under equity method The Company assesses the impairment of an investment accounted for under equity method as soon as there is any indication that it might have been impaired and its carrying amount cannot be recoverable. The Company assesses the recoverable amounts of an investment accounted for under equity method based on the present value of the Company’s share of expected future cash flows of the investee, and analyzes the reasonableness of related assumptions. As of December 31, 2013 the Company’s investments accounted for under equity method, net of impairment loss, amounted to $49,609,086. B. Evaluation of inventories Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2013, the carrying amount of inventories was $25,149,406.

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6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents 2013/12/31 2012/12/31 2012/1/1 Cash on hand and petty cash $ 250 $ 250 $ 250 Checking accounts and demand 4,696 6,281 5,677 deposits Time deposits 24,257,875 21,714,186 16,602,312 $ 24,262,821 $ 21,720,717 $ 16,608,239

A. The Company associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. The Company’s maximum exposure to credit risk at balance sheet date is the carrying amount of all cash and cash equivalents. B. The Company has no cash and cash equivalents pledged to others. (2) Financial assets at fair value through profit or loss 2013/12/31 2012/12/31 2012/1/1 Current: Financial assets held for trading Open-end funds $ 7,461,838 $ 7,703,767 $ 9,623,062 Convertible bonds 76,068 - 92,850 Non-hedging derivatives - 5,198 21,391 $ 7,537,906 $ 7,708,965 $ 9,737,303

A. The Company recognized net gain of financial assets held for trading amounting to $53,840 and $324,128 for the years ended December 31, 2013 and 2012, respectively. B. The counterparties of the Company’s debt instrument investments have good credit quality, all with credit rating of the lowest risk level based on the Company’s internal assessment for their operating situations and financial structures. The maximum exposure to credit risk at balance sheet date is the carrying amount of financial assets at fair value through profit or loss-debt instruments. C. The unexpired contracts are as follows: 2013/12/31 2012/12/31 Contract amount Contract amount (Nominal principal) (Nominal principal) (in thousands) Contract period (in thousands) Contract period Derivative financial assets: Forward exchange contracts -USD/NTD USD - - USD 50,000 2012/10-2013/01

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2012/1/1 Contract amount (Nominal principal) (in thousands) Contract period Derivative financial assets: Forward exchange contracts -USD/NTD USD 80,000 2011/10-2012/01

The Company entered into forward exchange contracts to sell various forward foreign currencies to hedge exchange rate risk of import and export proceeds. However, these forward exchange contracts are not accounted for under hedge accounting. D. The Company has no financial assets at fair value through profit or loss pledged to others. (3) Available-for-sale financial assets 2013/12/31 2012/12/31 2012/1/1 Current items: Listed and OTC stocks $ 275,293 $ 395,320 $ 343,780 Valuation adjustment 7,281 ( 35,920) ( 56,988) Accumulated impairment ( 75,595) ( 51,929) ( 12,000) $ 206,979 $ 307,471 $ 274,792 Non-current items: Listed and OTC stocks $ 26,460,852 $ 5,256,088 $ 5,335,493 Unlisted and non-OTC stocks 20,372 20,373 56,373 26,481,224 5,276,461 5,391,866 Valuation adjustment 7,945,534 5,000,030 1,732,798 Accumulated impairment - - ( 11,281) $ 34,426,758 $ 10,276,491 $ 7,113,383

A. The Company recognized the changes of fair value in other comprehensive income of $2,689,834 and $2,959,470 for the years ended December 31, 2013 and 2012, respectively. B. After evaluating and comparing the carrying value of financial assets carried at cost and its recoverable amount, the Company recognized impairment loss amounting to $23,666 and $70,804 for the years ended December 31, 2013 and 2012, respectively. In 2012, an impaired stock investment was reclassified to investments accounted for under equity method as the Company gained control after acquisition of additional shares. Please refer to Note 6(7) for the detailed information. C. The Company has no available-for-sale financial assets pledged to others. (4) Financial assets measured at cost 2013/12/31 2012/12/31 2012/1/1 Non-current items: Unlisted and non-OTC stocks $ 100,000 $ 100,000 $ 100,000 Private fund 9,118 - - 109,118 100,000 100,000 Less: accumulated impairment ( 37,141) ( 37,141) ( 37,141) $ 71,977 $ 62,859 $ 62,859

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A. In accordance with the Company’s intention, its investment in the private fund should be classified as “available-for-sale financial assets”. However, as the private fund is not traded in active market, and no sufficient industry and financial information on the private fund portfolio can be obtained, the fair value of the investment in private fund cannot be measured reliably. The Company classified those funds as “financial assets measured at cost”. B. The Company has no financial assets measured at cost pledged to others. (5) Trades receivable (including related parties) 2013/12/31 2012/12/31 2012/1/1 Trades receivable (including related parties) $ 69,934,987 $ 69,914,143 $ 55,548,641 Less: allowance for doubtful accounts ( 21,528) ( 13,201) ( 31,227) (accumulated impairment) $ 69,913,459 $ 69,900,942 $ 55,517,414

A. The aging analysis of trades receivable (including related parties) that were past due but not impaired is as follows: 2013/12/31 2012/12/31 2012/1/1 Up to 90 days $ 2,072,287 $ 897,935 $ 594,367 91 to 180 days 27,008 39,836 65,189 Over 181 days 414 6,313 1,328 $ 2,099,709 $ 944,084 $ 660,884

There was no significant change for the credit quality of the above receivables after the assessment and they were still considered collectible, so the Company had no impairment concern. B. Individual assessment of impaired trades receivable (including related parties): (A) Impaired but not past due 2013/12/31 2012/12/31 2012/1/1 Gross amount (including related parties) $ - $ - $ -

(B) Impaired and past due 2013/12/31 2012/12/31 2012/1/1 Gross amount (including related parties) $ 21,528 $ 13,201 $ 31,227

(C) Movements for allowance for doubtful accounts (accumulated impairment) of trades receivable (including related parties) are as follows: 2013 2012 At January 1 $ 13,201 $ 31,227 Provision (reversal) 10,099 ( 150,121) Write-offs ( 1,772) - Reclassifications - 132,095 $ 21,528 $ 13,201 At December 31

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C. The credit quality of trades receivable (including related parties) that are neither past due nor impaired based on the Company’s Credit Quality Control Policy is as follows: 2013/12/31 2012/12/31 2012/1/1 Group 1 $ 65,419,690 $ 66,986,305 $ 52,841,919 Group 2 2,394,060 1,970,553 2,014,611 $ 67,813,750 $ 68,956,858 $ 54,856,530

Group 1: Insured, or guaranteed by the third party, or the trading object is subsidiary or associate. Group 2: Neither insured and guaranteed by the third party, nor the trading object is subsidiary or associate. D. The maximum exposure to credit risk at December 31, 2013, December 31, 2012, and January 1, 2012 was the carrying amount of each class of trades receivable (including related parties). E. The Company does not hold any collateral as security. (6) Inventories 2013/12/31 Allowance for Cost valuation loss Book value Raw materials $ 22,076,317 ($ 2,031,345) $ 20,044,972 Work in process 808,175 ( 45,244) 762,931 Finished goods 1,252,872 ( 42,809) 1,210,063 Merchandise inventories 3,174,362 ( 458,518) 2,715,844 Inventories in transit 415,596 - 415,596 $ 27,727,322 ($ 2,577,916) $ 25,149,406

2012/12/31 Allowance for Cost valuation loss Book value Raw materials $ 25,977,812 ($ 1,884,059) $ 24,093,753 Work in process 1,160,705 ( 39,214) 1,121,491 Finished goods 857,979 ( 19,345) 838,634 Merchandise inventories 1,439,658 ( 191,378) 1,248,280 Inventories in transit 433,829 - 433,829 $ 29,869,983 ($ 2,133,996) $ 27,735,987

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2012/1/1 Allowance for Cost valuation loss Book value Raw materials $ 17,395,702 ($ 884,473) $ 16,511,229 Work in process 1,169,467 ( 39,726) 1,129,741 Finished goods 636,649 ( 4,783) 631,866 Merchandise inventories 1,940,367 ( 247,545) 1,692,822 Inventories in transit 183,848 - 183,848 $ 21,326,033 ($ 1,176,527) $ 20,149,506

The inventories recognized as increase in operating costs amounted to $489,358 and $960,057, of which $443,920 and $957,469 pertain to the decline in value of inventories for the years ended December 31, 2013 and 2012, respectively. (7) Investments accounted for under equity method

2013/12/31 2012/12/31 2012/1/1 Ownership Ownership Ownership Book Value (%) Book Value (%) Book Value (%) AIL $ 32,978,253 100.00 $ 23,025,704 100.00 $ 17,330,956 100.00 ASKEY 8,118,668 100.00 7,741,970 100.00 9,487,345 100.00 AAEON 2,505,211 47.00 2,517,816 47.00 2,615,168 47.00 ASGL 1,589,331 100.00 - - - - HCVC 1,078,208 100.00 1,038,522 100.00 1,069,333 100.00 HMI 728,241 100.00 722,706 100.00 720,590 100.00 AHL 586,601 100.00 606,952 100.00 670,755 100.00 ASMEDIA 476,740 43.89 500,466 43.89 320,110 52.31 PEGA - - 23,033,759 24.08 22,335,550 24.46 Others 1,547,833 1,143,534 1,529,284 $ 49,609,086 $ 60,331,429 $ 56,079,091

A. Subsidiaries (A) Information about the Company’s subsidiaries is provided in Note 4(3) of the 2013 consolidated financial statements (not presented herein). (B) The Company invested USD 3,000,000 to establish ASUS GLOBAL PTE. LTD. (ASGL) on April 2, 2013 and infused additional capital of USD 25,000,000 on June 17, 2013. (C) On April 23, 2012, the Group pooled $438,128 to acquire 49.5% shares of UPI SEMICONDUCTOR CORP. (UPI). From that date, the Group has control over UPI which was then accounted for under equity method.

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B. Associates (A) The financial information of the Company’s associates is summarized below: Assets Liabilities Revenue Profit 2013/12/31 $ 965,495 $ 691,193 $ 1,958,818 $ 22,801 2012/12/31 $ 392,967,7260 $ 265,049,059 $ 883,984,624 $ 6,020,744 2012/1/1 $ 299,735,196 $ 182,772,056

(B) The fair value of the Company’s associates which have quoted market price is as follows: 2013/12/31 2012/12/31 2012/1/1 PEGA Note $ 20,709,707 $ 18,172,699 Note: On April 29, 2013, the Company disposed 103,017,000 shares of PEGA totaling $4,663,076 at the average price of $45.27 (in dollars) per share. After this disposal, the Company’s ownership percentage of PEGA was reduced to 19.59% and the Company has lost significant influence over PEGA. The Company remeasured the investment retained in PEGA at its fair value, and reclassified it to “available-for-sale financial assets - non-current”. The value differences between the fair value and the carrying amounts with other comprehensive income previously recognized in relation to PEGA was reclassified to profit for the period amounting to $1,447,023. (C) The effect of changes in unrealized gain (loss) on valuation of available-for-sale financial assets (including cash flow hedges) resulting from investments accounted for under equity method were $251,033 and ($1,641,094) for the years ended December 31, 2013 and 2012, respectively. (D) After evaluating and comparing the carrying value of investments accounted for under equity method and its recoverable amount, the Company recognized impairment loss amounting to $0 and $54,740 for the years ended December 31, 2013 and 2012, respectively.

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(8) Property, plant and equipment Machinery and Miscellaneous Land Buildings equipment equipment Total At January 1, 2013 Cost $ 981,191 $ 2,312,270 $ 462,029 $ 2,248,826 $ 6,004,316 Accumulated depreciation - ( 437,531) ( 252,244) ( 1,312,434) ( 2,002,209) and impairment $ 981,191 $ 1,874,739 $ 209,785 $ 936,392 $ 4,002,107 At January 1, 2013 $ 981,191 $ 1,874,739 $ 209,785 $ 936,392 $ 4,002,107 Additions - - 105,203 1,710,501 1,815,704 Disposals - - - ( 7) ( 7) Reclassifications - - 450 154,403 154,853 Depreciation - ( 47,390) ( 87,488) ( 1,397,443) ( 1,532,321) At December 31, 2013 $ 981,191 $ 1,827,349 $ 227,950 $ 1,403,846 $ 4,440,336 At December 31, 2013 Cost $ 981,191 $ 2,312,270 $ 567,532 $ 4,095,092 $ 7,956,085 Accumulated depreciation - ( 484,921) ( 339,582) ( 2,691,246) ( 3,515,749) and impairment $ 981,191 $ 1,827,349 $ 227,950 $ 1,403,846 $ 4,440,336

Machinery and Miscellaneous Land Buildings equipment equipment Total At January 1, 2012 Cost $ 981,191 $ 2,312,270 $ 379,407 $ 943,706 $ 4,616,574 Accumulated depreciation - ( 390,140) ( 203,084) ( 355,592) ( 948,816) and impairment $ 981,191 $ 1,922,130 $ 176,323 $ 588,114 $ 3,667,758 At January 1, 2012 $ 981,191 $ 1,922,130 $ 176,323 $ 588,114 $ 3,667,758 Additions - - 124,864 1,190,005 1,314,869 Disposals - - - ( 615) ( 615) Reclassifications - - - 137,038 137,038 Depreciation - ( 47,391) ( 91,402) ( 978,150) ( 1,116,943) At December 31, 2012 $ 981,191 $ 1,874,739 $ 209,785 $ 936,392 $ 4,002,107 At December 31, 2012 Cost $ 981,191 $ 2,312,270 $ 462,029 $ 2,248,826 $ 6,004,316 Accumulated depreciation - ( 437,531) ( 252,244) ( 1,312,434) ( 2,002,209) and impairment $ 981,191 $ 1,874,739 $ 209,785 $ 936,392 $ 4,002,107

The Company has no property, plant and equipment pledged to others. (9) Financial liabilities at fair value through profit or loss

2013/12/31 2012/12/31 2012/1/1 Current items: Financial liabilities held for trading Non-hedging derivatives $ - $ - $ 32,695

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A. The Company recognized net loss of financial liabilities held for trading amounting to $10,050 and $76,820 for the years ended December 31, 2013 and 2012, respectively. B. The unexpired contracts are as follows: 2013/12/31 2012/12/31 Contract amount Contract amount (Nominal principal) (Nominal principal) (in thousands) Contract period (in thousands) Contract period Derivative financial liabilities: Forward exchange contracts -USD/NTD USD - - USD - - 2012/1/1 Contract amount (Nominal principal) (in thousands) Contract period Derivative financial liabilities: Forward exchange contracts -USD/NTD USD 278,000 2011/11-2012/03 The information about the intention and contract terms of non-hedging derivative financial liabilities is provided in Note 6(2). (10) Pensions A. (A) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. In addition, except for a few foreign employees, the Company had settled its financial obligations to its employees on December 31, 2007. (B) The Company contributes 2% of the employees’ monthly salaries and wages for a few foreign employees in accordance with the R.O.C. Labor Standards Law to an independent retirement trust fund, with the Bank of Taiwan, the trustee. The pension costs under the above pension plan were $675 and $550 for the years ended December 31, 2013 and 2012, respectively. B. Effective July 1, 2005, the Company has established a defined contribution pension plan (New Plan) under the Labor Pension Act, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts

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at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under the defined contribution pension plans were $196,608 and $165,605 for the years ended December 31, 2013 and 2012, respectively. (11) Provisions for liabilities Provisions for legal claims and royalty: 2013 2012 At January 1 $ 906,048 $ 959,718 Provision (reversal) 1,201,465 ( 70,039) Net exchange differences 28,322 16,369 At December 31 $ 2,135,835 $ 906,048

Analysis of total provisions: 2013/12/31 2012/12/31 2012/1/1 Current $ 2,135,835 $ 906,048 $ 959,718

The Company recognizes provision for legal claims or royalty fees made by the patentees against the Company. After taking appropriate legal advice, the management evaluates the probable claimable fees accrued as provisions for liabalities. The provision charge is recognized in profit or loss within “general and administrative expenses”. (12) Common shares A. As of December 31, 2013, the Company’s authorized capital was $47,500,000, consisting of 4,750,000,000 shares of common stock (including 50,000,000 shares which were reserved for employee stock options), and the outstanding capital was $7,427,603 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. Movements in the number of the Company’s ordinary shares outstanding are as follows: 2013 2012 At January 1 752,760,280 752,760,280 Shares reacquired ( 10,000,000) - At December 31 742,760,280 752,760,280

B. As of December 31, 2013, the Company issued Global Depositary Receipts (GDRs), of which 5,519,000 units of the GDRs are now listed on the Luxembourg Stock Exchange (The Board of Directors authorized to transfer its GDRs from the London Stock Exchange to the Luxembourg Stock Exchange on January 30, 2013, and the change had taken effect on March 28, 2013). Per unit of GDR represents 5 shares of the Company’s common stock and total GDRs represent 27,597,000 shares of the Company’s common stock. The terms of GDR are as follows: (A) Voting rights GDR holders may, pursuant to the Depositary Agreement and the relevant laws and regulations of the R.O.C., exercise the voting rights pertaining to the underlying common shares represented by the GDRs.

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(B) Dividends, stock warrants and other rights GDR holders and common shareholders are all entitled to receive dividends. The Depositary may issue new GDRs in proportion to GDRs holding ratios or raise the number of shares of common stock represented by each unit of GDR or sell stock dividends on behalf of GDR holders and distribute proceeds to them in proportion to their GDRs holding ratios. C. Treasury shares (A) To enhance the Company’s credit and shareholders’ equity, the Company reacquired its treasury shares. During the period from July 2, 2013 to August 20, 2013, the shares reaquired were 10,000,000 shares, amounting to $2,525,987. All of the treasury shares had been retired on November 21, 2013. In addition, the Company did not reaquire its shares in 2012. (B) Pursuant to the R.O.C. Securities and Exchange Law, the number of shares bought back as treasury shares should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus. (C) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should not be pledged as collateral and the shareholder’s rights should not be enjoyed before transfer. (D) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should be transferred to the employees within three years from the reacquisition date and shares not transferred within the three-year period should be retired. Treasury shares to enhance the Company’s credit and the shareholders’ equity should be retired within six months from the reacquisition date. (13) Capital surplus Pursuant to the R.O.C. Company Law, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

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Difference between Changes in proceeds from associates and joint acquisition or disposal ventures accounted of subsidiary and for under Share premium book value equity method Total At January 1, 2013 $ 4,284,888 $ 224,501 ($ 204,169) $ 4,305,220 Effect of changes in - 2,965 247,828 250,793 percentage of ownership Effect of disposals - - ( 46,854) ( 46,854) Retirement of treasury ( 56,922) - - ( 56,922) shares At December 31, 2013 $ 4,227,966 $ 227,466 ($ 3,195) $ 4,452,237

Difference between Changes in proceeds from associates and joint acquisition or disposal ventures accounted of subsidiary and for under Share premium book value equity method Total At January 1, 2012 $ 4,284,888 $ - $ 5,614 $ 4,290,502 Effect of changes in - 132,640 ( 209,774) ( 77,134) percentage of ownership Effect of disposals - 91,861 ( 9) 91,852 At December 31, 2012 $ 4,284,888 $ 224,501 ($ 204,169) $ 4,305,220

(14) Retained earnings A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. When such legal reserve amounts to the total authorized capital, the Company shall not be subject to this requirement. The Company may then appropriate a certain amount as special reserve according to relevant regulations or as required by the government. The remaining balance shall be distributed or reversed by the board of directors as follows: appropriate 10% of capital stock as capital interest, no less than 1% as employees’ bonuses, and no more than 1% as directors’ and supervisors’ bonuses. When employees’ bonuses are distributed in the form of shares, the recipients may include the employees of subsidiaries. After the distribution of earnings, the remaining earnings and prior years’ undistributed earnings, if any, may be appropriated according to a resolution adopted in the shareholders’ meeting. B. The Company is facing a rapidly changing industrial environment, with the life cycle of the industry in the stable growth phase. In light of the long-term financial plan of the Company and the demand for cash by the stockholders, the Company should distribute cash dividends of not less than 10% of the total dividends declared.

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C. Except for covering accumulated deficit, increasing capital or payment of cash in proportion to ownership percentage, the legal reserve shall not be used for any other purpose. The amount capitalized or the cash payment shall be limited to the portion of legal reserve which exceeds 25% of the paid-in capital. D. (A) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. (B) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. E. The Company estimates the amount of employees’ bonuses and directors’ and supervisors’ remuneration according to the Company Law and the Company’s articles of incorporation. The employees’ bonuses and directors’ and supervisors’ remuneration were estimated and recognized based on a specific percentage approved by the management in accordance with the Company’s articles of incorporation. The Company recognized employees’ bonuses of $928,107 and $971,367 and directors’ and supervisors’ remuneration of $185,621 and $194,273 for the years ended December 31, 2013 and 2012, respectively. The number of shares of the dividend distribution is based on the closing price of the day before the shareholders’ meeting date and considering the effect of ex-rights and ex-dividends. There was no difference between the proposed amounts of employees’ bonuses amounting to $971,367 and directors’ and supervisors’ remuneration amounting to $194,273 by the Board of Directors and the amounts accrued as expenses in the 2012 financial statements. Information on the appropriation of the Company’s employees’ bonus and directors’ and supervisors’ remuneration as proposed by the Board of Directors and approved by the shareholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. F. As resolved by the shareholders on June 12, 2012, the Company recognized cash dividends distributed to owners amounting to $10,915,024 ($14.5 (in dollars) per share) for the appropriation of 2011 earnings. On June 17, 2013, the shareholders resolved to distribute cash dividends to owners amounting to $14,302,445 ($19 (in dollars) per share) for the appropriation of 2012 earnings. G. The appropriations of 2013 earnings had been proposed by the Board of Directors on March 27, 2014. Details are summarized as follows: 2013 Dividends per share Amount (in dollars) Cash dividends $ 14,483,825 $ 19.50 Employees' cash bonus 928,107 - Directors' and supervisors' remuneration 185,621 -

As of March 27, 2014, the appropriations of 2013 earnings stated above had not been resolved by the shareholders.

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C. Except for covering accumulated deficit, increasing capital or payment of cash in proportion (15) Other equity items to ownership percentage, the legal reserve shall not be used for any other purpose. The Financial amount capitalized or the cash payment shall be limited to the portion of legal reserve which statements exceeds 25% of the paid-in capital. Unrealized gain translation D. (A) In accordance with the regulations, the Company shall set aside special reserve from on valuation of differences of the debit balance on other equity items at the balance sheet date before distributing Cash flow hedges available-for-sale foreign operations Total earnings. When debit balance on other equity items is reversed subsequently, the At January 1, 2013 ($ 292,041) $ 4,480,772 ($ 1,728,666) $ 2,460,065 reversed amount could be included in the distributable earnings. -the Company - 2,689,834 736,794 3,426,628 (B) The amounts previously set aside by the Company as special reserve on initial -Subsidiaries 57,044 200,803 82,121 339,968 application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, -Aassociates - ( 17,835) 638,358 620,523 At December 31, 2013 ($ 234,997) $ 7,353,574 ($ 271,393) $ 6,847,184 dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. Financial E. The Company estimates the amount of employees’ bonuses and directors’ and supervisors’ statements remuneration according to the Company Law and the Company’s articles of incorporation. Unrealized gain translation The employees’ bonuses and directors’ and supervisors’ remuneration were estimated and on valuation of differences of recognized based on a specific percentage approved by the management in accordance with Cash flow hedges available-for-sale foreign operations Total the Company’s articles of incorporation. The Company recognized employees’ bonuses of At January 1, 2012 $ 1,354,470 $ 1,515,774 $ - $ 2,870,244 $928,107 and $971,367 and directors’ and supervisors’ remuneration of $185,621 and -the Company - 2,959,470 ( 833,599) 2,125,871 $194,273 for the years ended December 31, 2013 and 2012, respectively. The number of -Subsidiaries ( 1,646,511) ( 7,057) ( 258,634) ( 1,912,202) shares of the dividend distribution is based on the closing price of the day before the -Aassociates - 12,585 ( 636,433) ( 623,848) At December 31, 2012 ($ 292,041) $ 4,480,772 ($ 1,728,666) $ 2,460,065 shareholders’ meeting date and considering the effect of ex-rights and ex-dividends. There was no difference between the proposed amounts of employees’ bonuses amounting to (16) Operating revenue $971,367 and directors’ and supervisors’ remuneration amounting to $194,273 by the Board For the years ended December 31, of Directors and the amounts accrued as expenses in the 2012 financial statements. 2013 2012 Information on the appropriation of the Company’s employees’ bonus and directors’ and Sales revenue $ 358,741,099 $ 375,118,873 supervisors’ remuneration as proposed by the Board of Directors and approved by the (17) Other income shareholders will be posted in the “Market Observation Post System” at the website of the For the years ended December 31, Taiwan Stock Exchange. 2013 2012 F. As resolved by the shareholders on June 12, 2012, the Company recognized cash dividends Interest income $ 198,012 $ 196,463 distributed to owners amounting to $10,915,024 ($14.5 (in dollars) per share) for the Dividend income 1,083,575 422,661 $ 1,281,587 $ 619,124 appropriation of 2011 earnings. On June 17, 2013, the shareholders resolved to distribute cash dividends to owners amounting to $14,302,445 ($19 (in dollars) per share) for the (18) Other gains (losses) appropriation of 2012 earnings. For the years ended December 31, G. The appropriations of 2013 earnings had been proposed by the Board of Directors on March 2013 2012 27, 2014. Details are summarized as follows: Net losses on financial liabilities at fair value ($ 10,050) ($ 76,820) 2013 through profit or loss Dividends per share Net gains on financial assets at fair value 53,840 324,128 Amount (in dollars) through profit or loss Cash dividends $ 14,483,825 $ 19.50 Net currency exchange gains 2,095,291 1,445,006 Employees' cash bonus 928,107 - Gains (losses) on disposal of investments 1,470,225 ( 3,926) Directors' and supervisors' remuneration 185,621 - Others 120,370 51,518 $ 3,729,676 $ 1,739,906 As of March 27, 2014, the appropriations of 2013 earnings stated above had not been resolved by the shareholders.

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(19) Costs and expenses by nature For the years ended December 31, 2013 2012 Operating Operating Operating Operating costs expenses Total costs expenses Total Employee benefit expenses $ 227,558 $ 8,531,458 $ 8,759,016 $ 165,287 $ 6,122,751 $ 6,288,038 Depreciation 1,341,074 191,247 1,532,321 924,798 192,145 1,116,943 Amortization - 133,303 133,303 191 70,480 70,671

(20) Employee benefit expenses For the years ended December 31, 2013 2012 Wages and salaries $ 7,998,886 $ 5,654,474 Labor and health insurance 379,283 276,261 Pension (Note) 197,283 166,155 Other personnel expenses 183,564 191,148 $ 8,759,016 $ 6,288,038

Note: Including the pension expense under the defined contribution plans and defined benefit plans. (21) Income tax A. Income tax expenses (A) Components of income tax expenses: For the years ended December 31, 2013 2012 Current income tax: Current income tax on profits for the year $ 2,206,317 $ 2,935,957 Additional 10% tax on unappropriated earnings 587,765 400,532 Difference between prior year's ( 136,394) ( 180,570) income tax estimation and assessed results Total current income tax 2,657,688 3,155,919 Deferred income tax: Origination and reversal of temporary differences 1,454,179 1,045,259 Income tax expenses $ 4,111,867 $ 4,201,178

(B) The income tax relating to components of other comprehensive income is as follows: For the years ended December 31, 2013 2012 Changes in fair value on $ 298,871 $ 328,830 available-for-sale financial assets Currency translation differences 8,955 ( 82,363) $ 307,826 $ 246,467

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(19) Costs and expenses by nature B. Reconciliation between income tax expenses and accounting profit For the years ended December 31, For the years ended December 31, 2013 2012 2013 2012 Operating Operating Operating Operating costs expenses Total costs expenses Total Income tax calculated based on profit before tax $ 4,345,500 $ 4,533,008 Employee benefit expenses $ 227,558 $ 8,531,458 $ 8,759,016 $ 165,287 $ 6,122,751 $ 6,288,038 and statutory tax rate Depreciation 1,341,074 191,247 1,532,321 924,798 192,145 1,116,943 Additional 10% tax on unappropriated earnings 587,765 400,532 Amortization - 133,303 133,303 191 70,480 70,671 Effects from items disallowed by tax regulations ( 592,075) ( 408,797) Difference between prior year's inocme tax ( 136,394) ( 180,570) (20) Employee benefit expenses estimation and assessed results For the years ended December 31, Others ( 92,929) ( 142,995) 2013 2012 Income tax expenses $ 4,111,867 $ 4,201,178 Wages and salaries $ 7,998,886 $ 5,654,474 C. Amounts of deferred income tax assets or liabilities as a result of temporary differences are as Labor and health insurance 379,283 276,261 Pension (Note) 197,283 166,155 follows: 2013 Other personnel expenses 183,564 191,148 $ 8,759,016 $ 6,288,038 Recognized in other

Note: Including the pension expense under the defined contribution plans and defined benefit Recognized in comprehensive January 1 profit or loss income December 31 plans. Temporary differences: (21) Income tax - Deferred income tax assets: A. Income tax expenses Unrealized profit from sales $ 661,499 ($ 244,094) $ - $ 417,405 (A) Components of income tax expenses: Unrealized purchase discounts 229,592 ( 140,132) - 89,460 For the years ended December 31, Decline in value of inventories 362,779 75,467 - 438,246 2013 2012 Unrealized provisions 153,979 204,249 - 358,228 Current income tax: Others 96,276 34,121 - 130,397 Current income tax on profits for the year $ 2,206,317 $ 2,935,957 Subtotal 1,504,125 ( 70,389) - 1,433,736 Additional 10% tax on unappropriated earnings 587,765 400,532 - Deferred income tax liabilities: Difference between prior year's ( 136,394) ( 180,570) Investment income from ( 4,004,455) ( 1,381,431) - ( 5,385,886) income tax estimation and assessed results foreign investees Total current income tax 2,657,688 3,155,919 Unrealized exchange gains ( 89,226) ( 2,359) - ( 91,585) Deferred income tax: Currency translation differences - - ( 8,955) ( 8,955) Origination and reversal of temporary differences 1,454,179 1,045,259 Unrealized gain on valuation of ( 496,410) - ( 298,871) ( 795,281) Income tax expenses $ 4,111,867 $ 4,201,178 available-for-sale financial assets

(B) The income tax relating to components of other comprehensive income is as follows: Subtotal ( 4,590,091) ( 1,383,790) ( 307,826) ( 6,281,707) ($ 3,085,966) ($ 1,454,179) ($ 307,826) ($ 4,847,971) For the years ended December 31, Total 2013 2012 Changes in fair value on $ 298,871 $ 328,830 available-for-sale financial assets Currency translation differences 8,955 ( 82,363) $ 307,826 $ 246,467

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2012 Recognized in other Recognized in comprehensive January 1 profit or loss income December 31 Temporary differences: - Deferred income tax assets: Unrealized profit from sales $ 517,496 $ 144,003 $ - $ 661,499 Unrealized purchase discounts 333,289 ( 103,697) - 229,592 Decline in value of inventories 200,010 162,769 - 362,779 Unrealized provisions 145,741 8,238 - 153,979 Others 58,270 38,006 - 96,276 Subtotal 1,254,806 249,319 - 1,504,125 - Deferred income tax liabilities: Investment income from ( 2,772,728) ( 1,231,727) - ( 4,004,455) foreign investees Unrealized exchange gains ( 26,375) ( 62,851) - ( 89,226) Currency translation differences ( 82,363) - 82,363 - Unrealized gain on valuation of ( 167,580) - ( 328,830) ( 496,410) available-for-sale financial assets Subtotal ( 3,049,046) ( 1,294,578) ( 246,467) ( 4,590,091) ($ 1,794,240) ($ 1,045,259) ($ 246,467) ($ 3,085,966) Total D. The Tax Authority has examined the Company’s income tax returns through 2011. E. Unappropriated retained earnings: 2013/12/31 2012/12/31 2012/1/1 Earnings generated in and after 1998 $ 90,066,124 $ 87,540,465 $ 77,642,092

F. Imputation credit account (ICA) and creditable ratio

2013/12/31 2012/12/31 2012/1/1 (A) ICA balance $ 12,919,477 $ 12,345,070 $ 12,143,365

2012 (Actual) 2011 (Actual) (B) Creditable ratio for earnings distribution 16.55% 17.43%

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(22) Earnings per share For the year ended December 31, 2013 Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit for the year $ 21,449,895 748,395 $ 28.66 Diluted earnings per share Assumed conversion of all dilutive - 5,094 potential ordinary shares - employees’ bonus Profit for the year plus assumed $ 21,449,895 753,489 $ 28.47 conversion of all dilutive potential ordinary shares

For the year ended December 31, 2012 Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit for the year $ 22,463,572 752,760 $ 29.84 Diluted earnings per share Assumed conversion of all dilutive - 4,141 potential ordinary shares - employees’ bonus Profit for the year plus assumed $ 22,463,572 756,901 $ 29.68 conversion of all dilutive potential

ordinary shares (23) Operating leases The Company leases offices and parking lots to others under operating lease agreements. The Company recognized rental expenses of $138,897 and $122,791 for the years ended December 31, 2013 and 2012, respectively. Information about the future aggregate minimum lease payments under non-cancellable operating leases is provided in Note 9.

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7. RELATED PARTY TRANSACTIONS (1) Parent and ultimate controlling party The Company’s shares are widely held, so there is no ultimate parent or controlling party. (2) Significant transactions and balances with related parties A. Sales of goods For the years ended December 31, 2013 2012 Sales of goods -Subsidiaries $ 354,879,270 $ 370,189,448 -Associates 84 81,621 $ 354,879,354 $ 370,271,069 The sales prices of transactions with related parties were decided on the basis of the economic environment and market competition in each sales area. The terms of the transactions are due 30 to 180 days after the date of delivery or open account 30 to 60 days. The terms of the above transactions are similar to those for third parties. B. Purchases of goods and services: For the years ended December 31, 2013 2012 Purchases of goods -Subsidiaries $ 2,663,426 $ 2,528,018 -Associates 22,278,146 136,061,239 -Others 15,278 - Purchases of services -Subsidiaries 43,521 2,477 -Associates 39,919 1,178,484 -Others 15,000 19,361 $ 25,055,290 $ 139,789,579

Purchase terms are due 30 to 90 days after the date of acceptance or open account 30 to 60 days, which were similar to those for third parties. C. Notes and trades receivable: 2013/12/31 2012/12/31 2012/1/1 Trades receivable -Subsidiaries $ 65,423,038 $ 66,997,388 $ 52,844,152 -Associates - 5 3,504 $ 65,423,038 $ 66,997,393 $ 52,847,656

The trades receivable arise mainly from sales transactions, and are unsecured in nature and bear no interest.

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D. Trades payable and other items of current liabilities: 2013/12/31 2012/12/31 2012/1/1 Trades payable -Subsidiaries $ 954,815 $ 708,091 $ 442,631 -Associates 35,542 4,882,016 8,625,780 -Others 5,011 - - 995,368 5,590,107 9,068,411

Other items of current liabilities -Subsidiaries 14,327 4,123 162,392 -Associates 9 855,579 778,940 14,336 859,702 941,332 $ 1,009,704 $ 6,449,809 $ 10,009,743

The trades payable arise mainly from purchase transactions, and bear no interest. (3) Key management compensation For the years ended December 31, 2013 2012 Salaries and other short-term employee $ 566,718 $ 574,780 benefits Post-employment benefits 4,421 4,225 $ 571,139 $ 579,005

8. PLEDGED ASSETS

Book Value Pledged assets Item 2013/12/31 2012/12/31 2012/1/1 Purpose Guarantee for import duty, etc. Other non-current assets Pledged time deposits $ 113,514 $ 52,521 $ 150,206 9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS (1) Contingencies A. Lawsuits for infringement of intellectual property rights (A) In May 2007, a US company filed a lawsuit against the Company and its US subsidiary for patent infringement. In January 2012, the Company was ordered by the court to compensate the plaintiff, but the Company has filed with a higher court. The higher court changed the original judgment and the Company finally won the case. Based on the final outcome of the case, the Company claimed from the plaintiff for reimbursement of the litigation fee. In January 2011, the plaintiff, a US company, also filed a lawsuit against the Company and its US subsidiary for patent confirmation, and the lawsuit is currently under investigation.

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(B) Several patentees filed lawsuits or investigations for patent infringement including LAN chip, PCI-Express switch, the patent of Blu-ray, Dynamic voltage scaling function for solid state disk, DDR, FLASH memory, LCD, Bluetooth, BIOS, Image chip, thermal management method and device, Display, Bluetooth HS technology and notebooks, Eee PC, products of Wireless LAN, products of Wireless telecommunication, router with dual channel transmission function, and equipments with Andriod system against the Company. These lawsuits or investigations are currently under investigation in a California court, in a Texas court, in a Delaware court, in a Virginia court and in United States International Trade Commission. The Company cannot presently determine the ultimate outcome of these lawsuits, but has already recognized the possible loss in the books. (C) Several patentees filed lawsuits or investigations for patent infringement including mobile products with switching signals based on the signal strength, products with the image resizing and scanning format conversion, digital image processor, interactive video system, communication switch technique, Tablet PC with user-selectable log in and unlock function, products of Web Storage, products of display technology, products with buffer memory and buffer access, SED hard discs, Windows BitLocker function products, Wireless Router products with antenna connector, radiator of display card, wireless Internet products with monitor functions, Bluetooth and wireless communication products, Padfone series products, NOR Flash and XtraROM chip products, products of auto-rotate for turn on/off functions, GaN LED products, products with UMTS network devices and multi-core ARM processor products against the Company. These lawsuits or investigations are currently under investigation in a Texas court, in a California court, in a Florida court, in a Delaware court, in a Massachusetts court, in a Germany court, in a Shanghai court and in a Taiwan intellectual property court. The Company cannot presently determine the ultimate outcome and effect of these lawsuits. B. Lawsuits for consumer rights In February 2012, consumer F filed a Company lawsuit for GPS and WiFi function being interfered due to the design of PAD case against the Company and its US subsidiary in a Northern California court. The parties involved in the lawsuit have currently reached a compromise, but the Company has not yet fulfilled its obligation. C. In July 2013, a US company N filed a lawsuit against the Company and its US subsidiary for overstated advertising on Wi-Fi router products, unfair competition and violation of FCC regulations. The lawsuit or investigation is currently under investigation in a Northern California court. The Company cannot presently determine the ultimate outcome of this lawsuit, but has already recognized the possible loss in the books. D. A plaintiff filed a criminal with civil suit against the Company and its subdiary, ASMEDIA, for infringement of patents. On August 30, 2012 and April 16, 2013, the Intellectual Property Rights Police Team (IPRP) has searched ASMEDIA office and executed seizure of related evidence. The lawsuit is currently under examination in Taiwan Taipei District Court. ASMEDIA has appointed the attorney to deal with the cases through the legal process and go

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through subsequent related matters and to cooperate with authority investigation. ASMEDIA cannot presently determine the effect, but the Company and ASMEDIA expect the above cases have no material effect on their operating and financial position. (2) Commitments A. To ensure the supply of raw materials, the Company entered into an agreement with a supplier for a guaranteed quantity of materials supply at a discount to market price or at an agreed price. The payment was recognized as prepayment of $0, $0 and $150,667 as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively. B. Operating lease commitments The Company leases offices and parking lots under non-cancellable operating lease agreements. The future aggregate minimum lease payments are as follows: 2013/12/31 2012/12/31 2012/1/1 Less than 1 year $ 89,518 $ 196,276 $ 207,981 Between 1 and 2 years 74,890 72,126 131,496 Between 2 and 3 years 69,027 63,539 - Between 3 and 4 years 65,569 63,539 -

Over 4 years - 63,539 - 10. SIGNIFICANT DISASTER LOSS: None. 11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE: None. 12. OTHERS (1) Capital management The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the liability ratio. This ratio is calculated as total liabilities by total assets. Total liabilities is calculated as “current liabilities plus non-current liabilities” as shown in the separate balance sheet. During 2013, the Company’s strategy was to maintain the liability ratio within reasonable security range, which was unchanged from 2012. The liability ratios are as follows: 2013/12/31 2012/12/31 2012/1/1 Total liabilities $ 85,705,016 $ 81,353,741 $ 65,942,903 Total equity 135,199,502 125,997,474 114,836,746 Total assets $ 220,904,518 $ 207,351,215 $ 180,779,649 Liability ratio 38.80% 39.23% 36.48%

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(2) Financial instruments A. Fair value information of financial instruments The carrying values of financial instruments measured at non fair value (including cash and cash equivalents, notes/trades receivable, other receivables, refundable deposits, notes/trades payable, other payables - accrued expenses, other current liabilities and guarantee deposits received) are reasonably approximate to the fair values. Please refer to Note 12(3) for the fair value information of financial instruments measured at fair value. B. Financial risk management policies (A) The Company’s operating activities expose the Company to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial position and financial performance. The Company uses derivative financial instruments to hedge certain risk exposures. Please refer to Notes 6(2) and 6(9). (B) The Company’s key financial plans are all reviewed by the board of directors under the related principles and internal control system. When executing the financial plans, the Company’s treasury departments will follow the financial operating procedures in accordance with the overall financial risk management and proper segregation of duties. C. Nature and degree of significant financial risks (A) Market risk Foreign exchange risk a. The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. b. Management has set up a policy to require the organization to manage the foreign exchange risk against the functional currency. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, the Company uses forward exchange contracts to hedge. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency. c. The Company has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. d. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations are as follows:

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2013/12/31 Foreign Sensitivity Analysis currency Extent Effect on Effect on other amount Exchange Book value of profit comprehensive (In dollars) rate (NTD) variation or loss income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD $ 2,265,329,364 29.805 $ 67,518,142 1% $ 675,181 $ - Non-monetary items USD:NTD 1,222,496,369 29.805 36,436,504 1% 364,365 - Financial liabilities Monetary items USD:NTD 2,256,901,917 29.805 67,266,962 1% 672,670 - 2012/12/31 Foreign Sensitivity Analysis currency Extent Effect on Effect on other amount Exchange Book value of profit comprehensive (In dollars) rate (NTD) variation or loss income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD $ 2,344,550,492 29.04 $ 68,085,746 1% $ 680,857 $ - Non-monetary items USD:NTD 860,387,072 29.04 24,985,641 1% 249,856 - Financial liabilities Monetary items USD:NTD 2,247,038,314 29.04 65,253,993 1% 652,540 - 2012/1/1 Foreign Sensitivity Analysis currency Extent Effect on Effect on other amount Exchange Book value of profit comprehensive (In dollars) rate (NTD) variation or loss income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD $ 2,069,185,553 30.275 $ 62,644,593 1% $ 626,446 $ - Non-monetary items USD:NTD 641,027,727 30.275 19,407,114 1% 194,071 - Financial liabilities Monetary items USD:NTD 1,692,874,003 30.275 51,251,760 1% 512,518 -

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Price risk a. The Company is exposed to equity securities price risk because of investments held by the Company and classified on the separate balance sheet either as available-for-sale or at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company. b. The prices of the Company’s investments in equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased by 1% with all other variables held constant, other comprehensive income - unrealized gain on valuation of available-for-sale financial assets would have increased by $346,337 and $105,840, respectively. The Company is exposed to equity securities price risk because of investments held by the Company classified as available-for-sale financial assets or financial assets at fair value through profit or loss at the separate balance sheet. The Company is not exposed to commodity price risk. To manage equity securities price risk, the Company diversifies its investment portfolio in accordance with the limits set by the Company. Interest rate risk The Company analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Company calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions. The Company expects no significant interest rate risk would arise. Credit risk a. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Company’s credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board of directors. The utilization of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. For banks and financial institutions, only those with a rating of “A” class above as evaluated by an independent party are accepted as counterparties. b. No credit limits were exceeded during 2013 and 2012, and management does not expect any significant losses from non-performance by these counterparties.

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c. The credit quality information of financial assets that are neither past due nor impaired, the aging analysis of financial assets that were past due but not impaired and the individual analysis of financial assets that had been impaired is provided in the statement for each type of financial assets as described in Note 6. (B) Liquidity risk a. Cash flow forecasting is performed in the operating entities of the Company and aggregated by the Company treasury to monitor rolling forecasts of the Company’s liquidity requirements and ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom at all times. Such forecasting takes into consideration the Company’s cash flow plans and compliance with internal balance sheet ratio targets. b. The Company’s treasury invests surplus cash in demand deposits, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. At December 31, 2013, December 31, 2012, and January 1, 2012, the Company held financial assets at fair value through profit or loss of $7,537,906, $7,703,767 and $9,715,912, respectively, that are expected to readily generate cash inflows for managing liquidity risk. c. The table below analyses the Company’s non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. 2013/12/31

Less than 1 Between 1 Between 2 year and 2 years and 3 years Over 3 years Total Non-derivative financial liabilities: Notes and trades payable $ 53,931,854 $ - $ - $ - $ 53,931,854 Other payables 20,143,109 - - - 20,143,109 - accrued expenses Other financial liabilities 10,591 - - - 10,591

2012/12/31

Less than 1 Between 1 Between 2 year and 2 years and 3 years Over 3 years Total Non-derivative financial liabilities: Notes and trades payable $ 57,303,119 $ - $ - $ - $ 57,303,119 Other payables 14,265,110 - - - 14,265,110 - accrued expenses Other financial liabilities 71,602 - - - 71,602

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2012/1/1 Less than 1 Between 1 Between 2 year and 2 years and 3 years Over 3 years Total Non-derivative financial liabilities: Notes and trades payable $ 46,167,363 $ - $ - $ - $ 46,167,363 Other payables 12,354,760 - - - 12,354,760 - accrued expenses Derivative financial liabilities: Forward exchange 32,695 - - - 32,695 contracts d. The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different. (3) Fair value estimation A. The table below analyses financial instruments measured at fair value, by valuation method. The different levels have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 3: Inputs for the asset or liability that are not based on observable market data. The following table presents the Company’s financial assets and liabilities that are measured at fair value. 2013/12/31 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Open-end funds $ 7,461,838 $ - $ - $ 7,461,838 Convertible bonds 76,068 - - 76,068 Available-for-sale financial assets 34,612,485 20,880 372 34,633,737 $ 42,150,391 $ 20,880 $ 372 $ 42,171,643 2012/12/31 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Open-end funds $ 7,703,767 $ - $ - $ 7,703,767 Forward exchange contracts - 5,198 - 5,198 Available-for-sale financial assets 10,563,166 20,423 373 10,583,962 $ 18,266,933 $ 25,621 $ 373 $ 18,292,927

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2012/1/1 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Open-end funds $ 9,623,062 $ - $ - $ 9,623,062 Convertible bonds 92,850 - - 92,850 Forward exchange contracts - 21,391 - 21,391 Available-for-sale financial assets 7,343,131 44,671 373 7,388,175 $ 17,059,043 $ 66,062 $ 373 $ 17,125,478 Financial liabilities: Financial liabilities at fair value through profit or loss Forward exchange contracts $ - $ 32,695 $ - $ 32,695 B. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Company is the closing price. These instruments are included in level 1. Instruments included in level 1 comprise primarily equity instruments and debt instruments classified as financial assets/financial liabilities at fair value through profit or loss or available-for-sale financial assets. C. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. D. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. E. Specific valuation techniques used to value financial instruments include: (A) Quoted market prices or dealer quotes for similar instruments. (B) The fair value of forward exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value. (C) Other techniques, such as Price-Earnings ratio or Price-Book ratio from the recent same industry data, are used to determine fair value for the remaining financial instruments. F. All of the derivative financial instruments whose fair value estimates are included in level 2.

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G. The following table presents the changes in level 3 instruments for the years ended December 31, 2013 and 2012. For the years ended December 31, 2013 2012 At January 1 $ 373 $ 373 Capital reduction ( 1) - At December 31 $ 372 $ 373

13. OPERATING SEGMENT INFORMATION: Not applicable. 14. INITIAL APPLICATION OF IFRSs These separate financial statements are the first separate financial statements prepared by the Company in accordance with the IFRSs. The Company has adjusted the amounts as appropriate that are reported in the previous R.O.C. GAAP separate financial statements to those amounts that should be presented under IFRSs in the preparation of the opening IFRS balance sheet. Information about exemptions elected by the Company, exceptions to the retrospective application of IFRSs in relation to initial application of IFRSs, and how it affects the Company’s financial position, financial performance and cash flows in transition from R.O.C. GAAP to the IFRSs is set out below: (1) Exemptions elected by the Company A. Business combinations The Company has elected not to apply the requirements in IFRS 3, “Business Combinations”, retrospectively to business combinations that occurred prior to the date of transition to IFRSs (the transition date). This exemption also applies to the Company’s previous acquisitions of investments in associates. B. Share-based payment transactions The Company has elected not to apply the requirements in IFRS 2, “Share-based Payment”, retrospectively to various share-based payment transactions that were vested arising from share-based payment transactions prior to the transition date. C. Deemed cost For property, plant and equipment that were revalued under R.O.C. GAAP before the transition date, the Company has elected to use the revalued amount under R.O.C. GAAP at the date of the revaluation as the “deemed cost” of these assets under IFRSs. D. Employee benefits The Company has elected to recognize all cumulative actuarial gains and losses relating to all employee benefit plans in “retained earnings” at the transition date, and to disclose the information of present value of defined benefit obligation, fair value of plan assets, gain or loss on plan assets and experience adjustments under the requirements of paragraph 120A (P), IAS 19, “Employee Benefits”, based on their prospective amounts for financial periods from the transition date.

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E. Cumulative translation differences The Company has elected to reset the cumulative translation differences arising on the translation of the financial statements of foreign operations under R.O.C. GAAP to zero at the transition date, and to deal with translation differences arising subsequent to the transition date in accordance with IAS 21, “The Effects of Changes in Foreign Exchange Rates”. F. Compound financial instruments The Company has elected not to segregate between liability components and equity components of compound financial instruments whose liability components were no longer outstanding at the transition date. G. Borrowing costs The Company has elected to apply the transitional provisions in paragraphs 27 and 28 of IAS 23, “Borrowing Costs”, amended in 2007 and apply IAS 23 from the transition date. (2) Exceptions to the retrospective application of IFRSs specified in IFRS 1 applied to the Company are set out below: A. Accounting estimates Accounting estimates made under IFRSs on January 1, 2012 are consistent with those made under R.O.C. GAAP on that date. B. Derecognition of financial assets and financial liabilities The derecognition requirements in IAS 39, “Financial Instruments: Recognition and Measurement” shall be applied prospectively to transactions occurring on or after January 1, 2004. C. Hedge accounting Hedge accounting can only be applied prospectively to transactions that qualify for hedge accounting in accordance with IAS 39 from the date of transition to IFRSs. Hedging relationship should not be designated retrospectively, and written documentation relating to hedge accounting should not be made retrospectively, either. Therefore, under IFRS 1, only a hedging relationship that satisfied the hedge accounting criteria on January 1, 2012 can be reflected as hedge in the Company’s opening IFRS financial statements. D. Non-controlling interest Requirements of IAS 27 (amended in 2008) that shall be applied prospectively are as follows: (A) Requirements concerning total comprehensive income (loss) attributed to owners of the parent and non-controlling interest, even which results in a loss to non-controlling interest; (B) Requirements that change in interest ownership of the parent in a subsidiary while control is retained is accounted for as an equity transaction with the parent; and (C) Requirements concerning the parent’s loss of control over a subsidiary. (3) Requirement to reconcile from R.O.C. GAAP to IFRSs at the time of initial application IFRS 1 requires that entity should make reconciliation for equity, comprehensive income and cash flows for the comparative periods. The Company’s initial application of IFRSs has no significant effect on cash flows from operating activities, investing activities and financing activities. Reconciliation for equity and comprehensive income for the comparative periods as to transition from R.O.C. GAAP to IFRSs is shown below:

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A. Reconciliation for equity on January 1, 2012: Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current assets Cash and cash equivalents $ 16,608,239 $ - $ 16,608,239 Financial assets at fair value through profit or loss - 9,737,303 - 9,737,303 current Available-for-sale financial assets - current 274,792 - 274,792 Trades receivable 2,669,758 - 2,669,758 Notes and trades receivable - related parties 52,847,656 - 52,847,656 Other receivables 8,251,210 - 8,251,210 Inventories 20,149,506 - 20,149,506 Prepayments 1,364,840 - 1,364,840 Other current assets 929,392 ( 907,554) 21,466 (A) ( 372) (B) Total current assets 112,832,696 ( 907,926) 111,924,770 Non-current assets Available-for-sale financial assets - non-current 7,068,339 45,044 7,113,383 (B) Financial assets measured at cost - non-current 107,579 ( 44,720) 62,859 (B) Investments accounted for under equity method 58,384,558 4,532 56,079,091 (B) ( 34,461) (C) 12,752 (D) ( 89,633) (E) ( 2,156,976) (F) ( 41,681) (K) Property, plant and equipment 3,667,758 - 3,667,758 Intangible assets 123,425 - 123,425 Deferred income tax assets - 907,554 1,254,806 (A) 11,878 (C) 95,021 (D) 240,353 (G) Other non-current assets 553,557 - 553,557 Total non-current assets 69,905,216 ( 1,050,337) 68,854,879 Total assets $ 182,737,912 ($ 1,958,263) $ 180,779,649

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Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current liabilities Financial liabilities at fair value through profit or $ 32,695 $ - $ 32,695 loss - current Notes and trades payable 37,098,952 - 37,098,952 Trades payable - related parties 9,068,411 - 9,068,411 Other payables - accrued expenses 13,244,609 69,869 12,354,760 (C) ( 959,718) (H) Current income tax liabilities 1,612,235 - 1,612,235 Provisions for liabilities - current - 959,718 959,718 (H) Other current liabilities 632,972 - 632,972 Total current liabilities 61,689,874 69,869 61,759,743 Non-current liabilities Deferred income tax liabilities 2,808,698 ( 5) 3,049,046 (B) 240,353 (G) Other non-current liabilities 3,291,090 ( 2,156,976) 1,134,114 (F) Total non-current liabilities 6,099,788 ( 1,916,628) 4,183,160 Total liabilities 67,789,662 ( 1,846,759) 65,942,903 Equity Share capital - common shares 7,527,603 - 7,527,603 Capital surplus 4,662,555 ( 372,080) 4,290,502 (I) 27 (K) Retained earnings Legal reserve 21,806,955 - 21,806,955 Special reserve - 625,824 699,350 (E) 73,526 (J) Unappropriated retained earnings 77,293,325 ( 92,452) 77,642,092 (C) 107,773 (D) 372,080 (I) ( 38,634) (K) Other equity 3,657,812 4,489 2,870,244 (B) ( 715,457) (E) ( 73,526) (J) ( 3,074) (K) Total equity 114,948,250 ( 111,504) 114,836,746 Total liabilities and equity $ 182,737,912 ($ 1,958,263) $ 180,779,649

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B. Reconciliation for equity on December 31, 2012: Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current assets Cash and cash equivalents $ 21,720,717 $ - $ 21,720,717 Financial assets at fair value through profit or loss - 7,708,965 - 7,708,965 current Available-for-sale financial assets - current 307,471 - 307,471 Trades receivable 2,903,549 - 2,903,549 Notes and trades receivable - related parties 66,997,393 - 66,997,393 Other receivables 20,838 - 20,838 Inventories 27,735,987 - 27,735,987 Prepayments 3,044,982 - 3,044,982 Other current assets 652,484 ( 638,344) 13,768 (A) ( 372) (B) Total current assets 131,092,386 ( 638,716) 130,453,670 Non-current assets Available-for-sale financial assets - non-current 10,255,695 20,796 10,276,491 (B) Financial assets measured at cost - non-current 82,859 ( 20,000) 62,859 (B) Investments accounted for under equity method 62,789,640 ( 2,834) 60,331,429 (B) ( 35,435) (C) 19,603 (D) ( 89,633) (E) ( 2,273,191) (F) ( 76,721) (K) Property, plant and equipment 4,002,107 - 4,002,107 Intangible assets 110,730 - 110,730 Deferred income tax assets - 638,344 1,504,125 (A) 13,112 (C) 183,911 (D) 668,758 (G) Other non-current assets 609,804 - 609,804 Total non-current assets 77,850,835 ( 953,290) 76,897,545 Total assets $ 208,943,221 ($ 1,592,006) $ 207,351,215

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Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current liabilities Notes and trades payable $ 51,713,012 $ - $ 51,713,012 Trades payable - related parties 5,590,107 - 5,590,107 Other payables - accrued expenses 15,094,029 77,129 14,265,110 (C) ( 906,048) (H) Current income tax liabilities 2,462,081 - 2,462,081 Provisions for liabilities - current - 906,048 906,048 (H) Other current liabilities 867,100 - 867,100 Total current liabilities 75,726,329 77,129 75,803,458 Non-current liabilities Deferred income tax liabilities 3,921,291 42 4,590,091 (B) 668,758 (G) Other non-current liabilities 3,233,383 ( 2,273,191) 960,192 (F) Total non-current liabilities 7,154,674 ( 1,604,391) 5,550,283 Total liabilities 82,881,003 ( 1,527,262) 81,353,741 Equity Share capital - common shares 7,527,603 - 7,527,603 Capital surplus 4,669,822 ( 372,080) 4,305,220 (I) 7,478 (K) Retained earnings Legal reserve 23,464,771 - 23,464,771 Special reserve - 625,824 699,350 (E) 73,526 (J) Unappropriated retained earnings 87,142,815 ( 92,452) 87,540,465 (C) 107,773 (D) 372,080 (I) ( 30,993) (K) 41,242 Note Other equity 3,257,207 ( 2,363) 2,460,065 (B) ( 715,457) (E) ( 73,526) (J) ( 5,796) (K) Total equity 126,062,218 ( 64,744) 125,997,474 Total liabilities and equity $ 208,943,221 ($ 1,592,006) $ 207,351,215 Note: The adjustment represents the net effect resulting from the reconciliation of separate statement of comprehensive income with material differences for the year ended December 31, 2012.

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C. Reconciliation for comprehensive income for the year ended December 31, 2012: Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Operating revenue $ 375,118,873 $ - $ 375,118,873 Operating costs ( 350,312,778) 389 ( 350,312,389) (C) Net operating margin 24,806,095 389 24,806,484 Unrealized profit from sales ( 324,190) - ( 324,190) Gross profit 24,481,905 389 24,482,294 Operating expenses Selling expenses ( 2,814,030) ( 1,484) ( 2,815,514) (C) General and administrative expenses ( 1,700,514) ( 957) ( 1,701,471) (C) Research and development expenses ( 5,194,895) ( 5,207) ( 5,200,102) (C) Operating profit 14,772,466 ( 7,259) 14,765,207 Non-operating revenues and expenses Other income 619,124 - 619,124 Other gains (losses) 1,832,884 ( 64) 1,739,906 (B) ( 92,914) (K) Finance costs ( 5) - ( 5) Share of profit of subsidiaries, associates and joint 9,489,163 ( 25) 9,540,518 (B) ventures accounted for under equity method ( 975) (C) 6,851 (D) 45,504 (K) Profit before income tax 26,713,632 ( 48,882) 26,664,750 Income tax expenses ( 4,291,302) 1,234 ( 4,201,178) (C) 88,890 (D) Profit for the year $ 22,422,330 $ 41,242 $ 22,463,572 Other comprehensive income Financial statements translation differences of ($ 915,962) foreign operations Unrealized gain on valuation of 3,288,300 available-for-sale financial assets Share of other comprehensive income of subsidiaries, ( 2,528,409) associates and joint ventures accounted for under equity method Income tax relating to components of other ( 246,467) comprehensive income Other comprehensive income for the year ($ 402,538) Total comprehensive income for the year $ 22,061,034 Reasons for reconciliation are outlined below: (A) In accordance with current accounting standards in R.O.C., a deferred tax asset or liability should, according to the classification of its related asset or liability, be classified as current or noncurrent. However, a deferred tax asset or liability that is not related to an asset or liability for financial reporting, should be classified as current or noncurrent according to the expected time period to realize or settle a deferred tax asset or liability. However, under IAS 1, “Presentation of Financial Statements”, an entity should not classify a deferred tax asset or liability as current. (B) In accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” before amendment on July 7, 2011, unlisted stocks and emerging stocks held by the Company were measured at cost and recognized as “Financial assets

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measured at cost”. However, in accordance with IAS 39, “Financial Instruments: Recognition and Measurement”, investments in equity instruments without an active market but with reliable fair value measurement (i.e. the variability in the range of reasonable fair value estimates is insignificant for that instruments, or the probability of the estimates within the range can be reasonably assessed and used in estimating fair value) should be measured at fair value. (C) The current accounting standards in R.O.C. do not specify the rules on recognition of the cost of accumulated compensated absences. The Company recognized such costs as expenses upon actual payment. However, IAS 19, “Employee Benefits” requires that the costs of accumulated compensated absences should be accrued as expenses at the reporting date. (D) Regarding tax rates that shall apply to the deferred tax assets or liabilities associated with unrealised gains or losses arising from transactions between parent company and subsidiaries by buyer tax rate or seller tax rate, the current accounting standards in R.O.C. do not specify the rules for this issue; while, the Company adopts seller tax rate for computation. However, under IAS 12, ‘Income Taxes’, temporary differences in the separate financial statements are determined by comparing the carrying amounts of assets and liabilities in those statements and applicable taxation basis. The Company’s taxation basis is determined by reference to the Company’s income tax returns. Accordingly, buyer tax rate shall apply to the deferred tax assets or liabilities in the separate financial statements. (E) The Company elected to use the exemption on currency translation differences for all foreign operations. Currency translation differences that existed at the date of transition to IFRSs are deemed to be zero and reclassified to unappropriated retained earnings after considering the tax effects, and reversed the same account to special reserve at the same time in accordance with IFRS 1 exemption and Jin-Guan-Zheng-Shen-Zi Order No. 1010012865 of the Financial Supervisory Commission, dated April 6, 2012. (F) The Company reclassified the unrealized inter-company transactions as investments accounted for under equity method as the use of the original accounts had been discontinued as announced by the authority. (G) Deferred income tax assets and liabilities cannot be offset as they do not meet the criteria of offsetting assets and liabilities under IAS 12, “Income Taxes”. Thus, the Company reclassified deferred income tax assets and liabilities at the transition date. (H) The classification of some accounts is different between current accounting standards in R.O.C. and IFRSs. These reclassifications include partial accrued expenses needed to be applied to new accounts. (I) In accordance with the IFRSs Frequently Asked Questions (FAQ) issued by the Taiwan Stock Exchange dated April 9, 2012, the capital surplus recognized from a change in the holding percentage of investments accounted for under equity method is reclassified to unappropriated retained earnings.

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(J) In accordance with current accounting standards in R.O.C., the Company revalued its property, plant and equipment. Under IFRSs, the Company elected to use the current revaluation at the date of the revaluation as the deemed cost at the date of the revaluation and accordingly, reclassified the capital surplus from asset revaluation to unappropriated retained earnings, and reversed the same amount to special reserve at the same time in accordance with IFRS 1 exemption and Jin-Guan-Zheng-Shen-Zi Order No. 1010012865 of the Financial Supervisory Commission, dated April 6, 2012. (K) Other adjustment items include adoption of IFRSs resulting to adjustment on investments accounted for under equity method, election to recognize all cumulative actuarial gains and losses on defined benefit plan at the date of transition to IFRSs, recognition of lease payments as an expense on a straight-line basis over the lease term, and recognition of long-term employee benefits expense over the service period other than pension expense. D. Major adjustments for the separate statement of cash flows for the year ended December 31, 2012: (A) Under R.O.C. GAAP, payment of interest and receipt of interest and dividend are both included in cash flows from operating activities. However, under IFRSs, receipt of dividend is classified as cash flows from investing activities based on its purpose which is for investment rewards. (B) The transition of R.O.C. GAAP to IFRSs has no effect on the Company’s cash flows reported. (C) The reconciliation between R.O.C. GAAP and IFRSs has no net effect on the Company’s cash flows reported.

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206 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 Independent Auditors’ Report

To the Board of Directors and Shareholders of

ASUSTEK COMPUTER INC.:

We have audited the accompanying consolidated balance sheets of ASUSTEK COMPUTER INC. and its subsidiaries as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2013 and 2012. 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 did not audit the financial statements of certain consolidated subsidiaries and investments accounted for under equity method, which statements reflect total assets of $31,695,458,000, $51,164,551,000 and $38,840,143,000 (including investments accounted for under equity method amounting to $214,397,000, $23,282,498,000 and $22,617,355,000), constituting 10.71%, 19.09% and 17.36% of consolidated total assets as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively, total operating revenues of $81,300,970,000 and $82,319,404,000, constituting 17.55% and 18.35% of consolidated operating revenues for the years ended December 31, 2013 and 2012, respectively, and the share of profit and other comprehensive income of associates and joint ventures accounted for under equity method of $1,188,573,000 and $928,157,000 for the years ended December 31, 2013 and 2012, respectively. The financial statements of these investee companies were audited by other auditors whose reports thereon have been furnished to us and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements and information disclosed relative to these consolidated subsidiaries and investments accounted for under equity method, is based solely on the reports of other auditors.

We conducted our audits in accordance with the “Regulations Governing the Examination of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about

~ 2 ~ WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 207 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 by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the consolidated financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of ASUSTEK COMPUTER INC. and its subsidiaries as of December 31, 2013, December 31, 2012 and January 1, 2012, and the results of their operations and their cash flows for the years ended December 31, 2013 and 2012, in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Financial Reporting Standards, International Accounting Standards and IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

We have also audited the separate financial statements of ASUSTEK COMPUTER INC. (not presented herein) as of December 31, 2013, December 31, 2012 and January 1, 2012 and for the years ended December 31, 2013 and 2012. In our opinion dated March 27, 2014, we expressed an unqualified opinion with an explanatory paragraph thereon.

PricewaterhouseCoopers, Taiwan March 27, 2014

The accompanying consolidated financial statements are not intended to present the financial position, and results of operations and cash flows in accordance with accounting principles in countries and jurisdiction other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such consolidated financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2013, DECEMBER 31, 2012 AND JANUARY 1, 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

DECEMBER 31, 2013 DECEMBER 31, 2012 JANUARY 1, 2012 ASSETS Notes AMOUNT % AMOUNT % AMOUNT % Current assets

Cash and cash equivalents 6(1) $ 66,524,194 23 $ 49,608,893 19 $ 41,197,108 18

Financial assets at fair value through 6(2) 10,346,708 4 9,271,241 4 11,610,195 5

profit or loss - current

Available-for-sale financial assets - 6(3) 253,181 - 342,167 - 333,923 -

current

Derivative financial assets for hedging - 6(5) 43,387 - 116,334 - 1,354,470 1

current

Notes receivable 6(6) 7,024,036 2 6,353,146 2 5,996,132 3

Trades receivable 6(6) and 7 68,074,332 23 59,834,228 22 43,179,165 19

Other receivables 7 841,437 - 758,630 - 9,096,576 4

Inventories 6(7) 77,329,012 26 80,491,424 30 57,897,547 26

Prepayments 9 7,508,547 3 6,822,368 3 4,266,674 2

Other current assets 8 919,185 - 673,244 - 604,051 -

Total current assets 238,864,019 81 214,271,675 80 175,535,841 78

Non-current assets

Available-for-sale financial assets - 6(3) and 34,924,464 12 10,621,989 4 7,561,495 3

non-current 6(8)

Financial assets carried at cost - 6(4) 161,641 - 144,921 - 184,572 -

non-current

Investments accounted for under equity 6(8) 360,189 - 23,453,757 9 22,706,359 10

method

Property, plant and equipment 6(9) and 8 10,746,683 3 10,764,132 4 10,068,653 5

Intangible assets 6(10) 2,159,156 1 2,023,127 1 2,064,201 1

Deferred income tax assets 6(26) 6,689,548 2 5,146,877 2 4,061,133 2

Other non-current assets 6(11), 6(15) 2,167,055 1 1,606,899 - 1,548,018 1

and 8

Total non-current assets 57,208,736 19 53,761,702 20 48,194,431 22

TOTAL ASSETS $ 296,072,755 100 $ 268,033,377 100 $ 223,730,272 100

(Continued)

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209 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2013, DECEMBER 31, 2012 AND JANUARY 1, 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

DECEMBER 31, 2013 DECEMBER 31, 2012 JANUARY 1, 2012 LIABILITIES AND EQUITY Notes AMOUNT % AMOUNT % AMOUNT % Current liabilities Short-term borrowings 6(12) $ 4,876,624 2 $ 3,739,942 2 $ 2,820,856 1 Financial liabilities at fair value through 6(13) 372,190 - 612,093 - 37,052 - profit or loss - current Derivative financial liabilities for 6(5) 278,384 - 408,375 - - - hedging - current Notes and trades payable 65,226,673 22 58,425,976 22 44,480,506 20 Notes and trades payable - related parties 7 107,561 - 4,972,758 2 8,681,583 4 Other payables - accrued expenses 6(19) and 7 40,532,513 14 30,546,661 11 22,152,218 10 Current income tax liabilities 6(26) 4,039,294 1 3,745,015 1 2,683,337 1 Provisions for liabilities - current 6(16) and 9 32,449,433 11 27,408,156 10 17,727,815 8 Receipts in advance 518,024 - 1,628,817 1 2,513,982 1 Current portion of long-term borrowings 6(14) 301,354 - 801,283 - 983,938 - Other current liabilities 7 2,393,199 1 2,014,003 1 1,352,781 1 Total current Liabilities 151,095,249 51 134,303,079 50 103,434,068 46 Non-current liabilities Long-term borrowings 6(14) 1,200,294 1 1,027,993 - 834,498 - Deferred income tax liabilities 6(26) 6,568,843 2 4,736,723 2 3,195,722 2 Other non-current liabilities 236,885 - 177,927 - 203,608 - Total non-current liabilities 8,006,022 3 5,942,643 2 4,233,828 2 Total liabilities 159,101,271 54 140,245,722 52 107,667,896 48 Equity attributable to shareholders of the parent Share capital - common shares 6(17) 7,427,603 3 7,527,603 3 7,527,603 3 Capital surplus 6(18) 4,452,237 1 4,305,220 1 4,290,502 2 Retained earnings 6(15), 6(19) and 6(26) Legal reserve 25,707,004 9 23,464,771 9 21,806,955 10 Special reserve 699,350 - 699,350 - 699,350 - Unappropriated retained earnings 90,066,124 30 87,540,465 33 77,642,092 35 Other equity 6(3), 6(5), 6,847,184 3 2,460,065 1 2,870,244 1 6(20) and 6(26) Total equity attributable to shareholders 135,199,502 46 125,997,474 47 114,836,746 51 of the parent Non-controlling interest 1,771,982 - 1,790,181 1 1,225,630 1 Total equity 136,971,484 46 127,787,655 48 116,062,376 52 TOTAL LIABILITIES AND EQUITY $ 296,072,755 100 $ 268,033,377 100 $ 223,730,272 100

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 27, 2014.

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210 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT EARNINGS PER SHARE DATA)

FOR THE YEARS ENDED DECEMBER 31, 2013 2012 Items Notes AMOUNT % AMOUNT % Operating revenue 6(21) and 7 $ 463,286,507 100 $ 448,684,621 100 Operating costs 6(7), 6(15), 6(19), 6(24), ( 403,316,442 ) ( 87 ) ( 387,566,934) ( 86) 6(25), 6(28) and 7 Gross profit 59,970,065 13 61,117,687 14 Operating expenses 6(11), 6(15), 6(19), 6(24), 6(25), 6(28), 7 and 9 Selling expenses ( 21,906,256 ) ( 5 ) ( 24,429,068) ( 6) General and administrative expenses ( 7,261,486 ) ( 2 ) ( 6,311,286) ( 1) Research and development expenses ( 10,966,313 ) ( 2 ) ( 8,545,473) ( 2) Total operating expenses ( 40,134,055 ) ( 9 ) ( 39,285,827) ( 9) Operating profit 19,836,010 4 21,831,860 5 Non-operating income and expenses Other income 6(22) 1,713,743 1 944,432 - Other gains (losses) 6(2), 6(8), 6(13) and 5,256,646 1 2,840,464 1 6(23) Finance costs ( 352,266 ) - ( 87,587) - Share of profit of associates and joint ventures 6(8) 571,969 - 1,534,044 - accounted for under equity method Total non-operating income and expenses 7,190,092 2 5,231,353 1 Profit before income tax 27,026,102 6 27,063,213 6 Income tax expense 6(26) ( 5,494,438 ) ( 1 ) ( 4,526,035) ( 1) Profit for the year $ 21,531,664 5 $ 22,537,178 5 Other comprehensive income Financial statements translation differences of 6(20) $ 797,850 - ( $ 1,128,920) - foreign operations Unrealized gain on valuation of 6(3) and 6(20) 3,193,282 1 3,276,123 1 available-for-sale financial assets Cash flow hedges 6(5) and 6(20) 57,044 - ( 1,646,511) ( 1) Actuarial gain on defined benefit plan 6(15) ( 6,770 ) - 11,558 - Share of other comprehensive income of 6(8) and 6(20) 617,033 - ( 618,524) - associates and joint ventures accounted for under equity method Income tax relating to the components of 6(20) and 6(26) ( 275,490 ) - ( 297,580) - other comprehensive income Other comprehensive income for the year $ 4,382,949 1 ( $ 403,854) - Total comprehensive income for the year $ 25,914,613 6 $ 22,133,324 5 Profit attributable to: Shareholders of the parent $ 21,449,895 5 $ 22,463,572 5 Non-controlling interest 81,769 - 73,606 - $ 21,531,664 5 $ 22,537,178 5 Total comprehensive income attributable to: Shareholders of the parent $ 25,826,521 6 $ 22,061,034 5 Non-controlling interest 88,092 - 72,290 - $ 25,914,613 6 $ 22,133,324 5

Earnings per share (In dollars) 6(27) Basic earnings per share $ 28.66 $ 29.84 Diluted earnings per share $ 28.47 $ 29.68

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 27, 2014.

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) ) ) ) ) )

- - -

2,965

403,854 209,783 224,501 492,261 200,974 106,291 4,382,949 2,525,987 10,915,024 22,537,178 14,302,445 21,531,664 116,062,376 127,787,655 127,787,655 136,971,484 Total equity Total

$ $ $ $ ( ( ( ( ( (

) )

------

- 1,316 6,323

73,606 81,769 492,261 106,291 Non 1,225,630 1,790,181 1,790,181 1,771,982 interest controlling

$ $ $ $

( (

) ) ) ) )

- - - - -

2,965 402,538 209,783 224,501 200,974 4,376,626 2,525,987 Total 10,915,024 22,463,572 14,302,445 21,449,895 114,836,746 125,997,474 125,997,474 135,199,502

$ $ $ $

( ( ( ( (

)

------

hares s 2,525,987 2,525,987 Treasury

$ $ $ $

(

) ) ) )

------on

of

57,044 (loss) 292,041 292,041 234,997

hedges 1,646,511 1,354,470 effective cash cash flow portion ain

$ $ $ $ G ( ( ( (

------

for

-

financial

assets 1,515,774 2,964,998 4,480,772 4,480,772 2,872,802 7,353,574 gain on

Unrealized

valuation of Other Other equity sale available $ $ $ $

) ) ) )

------

271,393 foreign foreign 1,728,666 1,728,666 1,728,666 1,457,273 Financial of the parent the of operations statements translation

differences of of differences $ $ $ $ ( ( ( (

) ) ) ) ) ) ~

7 ------INC. AND SUBSIDIARIESAND INC. ~

shareholders 7,641 10,493 1,657,816 2,242,233 2,369,065 retained 77,642,092 10,915,024 22,463,572 87,540,465 87,540,465 14,302,445 21,449,895 90,066,124 earnings STATEMENTS OF CHANGES IN EQUITY STATEMENTS nappropriated

$ $ $ $ U ( ( ( ( ( (

YEARS ENDED DECEMBER2012 AND 31, 2013 ------

arnings e ASUSTEK ASUSTEK COMPUTER Equity attributableEquity to 699,350 699,350 699,350 699,350 reserve Special

See of report independent accountants dated 27,March 2014. $ $ $ $ FOR THE CONSOLIDATED

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (EXPRESSEDTHOUSANDS IN TAIWAN OF NEW Retained Retained

------The The accompanying notes are integral partan these of consolidated financial statements. 1,657,816 2,242,233 21,806,955 23,464,771 23,464,771 25,707,004

Legal reserve $ $ $ $

)

------

5,614 2,965 20,332 20,332

209,783 224,501 200,974 224,271 Others

$ $ $ $ (

surplus )

------

Capital 56,922 Share Share 4,284,888 4,284,888 4,284,888 4,227,966 premium

$ $ $ $ (

)

------

100,000 ommon ommon shares 7,527,603 7,527,603 7,527,603 7,427,603 C

$ $ $ $ (

cember cember 31, 2012

December

controlling controlling

- -

year year rehensive income (Note (Note 6(19)) (Note 6(19))

December 31, 2013

associates and joint associates and joint

year in in for the

Legal reserve Legal reserve Legal Cash Cash dividends Cash dividends 31, 2012 earnings the year for underaccountedventures for equity method from acquisition or disposal of subsidiary and book value interest 31, 2013 earnings for the underaccountedventures for equity method from acquisition or disposal of subsidiary and book value interest

ended the For year Balance at 1,January 2012 Appropriations of 2011 Profit Other comprehensive income Change between Difference proceeds Changes in non December at Balance the For ended year De Balance at 1,January 2013 Appropriations of 2012 Profit for the comp Other Change between Difference proceeds shares treasury of Purchase shares treasury of Retirement Changes in non at Balance

212 WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468 ASUSTEK COMPUTER INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

FOR THE YEARS ENDED DECEMBER 31, 2013 2012

Cash flows from operating activities Consolidated profit before tax for the year $ 27,026,102 $ 27,063,213 Adjustments to reconcile consolidated profit before tax to net cash provided by operating activities Income and expenses that result in non-cash flows Depreciation 2,578,962 2,049,524 Amortization 400,757 313,733 (Reversal of allowance for doubtful accounts) bad debt provision ( 192,157 ) 511,464 Net loss on financial assets or liabilities at fair value through profit or loss 162,430 1,616,339 Share of profit of associates and joint ventures accounted for under equity method ( 571,969 ) ( 1,534,044 ) Gain on disposal of investments ( 1,583,541 ) ( 22,462 ) Impairment loss on financial assets 95,582 212,237 Impairment loss on non-financial assets 200,598 63,342 Others 20,643 554,232 Changes in assets/liabilities relating to operating activities Financial assets at fair value through profit or loss 966,175 4,019,181 Notes receivable ( 670,890 ) ( 357,014 ) Trades receivable ( 8,218,552 ) ( 17,005,146 ) Other receivables ( 1,804,522 ) 5,280,771 Inventories 2,999,239 ( 22,123,925 ) Prepayments ( 878,639 ) ( 925,901 ) Other current assets ( 245,941 ) ( 64,683 ) Financial liabilities at fair value through profit or loss ( 2,315,118 ) ( 2,734,270 ) Notes and trades payable 6,810,952 15,475,126 Trades payable - related parties ( 4,865,197 ) ( 3,657,024 ) Other payables 10,303,503 6,519,699 Provision for liabilities 5,041,277 9,680,341 Receipts in advance ( 1,109,609 ) ( 897,384 ) Other current liabilities 392,369 616,430 Other operating liabilities ( 1,115 ) ( 69,163 ) Receipt of interest 623,855 515,918 Payment of interest ( 74,445 ) ( 90,298 ) Payment of income tax ( 5,208,654 ) ( 3,271,863 ) Net cash provided by (used in) operating activities 29,882,095 21,738,373 Cash flows from investing activities Proceeds from disposal of available-for-sale financial assets 175,250 133,783 Acquisition of investments accounted for under equity method - ( 86,169 ) Proceeds from disposal of investments accounted for under equity method 4,652,022 6,336 Acquisition of property, plant and equipment ( 2,328,017 ) ( 2,202,121 ) Proceeds from disposal of property, plant and equipment 109,027 17,529 Acquisition of intangible assets ( 217,407 ) ( 127,132 ) Changes in other non-current assets ( 1,193,058 ) ( 837,795 ) Receipt of dividends 1,101,199 449,640 Cash decrease due to loss of control over subsidiaries ( 3,707 ) ( 34,002 ) Cash increase due to acquisition of control over subsidiaries - 405,952 Acquisition of subsidiaries - ( 11,125 ) Others 14,511 ( 124,745 ) Net cash provided by (used in) investing activities 2,309,820 ( 2,409,849 ) Cash flows from financing activities Increase in short-term borrowings 1,068,500 766,086 Increase in long-term borrowings 928,525 85,970 Redemption of long-term borrowings ( 1,324,846 ) ( 75,251 ) Payment of cash dividends ( 14,302,445 ) ( 10,915,024 ) Purchase of treasury shares ( 2,525,987 ) - Changes in non-controlling interest ( 106,485 ) 360,547 Others 53,419 31,975 Net cash provided by (used in) financing activities ( 16,209,319 ) ( 9,745,697 ) Effects due to changes in exchange rate 932,705 ( 1,171,042 ) Increase in cash and cash equivalents 16,915,301 8,411,785 Cash and cash equivalents at beginning of the year 49,608,893 41,197,108 Cash and cash equivalents at end of the year $ 66,524,194 $ 49,608,893

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 27, 2014.

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ASUSTEK COMPUTER INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 AND 2012 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANIZATION (1) ASUSTEK COMPUTER INC. (ASUS or the Company) was established in the Republic of China (R.O.C.). The Company is primarily engaged in the design, R&D and sales of 3C products (including PCs, main boards, other boards and cards, tablet PCs, smart phones and other handheld devices, etc.). (2) The Company resolved to spin-off its OEM businesses on January 1, 2008. Pursuant to the Company’s resolution, the Company transferred its computer and non-computer OEM businesses to its spun-off subsidiaries, PEGA and UNIHAN, respectively. On June 1, 2010, however, the Company transferred further its OEM assets and business (the Company’s investments accounted for under equity method in PEGA) to the Company’s another investee, PII. PII issued new shares to the Company and its shareholders as consideration. On April 29, 2013, the Company disposed the partial shares of PEGA and reduced the ownership percentage to be below 20%. 2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION These consolidated financial statements were authorized for issuance by the Board of Directors on March 27, 2014. 3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards, International Accounting Standards and Interpretations/bulletins (IFRSs) as endorsed by the Financial Supervisory Commission (FSC) Not applicable as it is the first-time adoption of IFRSs by the Group this year. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group A. IFRS 9, “Financial Instruments: Classification and measurement of financial assets” (A) The International Accounting Standards Board (IASB) published IFRS 9, “Financial Instruments”, in November, 2009, which will take effect on January 1, 2013 with early application permitted. (Through the amendments to IFRS 9 published on November 19, 2013, the IASB has removed the previous mandatory efffective date, but the standard is available for immediate application). Although the FSC has endorsed IFRS 9, FSC does not permit early application of IFRS 9 when IFRSs are adopted in R.O.C. in 2013. Instead, enterprises should apply International Accounting Standard No. 39 (IAS 39), “Financial Instruments: Recognition and Measurement” reissued in 2009.

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(B) IFRS 9 was issued as the first step to replace IAS 39. IFRS 9 outlines the new classification and measurement requirements for financial instruments, which might affect the accounting treatments for financial instruments of the Group. (C) The Group has not evaluated the overall effect of the IFRS 9 adoption. However, based on preliminary evaluation, it was noted that the IFRS 9 adoption might have an impact on those instruments classified as “available-for-sale financial assets” held by the Group, as IFRS 9 specifies that the fair value changes in the equity instruments that meet certain criteria may be reported in other comprehensive income, and such amount that has been recognized in other comprehensive income should not be reclassified to profit or loss when such assets are derecognized. The Group recognized gain on equity instruments amounting to $2,872,802 in other comprehensive income for the year ended December 31, 2013. (3) IFRSs issued by IASB but not yet endorsed by the FSC The following are the assessment of new standards, interpretations and amendments issued by IASB that are effective but not yet endorsed by the FSC and have not been adopted by the Group (application of the new standards, interpretations and amendments should follow the regulations of the FSC):

New standards, interpretations and amendments Main amendments Effective date Limited exemption from The amendment provides first-time adopters of July 1, 2010 comparative IFRS 7 disclosures IFRSs with the same transition relief that for first-time adopters existing IFRS preparer received in IFRS 7, (amendment to IFRS 1) “Financial Instruments: Disclosures” and exempts first-time adopters from providing the additional comparative disclosures.

Improvements to IFRSs 2010 Amendments to IFRS 1, IFRS 3, IFRS 7, IAS 1, January 1, 2011 IAS 34 and IFRIC 13.

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New standards, interpretations and amendments Main amendments Effective date IFRS 9, “Financial instruments: IFRS 9 requires gains and losses on financial November 19, 2013 Classification and measurement liabilities designated at fair value through profit (Not mandatory) of financial liabilities” or loss to be split into the amount of change in the fair value that is attributable to changes in the credit risk of the liability, which shall be presented in other comprehensive income, and cannot be reclassified to profit or loss when derecognizing the liabilities; and all other changes in fair value are recognized in profit or loss. The new guidance allows the recognition of the full amount of change in the fair value in the profit or loss only if there is reasonable evidence showing on initial recognition that the recognition of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch (inconsistency) in profit or loss. (That determination is made at initial recognition and is not reassessed subsequently.) Disclosures - transfers of financial The amendment enhances qualitative and July 1, 2011 assets (amendment to IFRS 7) quantitative disclosures for all transferred financial assets that are not derecognized and for any continuing involvement in transferred assets, existing at the reporting date. Severe hyperinflation and removal When an entity’s date of transition to IFRSs is July 1, 2011 of fixed dates for first-time on, or after, the functional currency adopters (amendment to IFRS 1) normalisation date, the entity may elect to measure all assets and liabilities held before the functional currency normalisation date at fair value on the date of transition to IFRSs. First-time adopters are allowed to apply the derecognition requirements in IAS 39, “Financial instruments: Recognition and measurement”, prospectively from the date of transition to IFRSs, and they are allowed not to retrospectively recognize related gains on the date of transition to IFRSs.

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New standards, interpretations and amendments Main amendments Effective date Deferred tax: recovery of The amendment gives a rebuttable presumption January 1, 2012 underlying assets that the carrying amount of investment (amendment to IAS 12) properties measured at fair value is recovered entirely by sale, unless there exists any evidence that could rebut this presumption. The amendment also replaces Standing Interpretations Committee 21, “Income taxes - recovery of revalued non-depreciable assets”. IFRS 10, “Consolidated financial The standard builds on existing principles by January 1, 2013 statements” identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where it is difficult to assess. IFRS 11, “Joint arrangements” Judgments applied when assessing the types of January 1, 2013 joint arrangements-joint operations and joint ventures, the entity should assess the contractual rights and obligations instead of the legal form only. The standard also prohibits the proportional consolidation for joint ventures. IFRS 12, “Disclosure of interests The standard requires the disclosure of interests January 1, 2013 in other entities” in other entities including subsidiaries, joint arrangements, associates and unconsolidated structured entities. IAS 27, “Separate financial The standard removes the requirements of January 1, 2013 statements” (as amended in 2011) consolidated financial statements from IAS 27 and those requirements are addressed in IFRS 10, “Consolidated financial statements”. IAS 28, “Investments in associates As consequential amendments resulting from the January 1, 2013 and joint ventures” issuance of IFRS 11, “Joint arrangements”, (as amended in 2011) IAS 28 (revised) sets out the requirements for the application of the equity method when accounting for investments in joint ventures.

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New standards, interpretations and amendments Main amendments Effective date IFRS 13, “Fair value IFRS 13 aims to improve consistency and January 1, 2013 measurement” reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs. IAS 19 revised, “Employee The revised standard eliminates corridor January 1, 2013 benefits” (as amended in 2011) approach and requires actuarial gains and losses to be recognized immediately in other comprehensive income. Past service costs will be recognized immediately in the period incurred. Net interest expense or income, calculated by applying the discount rate to the net defined benefit liability or asset, replace the finance charge and expected return on plan assets. The return of plan assets, excluding net interest expense, is recognized in other comprehensive income.

Presentation of items of other The amendment requires profit or loss and other July 1, 2012 comprehensive income comprehensive income to be presented (amendment to IAS 1) separately in the statement of comprehensive income. Also, the amendment requires entities to separate items presented in other comprehensive income into two groups based on whether or not they may be recycled to profit or loss subsequently. IFRIC 20, “Stripping costs in the Stripping costs that meet certain criteria should January 1, 2013 production phase of a surface be recognized as the “stripping activity asset”. mine” To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the entity shall account for the costs of that stripping activity in accordance with IAS 2, “Inventories”.

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New standards, interpretations and amendments Main amendments Effective date Disclosures - Offsetting financial The amendment requires disclosures to include January 1, 2013 assets and financial liabilities quantitative information that will enable users (amendment to IFRS 7) of an entity’s financial statements to evaluate the effect or potential effect of netting arrangements. Offsetting financial assets and The amendment clarifies criterion that an entity January 1, 2014 financial liabilities “currently has a legally enforceable right to (amendment to IAS 32) set off the recognized amounts” and gross settlement mechanisms with particular features are effectively equivalent to net settlement”; they would therefore satisfy the IAS 32 criterion in these instances. Government loans The amendment provides deferment to first-time January 1, 2013 (amendment to IFRS 1) adopters to apply the requirements in IFRS 9, “Financial instruments”, and IAS 20, “Accounting for government grants and disclosure of government assistance”, prospectively to government loans that exist at the date of transition to IFRS, and the gain of government loans from the existing lower market rate should not be recognized as a government grant. Improvements to IFRSs Amendments to IFRS 1 and IAS 1, IAS 16, January 1, 2013 2009-2011 IAS 32 and IAS 34. Consolidated financial statements, The amendment clarifies that the date of initial January 1, 2013 joint arrangements and application is the first day of the annual period disclosure of interests in other in which IFRS 10, 11 and 12 is adopted. Entities: Transition guidance (amendments to IFRS 10, IFRS 11 and IFRS 12) Investment entities (amendments The amendments define “Investment Entities” January 1, 2014 to IFRS 10, IFRS 12 and IAS 27) and their characteristics. The parent company that meets the definition of investment entities should measure its subsidiaries using fair value through profit or loss instead of consolidating them.

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New standards, interpretations and amendments Main amendments Effective date IFRIC 21, “Levies” The interpretation addresses the accounting January 1, 2014 for levies imposed by governments in accordance with legislation (other than income tax). A liability to pay a levy shall be recognized in accordance with IAS 37, “Provisions, contingent liabilities and contingent assets”. Recoverable amount disclosures The amendments remove the requirement to January 1, 2014 for non-financial assets disclose recoverable amount when a cash (amendments to IAS 36) generating unit (CGU) contains goodwill or intangible assets with indefinite useful lives that were not impaired. Novation of derivatives and The amendment states that the novation of January 1, 2014 continuation of hedge a hedging instrument would not be accounting (amendments to considered an expiration or termination IAS 39) giving rise to the discontinuation of hedge accounting when the hedging instrument that is being novated complies with specified criteria. IFRS 9, “Financial assets: hedge 1. IFRS 9 relaxes the requirements for November 19, 2013 accounting” and admendments hedged items and hedging instruments (Not mandatory) to IFRS 9, IFRS 7 and IAS 39 and removes the bright line of effectiveness to better align hedge accounting with the risk management activities of an entity. 2. An entity can elect to early adopt the requirement to recognize the changes in fair value attributable to changes in an entity’s own credit risk from financial liabilities that are designated under the fair value option in “other comprehensive income”. Services related contributions from The amendment allows contributions from July 1, 2014 employees or third parties employees or third parties that are linked (amendments to IAS 19R) to service, and do not vary with the length of employee service, to be deducted from the cost of benefits earned in the period that the services is provided. Contributions that are linked to service, and vary according to the length of employee service, must be spread over the service period using the same attribution method that is applied to the benefits.

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New standards, interpretations and amendments Main amendments Effective date Improvements to IFRSs Amendments to IFRS 2, IFRS 3, IFRS 8, July 1, 2014 2010-2012 IFRS 13, IAS 16, IAS 24 and IAS 38. Improvements to IFRSs Amendments to IFRS 1, IFRS 3, IFRS 13 July 1, 2014 2011-2013 and IAS 40. The Group is assessing the potential impact of the new standards, interpretations and amendments above and has not yet been able to reliably estimate their impact on the consolidated financial statements. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. (1) Compliance statement A. These consolidated financial statements are the first consolidated financial statements prepared by the Group in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” and IFRSs. B. In the preparation of the balance sheet (the opening IFRS balance sheet) as of January 1, 2012 (the date of the Group’s transition to IFRSs), the Group has adjusted the amounts that were reported in the consolidated financial statements in accordance with previous generally accepted accounting principles in the Republic of China (R.O.C. GAAP). Please refer to Note 14 for the impact of transitioning from R.O.C. GAAP to IFRSs on the Group’s financial position, financial performance and cash flows. (2) Basis of preparation A. Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention: (A) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. (B) Available-for-sale financial assets measured at fair value. (C) Liabilities on cash-settled share-based payment arrangements measured at fair value. (D) Defined benefit liabilities recognized based on the net amount of pension fund assets plus unrecognized past service cost, less present value of defined benefit obligation. B. The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

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(3) Basis of consolidation A. Basis for preparation of consolidated financial statements (A) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies. In general, control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than 50% of the voting power of an entity. The existence and effect of potential voting rights that are currently exercisable or convertible have been considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. (B) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group. (C) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. (D) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity. (E) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

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B. Subsidiaries included in the consolidated financial statements:

Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark

ASUS ASUS COMPUTER Selling 3C products in North 100.00 100.00 INTERNATIONAL (ACI) America ASUS ASUS TECHNOLOGY Selling 3C products in Taiwan 100.00 100.00 INCORPORATION (ASUTC) ASUS AXUS MICROSYSTEMS INC. Manufacturing and selling RAID 84.99 84.99 (AXUS) products ASUS SHINEWAVE Developing, designing and 50.99 50.99 INTERNATIONAL INC. consulting about information (SWI) system software ASUS ASUS HOLLAND B.V. (ACH) Repairing 3C products 100.00 100.00 ASUS ASUS INTERNATIONAL 3C and computer peripheral 100.00 100.00 LIMITED (AIL) business investment ASUS ASUSTEK HOLDINGS Computer peripherals business 100.00 100.00 LIMITED (AHL) investment ASUS ASUS GLOBAL Selling 3C products 100.00 - PTE. LTD. (ASGL) ASUS ASUS CLOUD Selling and consulting about 83.43 81.82 CORPORATION e-commerce service (ASUSCLOUD) ASUS INTERNATIONAL UNITED Developing, manufacturing and 56.73 56.73 TECHNOLOGY CO., LTD. selling ink-jet print heads and (TAIWAN) (IUT) ink-jet digital image output technology ASUS ASMEDIA TECHNOLOGY Designing, developing and 43.89 43.89 INC. (ASMEDIA) manufacturing high-speed analog circuit ASUS ASKEY COMPUTER CORP. Designing, manufacturing, 100.00 100.00 (ASKEY) repairing and selling communication products and computer peripheral spare parts ASUS HUA-CHENG VENTURE Computer peripherals business 100.00 100.00 CAPITAL CORP. (HCVC) investment ASUS HUA-MIN INVESTMENT Computer peripherals business 100.00 100.00 CO., LTD. (HMI) investment ASUS AGAIT TECHNOLOGY Designing and selling computer 100.00 100.00 CORPORATION (AGA) peripheral and smart vacuums ASUS ENERTRONIX, INC. (EN) Selling communication products 100.00 100.00 ASUS UPI SEMICONDUCTOR Designing and developing 37.50 37.65 CORP. (UPI) integrated circuits

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Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark ASUS AAEON TECHNOLOGY Manufacturing and selling 47.00 47.00 INC. (AAEON) industrial computers and computer peripherals SWI EMES (SUZHOU) CO., LTD. Developing, designing and 100.00 100.00 GROUP (EMES) consulting about information system software ASMEDIA GREAT EXTEND High-speed analog circuit business 100.00 100.00 GROUP INVESTMENT CORP. (GEI) investment ASKEY ASKEY INTERNATIONAL Selling and consulting about 100.00 100.00 GROUP CORP. (ASKEYI) communication products ASKEY DYNALINK Communication business 100.00 100.00 GROUP INTERNATIONAL investment CORP. (DIC) ASKEY MAGIC INTERNATIONAL Computer peripherals business 100.00 100.00 GROUP CO., LTD. (MIC) investment ASKEY ASKEY (VIETNAM) Manufacturing and selling 100.00 100.00 GROUP COMPANY LIMITED communication products (ASKEYVN) ASKEY FAMOUS STAR Communication and computer - 100.00 GROUP INVESTMENTS LIMITED peripherals investment (FSI) ASKEY MAGICOM Communication business 100.00 100.00 GROUP INTERNATIONAL investment CORP. (MAGICOM) ASKEY ASKEY TECHNOLOGY Developing and selling 100.00 100.00 GROUP (SHANGHAI) communication products LTD. (ASKEYSH) ASKEY OPENBASE LIMITED (OB) Selling communication products 100.00 100.00 GROUP and computer peripherals ASKEY LEADING PROFIT CO., LTD. Selling communication products 100.00 100.00 GROUP (LP) and computer peripherals ASKEY UNI LEADER Selling communication products 100.00 100.00 GROUP INTERNATIONAL LTD. and computer peripherals (UNI) ASKEY ASKEY TECHNOLOGY Manufacturing and selling 100.00 100.00 GROUP (JIANGSU) LTD. communication products (ASKEYJS) ASKEY ASON TECHNOLOGY Manufacturing and selling - 100.00 GROUP (SUZHOU) LTD. (ASON) communication products ASKEY ASHINE TECHNOLOGY Manufacturing and selling 100.00 100.00 GROUP (SUZHOU) LTD. (ASHINE) communication products ASKEY WISE ACCESS (HK) Communication business 100.00 100.00 GROUP LIMITED (WISE) investment ASKEY SILIGENCE SAS Selling and consulting about 80.00 80.00 GROUP (SILIGENCE) communication products

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Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark ASKEY ASKEY MAGICXPRESS Manufacturing and selling 100.00 100.00 GROUP (WUJIANG) CORP. communication products (ASKEYMWJ) ASKEY ASKEY COMMUNICATION Selling and consulting about 100.00 - GROUP GMBH (ASKEYCG) communication products IUT INTERNATIONAL UNITED Ink-jet print heads and ink-jet digital 100.00 100.00 GROUP TECHNOLOGY CO., LTD. image output technology business (IUTS) investment HCVC ASMEDIA TECHNOLOGY Designing, developing, and 8.29 8.29 GROUP INC. (ASMEDIA) manufacturing high-speed analog circuit HCVC AAEON TECHNOLOGY Manufacturing and selling 9.00 9.00 GROUP INC. (AAEON) industrial computers and computer peripherals HCVC UPI SEMICONDUCTOR Designing and developing 9.54 9.58 GROUP CORP. (UPI) integrated circuits HCVC AXUS MICROSYSTEMS INC. Manufacturing and selling RAID 0.01 0.01 GROUP (AXUS) products HCVC SHINEWAVE Developing, designing and 0.01 0.01 GROUP INTERNATIONAL INC. consulting about information (SWI) system software HMI UPI SEMICONDUCTOR Designing and developing 4.99 5.01 GROUP CORP. (UPI) integrated circuits HMI ASMEDIA TECHNOLOGY Designing, developing and 4.05 4.05 GROUP INC. (ASMEDIA) manufacturing high-speed analog circuit HMI AAEON TECHNOLOGY Manufacturing and selling 9.00 9.00 GROUP INC. (AAEON) industrial computers and computer peripherals AGA AGAITECH HOLDING LTD. Computer peripherals business 100.00 100.00 GROUP (AGAHL) investment AGA AGAIT TECHNOLOGY Computer peripherals business 100.00 100.00 GROUP (H.K.) CORPORATION investment LIMITED (AGAHK) AGA AGAIT TECHNOLOGY Selling smart vacuums 100.00 100.00 GROUP (SHENZHEN) LIMITED (AGASZ) AGA AGAIT INTELLIGENT Manufacturing smart vacuums 100.00 100.00 GROUP TECHNOLOGY (SHENZHEN) CO., LIMITED (AGAISZ) EN ENERTRONIX Manufacturing and selling computer 100.00 100.00 GROUP INTERNATIONAL peripherals LIMITED (ENIL) EN ENERTRONIX HOLDING Computer peripherals business 100.00 100.00 GROUP LIMITED (ENHL) investment

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Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark EN ENERTRONIX (HUIZHOU) Manufacturing and selling computer 100.00 100.00 GROUP LTD. (ENHZ) peripheral spare parts AAEON AAEON ELECTRONICS, INC. Manufacturing and selling 100.00 100.00 GROUP (AAEONEI) industrial computers and computer peripherals AAEON AAEON DEVELOPMENT, Industrial computers and computer 100.00 100.00 GROUP INC. (AAEONDI) peripherals business investment AAEON AAEON TECHNOLOGY CO., Industrial computers and adapters 100.00 100.00 GROUP LTD. (AAEONTCL) business investment AAEON AAEON TECHNOLOGY Manufacturing and selling industrial 100.00 100.00 GROUP (EUROPE) B.V. computers and computer (AAEONEU) peripherals AAEON AAEON TECHNOLOGY Manufacturing and selling industrial 100.00 100.00 GROUP GMBH (AAEONG) computers and computer peripherals AAEON AAEON INVESTMENT CO., Industrial computers and computer 100.00 100.00 GROUP LTD. (AAEONI) peripherals business investment AAEON ONYX HEALTHCARE INC. Manufacturing and selling industrial 85.00 85.00 GROUP (ONYX) computers and computer peripherals AAEON ONYX HEALTHCARE USA, Manufacturing and selling industrial 85.00 85.00 GROUP INC. (ONYXHU) computers and computer peripherals AAEON ONYX HEALTHCARE Manufacturing and selling industrial 85.00 85.00 GROUP EUROPE B.V. (ONYXHE) computers and computer peripherals AAEON AAEON TECHNOLOGY Manufacturing and selling industrial 94.20 94.20 GROUP SINGAPORE PTE. LTD. computers and computer peripherals (AAEONSG) AAEON AAEON TECHNOLOGY Manufacturing and selling 100.00 100.00 GROUP (SUZHOU) INC. industrial computers and adapters (AAEONSZ) UPI UBIQ SEMICONDUCTOR Designing, developing and selling 100.00 100.00 GROUP CORP. (UBIQ) integrated circuits UPI UPI SEMICONDUCTOR Selling integrated circuits and 100.00 100.00 GROUP CORPORATION (HK) LTD. investing in technical support (UPIHK) consulting business UPI UPI KOREA CO., LTD. Selling integrated circuits - 51.00 GROUP (UPIKR) UPI NOVELTEK Designing, developing and selling Note 53.76 GROUP SEMICONDUCTOR CORP. integrated circuits (NOVELTEK) UPI UPI-SEMICONDUCTOR Selling integrated circuits and 100.00 100.00 GROUP CORPORATION technical support consulting (SHENZHEN) LTD. (UPISZ) ASUSCLOUD ASUS CLOUD Investing in commerce service 100.00 100.00 GROUP SINGAPORE PTE. LTD. (ASUSCLOUDSG) ASUSCLOUD ASUS CLOUD (TIANJIN) Selling and consulting about 100.00 - GROUP INFORMATION e-commerce service TECHNOLOGY CO., LTD. (ASUSCLOUDTJ)

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Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark ASUSCLOUD ASUS CLOUD Selling and consulting about 100.00 - GROUP (LUXEMBOURG) e-commerce service S.A R.L (ASUSCLOUDLB) AHL CENTRAL TEC ASIA 3C business investment 100.00 100.00 GROUP LIMITED (CTEC) AHL ASUS COMPUTER Repairing 3C products - 100.00 GROUP (SHANGHAI) CO., LTD. (ACS) AHL WAVEFACE HOLDING Cloud solutions business investment 76.40 77.78 GROUP COMPANY LIMITED (WAVEFACEH) AHL WAVEFACE INC. Developing cloud solutions 76.40 77.78 GROUP (WAVEFACE) AIL DEEP DELIGHT LIMITED Computer peripherals business 100.00 100.00 GROUP (DDL) investment AIL CHANNEL PILOT LIMITED 3C business investment 100.00 100.00 GROUP (CHANNEL) AIL UNIMAX HOLDINGS Automotive electronics and 100.00 100.00 GROUP LIMITED (UHL) computer peripherals business investment AIL ASUS TECHNOLOGY PTE. Selling 3C products 100.00 100.00 GROUP LIMITED (ASTP) AIL ASUS MIDDLE EAST FZCO 3C products marketing and repairing 100.00 100.00 GROUP (ACAE) in Dubai AIL ASUS EGYPT L.L.C. (ACEG) 3C products marketing in Egypt 100.00 100.00 GROUP AIL ASUS COMPUTER GMBH 3C products marketing in Germany 100.00 100.00 GROUP (ACG) AIL ASUS COMPUTER 3C products marketing in 100.00 100.00 GROUP BENELUX B.V. (ACBNL) Netherlands, Belgium and Luxembourg AIL ASUS FRANCE SARL (ACF) 3C products marketing in France 100.00 100.00 GROUP AIL ASUSTEK (UK) LIMITED 3C products marketing in UK 100.00 100.00 GROUP (ACUK) AIL ASUS TECHNOLOGY 3C products marketing and repairing 100.00 100.00 GROUP (HONG KONG) LIMITED in Hong Kong (ACHK) AIL ASUS KOREA CO., LTD. 3C products marketing and repairing 100.00 100.00 GROUP (ACKR) in South Korea AIL ASUSTEK COMPUTER(S) Repairing 3C products in Singapore 100.00 100.00 GROUP PTE. LTD. (ACSG) AIL ASUS POLSKA SP. Z O.O. 3C products marketing in Polska 100.00 100.00 GROUP (ACPL) AIL ASUS TECHNOLOGY 3C products marketing and repairing 100.00 100.00 GROUP PRIVATE LIMITED (ACIN) in India

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Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark AIL ASUS TECHNOLOGY Selling 3C products 100.00 100.00 GROUP HOLLAND B.V. (ACNL) AIL ASUS TECHNOLOGY Repairing 3C products in Vietnam 100.00 100.00 GROUP (VIETNAM) CO., LTD. (ACVN) AIL ASUSTEK ITALY S.R.L. 3C products marketing in Italy 100.00 100.00 GROUP (ACIT) AIL ASUS IBERICA S.L. (ACIB) 3C products marketing in Spain 100.00 100.00 GROUP AIL ASUS TECHNOLOGY Researching and developing 100.00 100.00 GROUP (SUZHOU) CO., LTD. 3C products (ACSZ) AIL ASUS JAPAN Selling 3C products in Japan 100.00 100.00 GROUP INCORPORATION (ACJP) AIL ASUS COMPUTER CZECH 3C products marketing in Czech 100.00 100.00 GROUP REPUBLIC S.R.O. (ACCZ) Republic AIL ASUSTEK COMPUTER Selling 3C products in China 100.00 100.00 GROUP (SHANGHAI) CO., LTD. (ACSH) AIL ASUS CZECH SERVICE Repairing 3C products in Europe 99.59 99.59 GROUP S. R. O. (ACCZS) AIL ASUS SERVICE AUSTRALIA Repairing 3C products in Australia 100.00 100.00 GROUP PTY LIMITED (ASAU) AIL ASUS AUSTRALIA PTY 3C products marketing in Australia 100.00 100.00 GROUP LIMITED (ACAU) AIL ACBZ IMPORTACAO Selling 3C products in Brazil 100.00 100.00 GROUP E COMERCIAL LTDA. (ACBZ) AIL ASUS INDIA PRIVATE Selling 3C products in India 100.00 100.00 GROUP LIMITED (ASIN) AIL ASUS ISRAEL 3C products marketing in Israel 100.00 - GROUP (TECHNOLOGY) LTD. (ACIL) AIL ASUSTEK COMPUTER Selling 3C products in China 100.00 100.00 GROUP (CHONGQING) CO., LTD. (ACCQ) AIL ASUS PERU S.A.C (ACPE) 3C products marketing in Peru 100.00 - GROUP AIL ASUS SERVICE INDONESIA Repairing 3C products in Indonesia 100.00 - GROUP PTE. LTD. (ASID) AIL ASUS HOLDINGS MEXICO, Selling 3C products in Mexico 100.00 - GROUP S. A. DE C. V. (ACMH)

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Ownership (%) Investor Subsidiary Main business activities 2013/12/31 2012/12/31 Remark AIL ASUS MEXICO, S. A. DE 3C products marketing in Mexico 100.00 - GROUP C. V. (ACMX) AIL ASUS PORTUGAL, 3C products marketing in Portugal 100.00 100.00 GROUP SOCIEDADE UNIPESSOAL LDA. (ACPT) AIL ASUS HUNGARY SERVICES 3C products marketing and repairing 100.00 100.00 GROUP LIMITED LIABILITY in Hungary COMPANY (ACHU) AIL ASUS SWITZERLAND 3C products marketing in 100.00 100.00 GROUP GMBH (ACCH) Switzerland AIL UNIMAX ELECTRONICS Manufacturing and selling 100.00 100.00 GROUP INCORPORATION (UEI) autotronics and computer peripherals AIL ASUS COMPUTER Repairing 3C products 100.00 - GROUP (SHANGHAI) CO., LTD. (ACS) AIL ASUS INVESTMENTS Leasing real estate 100.00 - GROUP (SUZHOU) CO., LTD. (ACISZ) ACH ASUS CZECH SERVICE Repairing 3C products in Europe 0.41 0.41 GROUP S. R. O. (ACCZS)

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Ownership (%) Investor Subsidiary Main business activities 2012/1/1 Remark ASUS ASUS COMPUTER Selling 3C products in North 100.00 INTERNATIONAL (ACI) America ASUS ASUS TECHNOLOGY Selling 3C products in Taiwan 100.00 INCORPORATION (ASUTC) ASUS AXUS MICROSYSTEMS INC. Manufacturing and selling RAID 85.00 (AXUS) products ASUS SHINEWAVE Developing, designing and 51.00 INTERNATIONAL INC. consulting about information (SWI) system software ASUS ASUS HOLLAND B.V. (ACH) Repairing 3C products 100.00 ASUS ASUS INTERNATIONAL 3C and computer peripheral 100.00 LIMITED (AIL) business investment ASUS ASUSTEK HOLDINGS Computer peripherals business 100.00 LIMITED (AHL) investment ASUS ASUSCHANNEL Computer peripherals businees 100.00 CORPORATIONPTE investment (ASUSCH) ASUS ASUS CLOUD Selling and consulting about 82.50 CORPORATION e-commerce service (ASUSCLOUD) ASUS INTERNATIONAL UNITED Developing, manufacturing and 56.73 TECHNOLOGY CO., LTD. selling ink-jet print heads and (TAIWAN) (IUT) ink-jet digital image output technology ASUS ASMEDIA TECHNOLOGY Designing, developing and 52.31 INC. (ASMEDIA) manufacturing high-speed analog circuit ASUS ASKEY COMPUTER CORP. Designing, manufacturing, 100.00 (ASKEY) repairing and selling communication products and computer peripheral spare parts ASUS HUA-CHENG VENTURE Computer peripherals business 100.00 CAPITAL CORP. (HCVC) investment ASUS HUA-MIN INVESTMENT Computer peripherals business 100.00 CO., LTD. (HMI) investment ASUS AGAIT TECHNOLOGY Designing and selling computer 100.00 CORPORATION (AGA) peripheral and smart vacuums ASUS ENERTRONIX, INC. (EN) Selling communication products 100.00 ASUS AAEON TECHNOLOGY Manufacturing and selling 47.00 INC. (AAEON) industrial computers and computer peripherals SWI EMES (SUZHOU) CO., LTD. Developing, designing and 100.00 GROUP (EMES) consulting about information system software

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Ownership (%) Investor Subsidiary Main business activities 2012/1/1 Remark ASMEDIA GREAT EXTEND High-speed analog circuit business 100.00 GROUP INVESTMENT CORP. (GEI) investment ASKEY ASKEY INTERNATIONAL Selling and consulting about 100.00 GROUP CORP. (ASKEYI) communication products ASKEY DYNALINK Communication business 100.00 GROUP INTERNATIONAL investment CORP. (DIC) ASKEY MAGIC INTERNATIONAL Computer peripherals business 100.00 GROUP CO., LTD. (MIC) investment ASKEY ASKEY (VIETNAM) Manufacturing and selling 100.00 GROUP COMPANY LIMITED communication products (ASKEYVN) ASKEY BIG PROFIT LIMITED Information communication and 100.00 GROUP (BP) computer peripherals business investment ASKEY FAMOUS STAR Communication and computer 100.00 GROUP INVESTMENTS LIMITED peripherals investment (FSI) ASKEY MAGICOM Communication business 100.00 GROUP INTERNATIONAL investment CORP. (MAGICOM) ASKEY ASKEY TECHNOLOGY Developing and selling 100.00 GROUP (SHANGHAI) communication products LTD. (ASKEYSH) ASKEY OPENBASE LIMITED (OB) Selling communication products 100.00 GROUP and computer peripherals ASKEY LEADING PROFIT CO., LTD. Selling communication products 100.00 GROUP (LP) and computer peripherals ASKEY UNI LEADER Selling communication products 100.00 GROUP INTERNATIONAL LTD. and computer peripherals (UNI) ASKEY ASKEY TECHNOLOGY Manufacturing and selling 100.00 GROUP (JIANGSU) LTD. communication products (ASKEYJS) ASKEY ASON TECHNOLOGY Manufacturing and selling 100.00 GROUP (SUZHOU) LTD. (ASON) communication products ASKEY ASHINE TECHNOLOGY Manufacturing and selling 100.00 GROUP (SUZHOU) LTD. (ASHINE) communication products ASKEY WISE ACCESS (HK) Communication business 100.00 GROUP LIMITED (WISE) investment ASKEY SILIGENCE SAS Selling and consulting about 80.00 GROUP (SILIGENCE) communication products IUT INTERNATIONAL UNITED Ink-jet print heads and ink-jet digital 100.00 GROUP TECHNOLOGY CO., LTD. image output technology business (IUTS) investment

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Ownership (%) Investor Subsidiary Main business activities 2012/1/1 Remark HCVC ASMEDIA TECHNOLOGY Designing, developing, and 9.08 GROUP INC. (ASMEDIA) manufacturing high-speed analog circuit HCVC AAEON TECHNOLOGY Manufacturing and selling 9.00 GROUP INC. (AAEON) industrial computers and computer peripherals HMI ASMEDIA TECHNOLOGY Designing, developing and 4.45 GROUP INC. (ASMEDIA) manufacturing high-speed analog circuit HMI AAEON TECHNOLOGY Manufacturing and selling 9.00 GROUP INC. (AAEON) industrial computers and computer peripherals HMI MOBOSTAR Computer peripherals businees 100.00 GROUP TECHNOLOGY investment LIMITED (MOBO) AGA AGAITECH HOLDING LTD. Computer peripherals business 100.00 GROUP (AGAHL) investment AGA AGAIT TECHNOLOGY Computer peripherals business 100.00 GROUP (H.K.) CORPORATION investment LIMITED (AGAHK) AGA AGAIT TECHNOLOGY Computer peripherals business 100.00 GROUP (SHENZHEN) LIMITED investment (AGASZ) EN ENERTRONIX Manufacturing and selling 100.00 GROUP INTERNATIONAL computer peripherals LIMITED (ENIL) EN ENERTRONIX HOLDING Computer peripherals business 100.00 GROUP LIMITED (ENHL) investment EN ENERTRONIX (HUIZHOU) Manufacturing and selling computer 100.00 GROUP LTD. (ENHZ) peripheral spare parts AAEON AAEON ELECTRONICS, INC. Manufacturing and selling 100.00 GROUP (AAEONEI) industrial computers and computer peripherals AAEON AAEON SYSTEMS, Manufacturing and selling 100.00 GROUP INC. (AAEONSI) industrial computers and computer peripherals AAEON AAEON DEVELOPMENT, Industrial computers and computer 100.00 GROUP INC. (AAEONDI) peripherals business investment

AAEON AAEON TECHNOLOGY CO., Industrial computers and adapters 100.00 GROUP LTD. (AAEONTCL) business investment AAEON AAEON TECHNOLOGY Manufacturing and selling industrial 100.00 GROUP (EUROPE) B.V. computers and computer (AAEONEU) peripherals AAEON AAEON TECHNOLOGY Manufacturing and selling industrial 100.00 GROUP GMBH (AAEONG) computers and computer peripherals AAEON AAEON INVESTMENT CO., Industrial computers and computer 100.00 GROUP LTD. (AAEONI) peripherals business investment

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Ownership (%) Investor Subsidiary Main business activities 2012/1/1 Remark AAEON ONYX HEALTHCARE INC. Manufacturing and selling industrial 100.00 GROUP (ONYX) computers and computer peripherals AAEON ONYX HEALTHCARE USA Manufacturing and selling industrial 100.00 GROUP INC. (ONYXHU) computers and computer peripherals AAEON AAEON TECHNOLOGY Manufacturing and selling industrial 94.20 GROUP SINGAPORE PTE. LTD. computers and computer (AAEONSG) peripherals AAEON AAEON TECHNOLOGY Manufacturing and selling 100.00 GROUP (SUZHOU) INC. industrial computers and adapters (AAEONSZ) AHL CENTRAL TEC ASIA 3C business investment 100.00 GROUP LIMITED (CTEC)

AHL ASUS COMPUTER Repairing 3C products 100.00 GROUP (SHANGHAI) CO., LTD. (ACS) AHL WAVEFACE HOLDING Cloud solutions business investment 77.78 GROUP COMPANY LIMITED (WAVEFACEH) AHL WAVEFACE INC. Developing cloud solutions 77.78 GROUP (WAVEFACE) AHL NEXT SYSTEM Cloud solutions business 51.47 GROUP LIMITED (NEXTS) investment AHL ASUSTOR INC. (ASUSTOR) Computer peripherals business 51.47 GROUP investment AIL DEEP DELIGHT LIMITED Computer peripherals business 100.00 GROUP (DDL) investment AIL CHANNEL PILOT LIMITED 3C business investment 100.00 GROUP (CHANNEL) AIL UNIMAX HOLDINGS Automotive electronics and 100.00 GROUP LIMITED (UHL) computer peripherals business AIL ASUS COMPUTER 3C investment business investment 100.00 GROUP CORPORATION (ACBVI) AIL ASUS TECHNOLOGY PTE. Selling 3C products 100.00 GROUP LIMITED (ASTP) AIL ASUS MIDDLE EAST FZCO 3C products marketing and repairing 100.00 GROUP (ACAE) in Dubai AIL ASUS EGYPT L.L.C. (ACEG) 3C products marketing in Egypt 100.00 GROUP AIL ASUS COMPUTER GMBH 3C products marketing in Germany 100.00 GROUP (ACG) AIL ASUS COMPUTER 3C products marketing in 100.00 GROUP BENELUX B.V. (ACBNL) Netherlands, Belgium and Luxembourg AIL ASUS FRANCE SARL (ACF) 3C products marketing in France 100.00 GROUP

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Ownership (%) Investor Subsidiary Main business activities 2012/1/1 Remark AIL ASUSTEK (UK) LIMITED 3C products marketing in UK 100.00 GROUP (ACUK) AIL ASUS TECHNOLOGY 3C products marketing and repairing 100.00 GROUP (HONGKONG) LIMITED in Hong Kong (ACHK) AIL ASUS KOREA CO., LTD. 3C products marketing and repairing 100.00 GROUP (ACKR) in South Korea AIL ASUSTEK COMPUTER(S) Repairing 3C products in Singapore 100.00 GROUP PTE. LTD. (ACSG) AIL ASUS POLSKA SP. Z O.O. 3C products marketing in Polska 100.00 GROUP (ACPL) AIL ASUS TECHNOLOGY 3C products marketing and repairing 100.00 GROUP PRIVATE LIMITED (ACIN) in India AIL ASUS TECHNOLOGY Selling 3C products 100.00 GROUP HOLLAND B.V. (ACNL) AIL ASUS TECHNOLOGY Repairing 3C products in Vietnam 100.00 GROUP (VIETNAM) CO., LTD. (ACVN) AIL ASUSTEK ITALY S.R.L. 3C products marketing in Italy 100.00 GROUP (ACIT) AIL ASUS IBERICA S.L. (ACIB) 3C products marketing in Spain 100.00 GROUP AIL ASUS TECHNOLOGY Researching and developing 100.00 GROUP (SUZHOU) CO., LTD. 3C products (ACSZ) AIL ASUS JAPAN Selling 3C products in Japan 100.00 GROUP INCORPORATION (ACJP) AIL ASUS COMPUTER CZECH 3C products marketing in Czech 100.00 GROUP REPUBLIC S.R.O. (ACCZ) Republic AIL ASUSTEK COMPUTER Selling 3C products in China 100.00 GROUP (SHANGHAI) CO., LTD. (ACSH) AIL ASUS CZECH SERVICE Repairing 3C products in Europe 99.59 GROUP S. R. O. (ACCZS) AIL ASUS SERVICE AUSTRALIA Repairing 3C products in Australia 100.00 GROUP PTY LIMITED (ASAU) AIL ASUS AUSTRALIA PTY 3C products marketing in Australia 100.00 GROUP LIMITED (ACAU) AIL ACBZ IMPORTACAO Selling 3C products in Brazil 100.00 GROUP E COMERCIAL LTDA. (ACBZ) AIL ASUS INDIA PRIVATE Selling 3C products in India 100.00 GROUP LIMITED (ASIN) AIL ASUSTEK COMPUTER Selling 3C products in China 100.00 GROUP (CHONGQING) CO., LTD. (ACCQ)

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Ownership (%) Ownership (%) Investor Subsidiary Main business activities 2012/1/1 Remark Investor Subsidiary Main business activities 2012/1/1 Remark AIL ASUSTEK (UK) LIMITED 3C products marketing in UK 100.00 AIL ASUS PORTUGAL, 3C products marketing in Portugal 100.00 GROUP (ACUK) GROUP SOCIEDADE UNIPESSOAL AIL ASUS TECHNOLOGY 3C products marketing and repairing 100.00 LDA. (ACPT) GROUP (HONGKONG) LIMITED in Hong Kong AIL ASUS HUNGARY SERVICES 3C products marketing and repairing 100.00 (ACHK) GROUP LIMITED LIABILITY in Hungary AIL ASUS KOREA CO., LTD. 3C products marketing and repairing 100.00 COMPANY (ACHU) GROUP (ACKR) in South Korea AIL ASUS SWITZERLAND 3C products marketing in 100.00 AIL ASUSTEK COMPUTER(S) Repairing 3C products in Singapore 100.00 GROUP GMBH (ACCH) Switzerland GROUP PTE. LTD. (ACSG) AIL UNIMAX ELECTRONICS Manufacturing and selling 100.00 AIL ASUS POLSKA SP. Z O.O. 3C products marketing in Polska 100.00 GROUP INCORPORATION (UEI) autotronics and computer GROUP (ACPL) peripherals AIL ASUS TECHNOLOGY 3C products marketing and repairing 100.00 ACH ASUS CZECH SERVICE Repairing 3C products in Europe 0.41 GROUP PRIVATE LIMITED (ACIN) in India GROUP S. R. O. (ACCZS) AIL ASUS TECHNOLOGY Selling 3C products 100.00 GROUP HOLLAND B.V. (ACNL) Note: The Group failed to acquire or lost control of the entity during the period. AIL ASUS TECHNOLOGY Repairing 3C products in Vietnam 100.00 GROUP (VIETNAM) CO., LTD. C. Subsidiaries not included in the consolidated financial statements: None. (ACVN) D. Adjustments for subsidiaries with different balance sheet date: None. AIL ASUSTEK ITALY S.R.L. 3C products marketing in Italy 100.00 E. The restrictions on fund remittance from subsidiaries to the parent company: None. GROUP (ACIT) AIL ASUS IBERICA S.L. (ACIB) 3C products marketing in Spain 100.00 (4) Foreign currency translation GROUP Items included in the financial statements of each of the Group’s entities are measured using the AIL ASUS TECHNOLOGY Researching and developing 100.00 currency of the primary economic environment in which the entity operates (the “functional GROUP (SUZHOU) CO., LTD. 3C products (ACSZ) currency”). The consolidated financial statements are presented in “New Taiwan Dollars (NTD)”, AIL ASUS JAPAN Selling 3C products in Japan 100.00 which is the Company’s functional and the Group’s presentation currency. GROUP INCORPORATION (ACJP) AIL ASUS COMPUTER CZECH 3C products marketing in Czech 100.00 A. Foreign currency transactions and balances GROUP REPUBLIC S.R.O. (ACCZ) Republic (A) Foreign currency transactions are translated into the functional currency using the exchange AIL ASUSTEK COMPUTER Selling 3C products in China 100.00 rates prevailing at the dates of the transactions or valuation where items are remeasured. GROUP (SHANGHAI) CO., LTD. (ACSH) Foreign exchange gains and losses resulting from the settlement of such transactions are AIL ASUS CZECH SERVICE Repairing 3C products in Europe 99.59 recognized in profit or loss in the period in which they arise, except when deferred in other GROUP S. R. O. (ACCZS) comprehensive income as qualifying cash flow hedges. AIL ASUS SERVICE AUSTRALIA Repairing 3C products in Australia 100.00 GROUP PTY LIMITED (ASAU) (B) Monetary assets and liabilities denominated in foreign currencies at the period end are AIL ASUS AUSTRALIA PTY 3C products marketing in Australia 100.00 re-translated at the exchange rates prevailing at the balance sheet date. Exchange GROUP LIMITED (ACAU) AIL ACBZ IMPORTACAO Selling 3C products in Brazil 100.00 differences arising upon re-translation at the balance sheet date are recognized in profit or GROUP E COMERCIAL LTDA. loss. (ACBZ) (C) Non-monetary assets and liabilities denominated in foreign currencies at fair value through AIL ASUS INDIA PRIVATE Selling 3C products in India 100.00 GROUP LIMITED (ASIN) profit or loss are re-translated at the exchange rates prevailing at the balance sheet date. The translation differences are recognized in profit or loss as part of the fair value gain or loss. AIL ASUSTEK COMPUTER Selling 3C products in China 100.00 GROUP (CHONGQING) CO., LTD. Non-monetary assets and liabilities at fair value through other comprehensive income are (ACCQ) re-translated at the exchange rates prevailing at the balance sheet date. The translation differences are recognized in other comprehensive income. However, non-monetary assets

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and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions. (D) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within “other gains and losses”. B. Translation of foreign operations (A) The operating results and financial position of all the group entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows: a. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet; b. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and c. All resulting exchange differences are recognized in other comprehensive income. (B) When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even the Group still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations. (C) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even the Group still retains partial interests in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in these foreign operations. (5) Classification of current and non-current items A. Assets that meet one of the following criteria are classified as current assets: (A) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle; (B) Assets held mainly for trading purposes; (C) Assets that are expected to be realized within twelve months from the balance sheet date; (D) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date. Otherwise they are classified as non-current assets.

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B. Liabilities that meet one of the following criteria are classified as current liabilities: (A) Liabilities that are expected to be paid off within the normal operating cycle; (B) Liabilities arising mainly from trading activities; (C) Liabilities that are to be paid off within twelve months from the balance sheet date; (D) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. Otherwise they are classified as non-current liabilities. (6) Cash equivalents Cash equivalents refer to short-term highly liquid investments that are readily convertible to known amount of cash and subject to an insignificant risk of changes in value. Time deposits can be classified as cash equivalents if they meet the criteria mentioned above and are held for short-term cash commitments in operational purpose. (7) Financial assets at fair value through profit or loss A. Financial assets at fair value through profit or loss are financial assets held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition: (A) Hybrid (combined) contracts; or (B) They eliminate or significantly reduce a measurement or recognition inconsistency; or (C) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy. B. On a regular way purchase or sale basis, financial assets designated as at fair value through profit or loss are recognized and derecognized using trade date accounting. C. Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss. (8) Available-for-sale financial assets A. Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting.

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C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in “financial assets measured at cost”. (9) Loans and receivables Trades receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Trades receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. Due to the insignificant discount effect on the non-interest bearing short-term receivables, they are measured at the original invoice amount. (10) Impairment of financial assets A. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. B. The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows: (A) Significant financial difficulty of the issuer or debtor; (B) A breach of contract, such as a default or delinquency in interest or principal payments; (C) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider; (D) It becomes probable that the borrower will enter bankruptcy or other financial reorganization; (E) The disappearance of an active market for that financial asset because of financial difficulties; (F) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local unfavorable economic conditions that correlate with defaults on the assets in the group;

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(G) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; or (H) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. C. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets: (A) Financial assets measured at amortized cost The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortized cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. (B) Financial assets measured at cost The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account. (C) Available-for-sale financial assets The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortization) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from “other comprehensive income” to “profit or loss”. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss can be reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed in profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

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(11) Derecognition of financial assets The Group derecognizes a financial asset when one of the following conditions is met: A. The contractual rights to receive cash flows from the financial asset expire. B. The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset. C. To transfer the contractual rights to receive cash flows of ownership of the financial asset but the Group has not retained the control of financial asset. (12) Lease receivables/ leases (lessor) An operating lease is a lease that all the risks and rewards incidental to ownership of the leased assets are not transferred to the lessees. Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term. (13) Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials and other direct/indirect costs. It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. (14) Investments accounted for under equity method / associates A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20% or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost. B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. C. When changes in an associate’s equity are not recognized in profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in “capital surplus” in proportion to its ownership.

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D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group. E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then “capital surplus” and “investments accounted for under equity method” shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of. F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. G. When the Group disposes its investment in an associate and loses significant influence over this associate, the total amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately. H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately. (15) Property, plant and equipment A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised. B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

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C. Except for land which is not depreciated, other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is significant, it should be depreciated separately. D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”, from the date of the change. The estimated useful lives of buildings are 2~60 years, machinery and equipment are 1~10 years and miscellaneous equipment are 1~15 years. (16) Leased assets/ leases (lessee) An operating lease is a lease that the lessor assumes substantially all the risks and rewards incidental to ownership of the leased asset. Payments made under an operating lease (net of any incentives received from the lessor) are recognized in profit or loss on a straight-line basis over the lease term. (17) Investment property An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 2~50 years. (18) Intangible assets A. Goodwill arises in a business combination accounted for by applying the acquisition method. B. Other intangible assets, mainly trademark and computer software, are amortized on a straight-line basis over their estimated useful lives of 1~10 years. (19) Impairment of non-financial assets A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or decrease, the impairment loss shall be reversed to the extent of the loss previously recognized in profit or loss. However, the reversal should not exceed the carrying amount, net of depreciation or amortization had the impairment not been recognized. B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use shall be evalutaed periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss

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shall not be reversed in the following years. (20) Borrowings A. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost, any difference between the proceeds net of transaction costs, and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method. B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortized over the period of the facility to which it relates. (21) Notes and trades payable Notes and trades payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. Due to the insignificant discount effect on the non-interest bearing short-term payables, they are measured at the original invoice amount. (22) Financial liabilities at fair value through profit or loss A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition: (A) Hybrid (combined) contracts; or (B) They eliminate or significantly reduce a measurement or recognition inconsistency; or (C) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy. B. Financial liabilities at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognized in profit or loss. (23) Derecognition of financial liabilities A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.

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(24) Offsetting financial assets and financial liabilities Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. (25) Derivative financial instruments and hedging activities A. Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any changes in the fair value are recognized in profit or loss. B. The Group designates certain derivatives as either: (A) Hedges of the change in fair value of recognized assets or liabilities or an unrecognized firm commitment (fair value hedge); or (B) Hedges of the variability in cash flow associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge). C. The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. D. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as current assets or liabilities. E. Fair value hedge (A) Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recorded in profit or loss, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The Group only applies fair value hedge accounting for hedging fixed interest risk on borrowings. The gain or loss relating to the effective portion of interest rate swaps hedging fixed rate borrowings is recognized in the statement of comprehensive income within “finance costs”. The gain or loss relating to the ineffective portion is recognized in the statement of comprehensive income within “other gains and losses”. Changes in the fair value of the hedge fixed rate borrowings attributable to interest rate risk are recognized in the statement of comprehensive income within “finance costs”. (B) If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used to be amortized to profit or loss over the period to maturity.

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F. Cash flow hedge (A) The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the statement of comprehensive income within “other gains and losses”. (B) When the forecast transaction that is hedged results in the recognition of a non-financial asset or financial liability, the gains and losses previously deferred in other comprehensive income are reclassified into profit or loss in the periods when the asset acquired or the liability assumed affects profit or loss. The deferred amounts are ultimately recognized in sales revenue. (C) When a hedging instrument expires, or is sold, cancelled or executed, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive income. When a forecast transaction occurs or is no longer expected to occur, the cumulative gain or loss that was reported in other comprehensive income is transferred to profit or loss in the periods when the hedged forecast cash flow affects profit or loss. (26) Provisions for liabilities Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses. (27) Employee benefits A. Short-term employee benefits Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service. B. Pensions (A) Defined contribution plans For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

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(B) Defined benefit plans a. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in such corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead. b. Actuarial gains and losses arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise. c. Past service costs are recognized immediately in profit or loss if vested immediately; if not, the past service costs are amortized on a straight-line basis over the vesting period. (C) Termination benefits Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognizes termination benefits when it is demonstrably committed to a termination, when it has a detailed formal plan to terminate the employment of current employees and when it can no longer withdraw the plan. In the case of an offer made by the Group to encourage voluntary termination of employment, the termination benefits are recognized as expenses only when it is probable that the employees are expected to accept the offer and the number of the employees taking the offer can be reliably estimated. Benefits falling due more than 12 months after balance sheet date are discounted to their present value. (D) Employees’ bonus and directors’ and supervisors’ remuneration Employees’ bonus and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. However, if the accrued amounts for employees’ bonus and directors’ and supervisors’ remuneration are different from the actual distributed amounts as resolved by the shareholders at their shareholders’ meeting subsequently, the differences should be recognized based on the accounting for changes in estimates. The Group calculates the number of shares of employees’ stock bonus based on the fair value per share at the previous day of the shareholders’ meeting held in the year following the financial reporting year, and after

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taking into account the effects of ex-rights and ex-dividends. (28) Income tax A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity. B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the shareholders resolve to retain the earnings. C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed. E. Current income tax assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

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F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from research and development expenditures and employees’ training expenditures to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized. (29) Dividends Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance. (30) Revenue recognition Sales of goods A. The Group is primarily engaged in the selling of 3C products. Revenue is measured at the fair value of the consideration received or receivable taking into account value-added tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods should be recognized when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied. B. The Group offers customers volume discounts and right of return for defective products. The Group estimates such discounts and returns based on historical experience. Provisions for such liabilities are recorded when the sales are recognized. The volume discounts are estimated based on the anticipated annual sales quantities. (31)Business combinations A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

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B. If the total of the fair values of the consideration of acquisition and any non-controlling interest in the acquiree as well as the acquisition-date fair value of any previous equity interest in the acquiree is higher than the fair value of the Group’s share of the identifiable net assets acquired, the difference is recorded as goodwill; if less than the fair value of the Group’s share of the identifiable net assets acquired (bargain purchase), the difference is recognized as profit directly. (32) Operating segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions at the balance sheet date and estimates concerning future events. The resulting accounting estimates and assumptions might be different from the actual results, and will be continually evaluated and adjusted based on historical experience and other factors. (1) Critical judgements in applying the Group’s accounting policies A. Financial assets - impairment of equity investments The Group follows the guidance of IAS 39 to determine whether a financial asset - equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow. B. Investment property The Group uses the main part of the investment property to earn rentals or for capital appreciation and others for its own use. When the portions cannot be sold separately and cannot be leased separately under finance lease, the property is classified as investment property only if the own-use portion accounts for less than 50% of the property. C. Revenue recognition on a net/gross basis The determination of whether the Group is acting as principal or agent in a transaction is based on an evaluation of the Group’s exposure to the significant risks and rewards associated with the sale of goods in accordance with the business model and substance of the transaction. Where the Group acts as a principal, the amount received or receivable from customers is recognized as revenue on a gross basis. Where the Group acts as an agent, net revenue is recognized representing commissions earned.

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The following characteristics of a principal are used as indicators to determine whether the Group shall recognize revenue on a gross basis: (A) The Group has primary responsibilities for the goods or services it provides; (B) The Group bears inventory risk; (C) The Group has the latitude in establishing prices for the goods or services, either directly or indirectly. (D) The Group bears credit risk of customers. (2) Critical accounting estimates and assumptions A. Sales returns and discounts estimation The Group estimates discounts and returns based on historical results and other known factors. Provisions for such liabilities are recorded as a deduction item to sales revenues when the sales are recognized. The Group reassesses the reasonableness of estimates of discounts and returns periodically. As of December 31, 2013, provisions for discounts and returns amounted to $16,581,206. B. Estimation of provisions for warranty The Group estimates provisions for warranty based on historical results. Provisions for such liabilities are recorded as costs. The Group reassesses the reasonableness of estimates of provisions for warranty periodically. As of December 31, 2013, provisions for warranty amounted to $10,773,970. C. Impairment assessment of goodwill The impairment assessment of goodwill relies on the Group’s subjective judgement, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units. D. Evaluation of inventories Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2013, the carrying amount of inventories was $77,329,012.

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6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents

2013/12/31 2012/12/31 2012/1/1 Cash on hand and petty cash $ 10,252 $ 13,258 $ 191,765 Checking accounts and demand 17,698,879 12,863,179 10,250,177 deposits Time deposits 48,814,387 36,459,596 30,658,013 Others 676 272,860 97,153 $ 66,524,194 $ 49,608,893 $ 41,197,108

A. The Group associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. The Group’s maximum exposure to credit risk at balance sheet date is the carrying amount of all cash and cash equivalents. B. The Group has no cash and cash equivalents pledged to others. (2) Financial assets at fair value through profit or loss 2013/12/31 2012/12/31 2012/1/1 Current: Financial assets held for trading Open-end funds $ 8,873,970 $ 9,197,592 $ 10,787,934 Capital guaranteed instruments 1,131,100 - - Listed and OTC stocks 127,988 4,976 3,404 Convertible bonds 76,068 - 92,850 Non-hedging derivatives 137,582 68,673 726,007 $ 10,346,708 $ 9,271,241 $ 11,610,195

A. The Group recognized net gain of financial assets held for trading amounting to $1,897,671 and $1,704,201 for the years ended December 31, 2013 and 2012, respectively. B. The counterparties of the Group’s debt instrument investments have good credit quality, all with credit rating of the lowest risk level based on the Group’s internal assessment for their operating situations and financial structures. The maximum exposure to credit risk at balance sheet date is the carrying amount of financial assets at fair value through profit or loss-debt instruments.

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C. The unexpired contracts are as follows:

2013/12/31 2012/12/31 Contract amount Contract amount (Nominal principal) (Nominal principal) (in thousands) Contract period (in thousands) Contract period Derivative financial assets: Forward exchange contracts -EUR/USD EUR 20,000 2013/10-2014/03 EUR 20,000 2012/12-2013/04 -NOK/USD NOK 11,000 2013/10-2014/01 NOK 40,000 2012/12-2013/02 -RUB/USD RUB 3,600,000 2013/10-2014/01 RUB - - -AUD/USD AUD 25,400 2013/11-2014/01 AUD - - -JPY/USD JPY 4,986,475 2013/11-2014/02 JPY 1,891,650 2012/09-2013/03 -IDR/USD IDR 243,460,000 2013/12-2014/01 IDR - - -GBP/USD GBP - - GBP 29,500 2012/12-2013/04 -USD/NTD USD 2,000 2013/12-2014/02 USD 53,000 2012/10-2013/01 Currency option contracts -AUD/USD AUD 39,000 2013/11-2014/03 AUD - - Currency swap contracts -USD/NTD USD 8,000 2013/12-2014/01 USD 35,000 2012/11-2013/01

2012/1/1 Contract amount (Nominal principal) (in thousands) Contract period Derivative financial assets: Forward exchange contracts -EUR/NTD EUR 11,500 2011/11-2012/02 -EUR/USD EUR 292,200 2011/10-2012/03 -NOK/USD NOK 71,457 2011/10-2012/03 -AUD/USD AUD 14,000 2011/10-2012/03 -GBP/USD GBP 27,600 2011/11-2012/04 -SEK/USD SEK 75,292 2011/10-2012/03 -RUB/USD RUB 1,582,040 2011/11-2012/02 -USD/NTD USD 80,000 2011/10-2012/01 -CHF/USD CHF 10,106 2011/10-2012/03 -JPY/USD JPY 617,640 2011/11-2012/02 Currency option contracts -EUR/USD EUR 111,500 2011/12-2012/03 Currency swap contracts -USD/NTD USD 29,000 2011/07-2012/01 (A) Forward exchange contracts The Group entered into forward exchange contracts to sell various forward foreign currencies to hedge exchange rate risk of import and export proceeds. However, these forward exchange contracts are not accounted for under hedge accounting.

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(B) Currency option contracts The Group entered into currency option contracts to buy or sell various foreign currencies rights at agreed price in the future to hedge exchange rate risk of import and export proceeds. However, these currency option contracts are not accounted for under hedge accounting. (C) Currency swap contracts The Group entered into currency swap contracts to hedge cash flow risk of the floating-rate liability positions. However, these currency swap contracts are not accounted for under hedge accounting. D. The Group has no financial assets at fair value through profit or loss pledged to others. (3) Available-for-sale financial assets

2013/12/31 2012/12/31 2012/1/1 Current items: Listed and OTC stocks $ 309,505 $ 429,532 $ 404,679 Valuation adjustment 22,923 ( 35,436) ( 58,756) Accumulated impairment ( 79,247) ( 51,929) ( 12,000) $ 253,181 $ 342,167 $ 333,923 Non-current items: Listed and OTC stocks $ 26,592,087 $ 5,328,129 $ 5,383,934 Unlisted and non-OTC stocks 302,776 366,727 607,017 26,894,863 5,694,856 5,990,951 Valuation adjustment 8,159,934 4,988,365 1,735,573 Accumulated impairment ( 130,333) ( 61,232) ( 165,029) $ 34,924,464 $ 10,621,989 $ 7,561,495 A. The Group recognized the changes of fair value in other comprehensive income of $2,872,802 and $2,964,998 for the years ended December 31, 2013 and 2012, respectively. B. After revaluating and comparing the carrying amount of available-for-sale financial assets and its recoverable amounts, the Group recognized impairment loss amounting to $95,582 and $127,862 for the years ended December 31, 2013 and 2012, respectively. C. The Group has no available-for-sale financial assets pledged to others. (4) Financial assets measured at cost 2013/12/31 2012/12/31 2012/1/1 Non-current items: Unlisted and non-OTC stocks $ 278,830 $ 299,546 $ 311,925 Private fund 47,222 36,399 37,947 326,052 335,945 349,872 Less: accumulated impairment ( 164,411) ( 191,024) ( 165,300) $ 161,641 $ 144,921 $ 184,572

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A. In accordance with the Group’s intension, its investment in the private fund should be classified as “available-for-sale financial assets”. However, as the private fund is not traded in active market, and no sufficient industry and financial information on the private fund portfolio can be obtained, the fair value of the investment in private fund cannot be measured reliably. The Group classified those funds as “financial assets measured at cost”. B. After revaluating and comparing the carrying amount of financial assets measured at cost and its recoverable amounts, the Group recognized impairment loss amounting to $0 and $30,661 for the years ended December 31, 2013 and 2012, respectively. C. The Group has no financial assets measured at cost pledged to others. (5) Hedge accounting

2013/12/31 2012/12/31 2012/1/1 Assets (Liabilities) Assets (Liabilities) Assets (Liabilities) Current items: Forward exchange contracts $ 43,387 $ 116,334 $ 1,354,470 -cash flow hedges Forward exchange contracts ( 278,384) ( 408,375) - -cash flow hedges ($ 234,997) ($ 292,041) $ 1,354,470

A. The Group entered into derivative financial instruments contracts with financial institutions with good credit quality. The maximum exposure to credit risk at the balance sheet date is the carrying amount of derivative financial instruments for hedging. B. Cash flow hedges: Fair value of Period of gain (loss) Derivative derivative expected to be instruments instruments Period of recognized in statements designated as designated as anticipated of comprehensive Hedged item hedges hedges cash flow income 2013/12/31 Expected transactions Forward exchange ($ 234,997) 2013/09-2014/05 2013/09-2014/05 contracts 2012/12/31 Expected transactions Forward exchange ( 292,041) 2012/09-2013/04 2012/09-2013/04 contracts 2012/1/1 Expected transactions Forward exchange 1,354,470 2011/10-2012/06 2011/10-2012/06 contracts (A) The hedged highly probable forecast transactions denominated in foreign currency are expected to occur during the next 12 months. Amounts accumulated in “other comprehensive income” as of December 31, 2013 are recycled into profit or loss in the periods when the hedged asset acquired or the hedged liability assumed affects profit or loss. The Group has assessed that the effect of profit or loss arising from ineffective cash flow hedge is insignificant as the Group was effective mostly in executing the hedge transactions for the years ended December 31, 2013 and 2012.

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(B) Information on gain or loss arising from cash flow hedges recognized in profit or loss and other comprehensive income: For the years ended December 31, 2013 2012 Amount adjusted in other $ 57,044 ($ 1,646,511) comprehensive income Amount transferred from other ( 156,648) 2,287,512 comprehensive income to profit or loss (C) The unexpired contracts are as follows:

2013/12/31 2012/12/31 Contract amount Contract amount (Nominal principal) (Nominal principal) (in thousands) Contract period (in thousands) Contract period Derivative financial assets for hedging: Forward exchange contracts -GBP/USD GBP - - GBP 55,000 2012/09-2013/04 -EUR/USD EUR 120,000 2013/10-2014/05 EUR 100,000 2012/12-2013/04 -AUD/USD AUD 15,000 2013/10-2014/02 AUD 30,000 2012/11-2013/03 -JPY/USD JPY - - JPY 2,500,000 2012/09-2013/02 -SEK/USD SEK 100,000 2013/10-2014/02 SEK - - Derivative financial liabilities for hedging: Forward exchange contracts -NOK/USD NOK - - NOK 110,000 2012/09-2013/03 -EUR/USD EUR 500,000 2013/09-2014/04 EUR 400,000 2012/09-2013/03 -GBP/USD GBP 55,000 2013/09-2014/04 GBP 15,000 2012/09-2013/02 -SEK/USD SEK - - SEK 160,000 2012/12-2013/03 -AUD/USD AUD - - AUD 30,000 2012/11-2013/02 -RUB/USD RUB - - RUB 3,500,000 2012/09-2013/03 -CHF/USD CHF - - CHF 5,000 2012/09-2013/02

2012/1/1 Contract amount (Nominal principal) (in thousands) Contract period Derivative financial assets for hedging: Forward exchange contracts -GBP/USD GBP 31,000 2011/10-2012/05 -EUR/USD EUR 450,000 2011/10-2012/04 -SEK/USD SEK 112,000 2011/10-2012/03 -AUD/USD AUD 60,000 2011/10-2012/03 -NOK/USD NOK 77,000 2011/10-2012/03 -CHF/USD CHF 11,000 2011/10-2012/05 -JPY/USD JPY 4,500,000 2011/10-2012/06 -RUB/USD RUB 4,000,000 2011/10-2012/03

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(6) Notes and trades receivable 2013/12/31 2012/12/31 2012/1/1 Notes receivable $ 7,024,036 $ 6,353,146 $ 5,996,132 Trades receivable 75,012,610 66,688,038 47,306,659 82,036,646 73,041,184 53,302,791 Less: allowance for sales returns ( 4,510,103) ( 4,374,518) ( 2,202,340) and discounts Less: allowance for doubtful accounts ( 2,428,175) ( 2,479,292) ( 1,925,154) (accumulated impairment) $ 75,098,368 $ 66,187,374 $ 49,175,297 A. On February 4, 2012, the Group entered into an agreement with a financial institution to sell its trades receivable. Under the agreement, the Group is not required to bear uncollectible risk of the underlying trades receivable, but is liable for the losses incurred on any business dispute. As the Group met the derecognition criteria for financial assets, the Group derecognized the trades receivable sold to financial institution, net of the losses estimated for possible business disputes. Except for January 1, 2012, the outstanding trades receivable sold to the financial institution are as follows:

2013/12/31 Purchaser of Amount Trades trades receivable derecognized receivable sold Amount advanced Interest rate Taishin $ 15,252 $ 20,000 $ - - International Bank 2012/12/31 Purchaser of Amount Trades trades receivable derecognized receivable sold Amount advanced Interest rate Taishin $ 14,417 $ 20,000 $ - - International Bank B. The aging analysis of trades receivable that were past due but not impaired is as follows: 2013/12/31 2012/12/31 2012/1/1 Up to 90 days $ 15,365,480 $ 16,713,876 $ 8,823,934 91 to 180 days 443,121 324,570 204,454 Over 181 days 257,186 1,764 42,031 $ 16,065,787 $ 17,040,210 $ 9,070,419

There was no significant change for the credit quality of the above receivables after the assessment and they were still considered collectible, so the Group had no impairment concern.

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C. Individual assessment of impaired trades receivable: (A) Impaired but not past due 2013/12/31 2012/12/31 2012/1/1 Gross amount $ 635 $ 3,248 $ 339,863

(B) Impaired and past due 2013/12/31 2012/12/31 2012/1/1 Gross amount $ 2,427,540 $ 2,476,044 $ 1,585,291

(C) Movements for allowance for doubtful accounts (accumulated impairment) of trades receivable are as follows: For the years ended December 31, 2013 2012 At January 1 $ 2,479,292 $ 1,925,154 Provision (reversal) ( 94,309) 511,464 Write-offs ( 22,297) ( 2,423) Reclassifications - 132,095 Net exchange differences 65,489 ( 86,998) $ 2,428,175 $ 2,479,292 At December 31 D. The credit quality of trades receivable that are neither past due nor impaired based on the Group’s Credit Quality Control Policy is as follows: 2013/12/31 2012/12/31 2012/1/1 Group 1 $ 28,322,712 $ 17,884,716 $ 11,316,156 Group 2 23,685,833 24,909,302 22,792,590 $ 52,008,545 $ 42,794,018 $ 34,108,746

Group 1: Insured, or guaranteed by the third party, or the trading object is the associate. Group 2: Neither insured and guaranteed by the third party, nor the trading object is the associate. E. The maximum exposure to credit risk at December 31, 2013, December 31, 2012, and January 1, 2012 was the carrying amount of each class of trades receivable. F. The Group does not hold any collateral as security.

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(7) Inventories

2013/12/31 Allowance for Cost valuation loss Book value Raw materials $ 27,592,491 ($ 3,196,357) $ 24,396,134 Work in process 2,010,855 ( 147,234) 1,863,621 Finished goods 3,074,349 ( 270,835) 2,803,514 Merchandise inventories 54,669,230 ( 6,898,273) 47,770,957 Inventories in transit 494,786 - 494,786 $ 87,841,711 ($ 10,512,699) $ 77,329,012 2012/12/31 Allowance for Cost valuation loss Book value Raw materials $ 31,479,209 ($ 2,586,682) $ 28,892,527 Work in process 2,018,928 ( 115,236) 1,903,692 Finished goods 4,908,483 ( 320,567) 4,587,916 Merchandise inventories 49,423,291 ( 4,906,001) 44,517,290 Inventories in transit 589,999 - 589,999 $ 88,419,910 ($ 7,928,486) $ 80,491,424 2012/1/1 Allowance for Cost valuation loss Book value Raw materials $ 20,375,599 ($ 1,112,871) $ 19,262,728 Work in process 1,746,562 ( 99,266) 1,647,296 Finished goods 1,751,631 ( 130,078) 1,621,553 Merchandise inventories 37,919,515 ( 2,876,454) 35,043,061 Inventories in transit 322,909 - 322,909 $ 62,116,216 ($ 4,218,669) $ 57,897,547

The inventories recognized as increase in operating costs amounted to $3,260,150 and $3,727,639, of which $2,465,794 and $3,721,480 pertain to the decline in value of inventories for the years ended December 31, 2013 and 2012, respectively.

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(8) Investments accounted for under equity method 2013/12/31 2012/12/31 2012/1/1 Ownership Ownership Ownership Book Value (%) Book Value (%) Book Value (%) PEGA $ - - $ 23,033,759 24.08 $ 22,335,550 24.46 Others 360,189 419,998 370,809 $ 360,189 $ 23,453,757 $ 22,706,359 A. The financial information of the Group’s associates is summarized below: Assets Liabilities Revenue Profit 2013/12/31 $ 2,910,607 $ 1,271,064 $ 4,079,745 $ 29,933 2012/12/31 $ 395,518,3540 $ 265,606,611 $ 886,568,794 $ 6,202,947 2012/1/1 $ 301,927,297 $ 183,319,949

B. The fair value of the Group’s associates which have quoted market price is as follows: 2013/12/31 2012/12/31 2012/1/1 PEGA Note $ 20,709,707 $ 18,172,699 Others $ 157,695 214,915 120,186 $ 157,695 $ 20,924,622 $ 18,292,885

Note: On April 29, 2013, the Group disposed 103,017,000 shares of PEGA totaling $4,663,076 at the average price of $45.27 ( in dollars) per share. After this disposal, the Group’s ownership percentage of PEGA was reduced to 19.59% and the Group has lost significant influence over PEGA. The Group remeasured the investment retained in PEGA at its fair value, and reclassified it to “available-for-sale financial assets - non-current”. The value differences between the fair value and the carrying amounts with other comprehensive income previously recognized in relation to PEGA was reclassified to profit for the period amounting to $1,447,023. C. After revaluating and comparing the carrying amount of investments accounted for under equity method and its recoverable amount, the Group recognized impairment loss amounting in $0 and $53,714 for the years ended December 31, 2013 and 2012, respectively.

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(9) Property, plant and equipment Machinery and Miscellaneous Land Buildings equipment equipment Total At January 1, 2013 Cost $ 2,071,168 $ 6,345,722 $ 4,924,954 $ 4,908,216 $18,250,060 Accumulated depreciation - ( 1,730,602) ( 2,725,289) ( 3,030,037) ( 7,485,928) and impairment $ 2,071,168 $ 4,615,120 $ 2,199,665 $ 1,878,179 $ 10,764,132 At January 1, 2013 $ 2,071,168 $ 4,615,120 $ 2,199,665 $ 1,878,179 $ 10,764,132 Additions - 45,542 317,874 1,964,601 2,328,017 Disposals ( 5,986) ( 42,456) ( 13,180) ( 19,825) ( 81,447) Depreciation - ( 240,654) ( 585,661) ( 1,752,647) ( 2,578,962) Impairment - - ( 158,356) ( 25,483) ( 183,839) Reclassifications - 30,505 135,029 165,609 331,143 Net exchange differences 2,032 52,595 78,573 36,225 169,425 Effects due to changes in - - ( 375) ( 1,411) ( 1,786) consolidated entities At December 31, 2013 $ 2,067,214 $ 4,460,652 $ 1,973,569 $ 2,245,248 $ 10,746,683 At December 31, 2013 Cost $ 2,067,214 $ 6,474,369 $ 5,483,009 $ 7,017,449 $21,042,041 Accumulated depreciation - ( 2,013,717) ( 3,509,440) ( 4,772,201) ( 10,295,358) and impairment $ 2,067,214 $ 4,460,652 $ 1,973,569 $ 2,245,248 $ 10,746,683 Machinery and Miscellaneous Land Buildings equipment equipment Total At January 1, 2012 Cost $ 2,090,273 $ 6,170,284 $ 4,604,516 $ 3,247,137 $16,112,210 Accumulated depreciation - ( 1,521,705) ( 2,584,040) ( 1,937,812) ( 6,043,557) and impairment $ 2,090,273 $ 4,648,579 $ 2,020,476 $ 1,309,325 $ 10,068,653 At January 1, 2012 $ 2,090,273 $ 4,648,579 $ 2,020,476 $ 1,309,325 $ 10,068,653 Additions 72,801 123,922 415,421 1,589,977 2,202,121 Disposals - ( 687) ( 36,544) ( 19,724) ( 56,955) Depreciation - ( 242,526) ( 544,882) ( 1,262,116) ( 2,049,524) Reversal of impairment loss - - 24,180 - 24,180 Reclassifications ( 91,906) 142,014 328,124 256,507 634,739 Net exchange differences - ( 56,182) ( 47,265) ( 32,190) ( 135,637) Effects due to changes in - - 40,155 36,400 76,555 consolidated entities At December 31, 2012 $ 2,071,168 $ 4,615,120 $ 2,199,665 $ 1,878,179 $ 10,764,132 At December 31, 2012 Cost $ 2,071,168 $ 6,345,722 $ 4,924,954 $ 4,908,216 $18,250,060 Accumulated depreciation - ( 1,730,602) ( 2,725,289) ( 3,030,037) ( 7,485,928) and impairment $ 2,071,168 $ 4,615,120 $ 2,199,665 $ 1,878,179 $ 10,764,132

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A. After revaluating and comparing the carrying amount of property, plant and equipment and its recoverable amounts, the Group recognized impairment loss (reversal of impairment loss) amounting to $183,839 and ($24,180) for the years ended December 31, 2013 and 2012, respectively. B. Information about the property, plant and equipment that are pledged to others as collateral is provided in Note 8. (10) Intangible assets Computer Trademark software Goodwill Others Total At January 1, 2013 Cost $ 358,664 $ 893,610 $ 1,211,386 $ 660,722 $ 3,124,382 Accumulated amortisation ( 3,187) ( 755,896) ( 56,683) ( 285,489) ( 1,101,255) and impairment $ 355,477 $ 137,714 $ 1,154,703 $ 375,233 $ 2,023,127 At January 1, 2013 $ 355,477 $ 137,714 $ 1,154,703 $ 375,233 $ 2,023,127 Additions - 190,083 - 27,324 217,407 Disposals - ( 511) - - ( 511) Amortisation ( 70) ( 160,585) - ( 92,777) ( 253,432) Impairment - ( 1,609) ( 15,567) - ( 17,176) Reclassifications - 223,309 - ( 26,541) 196,768 Net exchange differences - 149 - 62 211 Effects due to changes in - - ( 7,238) - ( 7,238) consolidated entities At December 31, 2013 $ 355,407 $ 388,550 $ 1,131,898 $ 283,301 $ 2,159,156 At December 31, 2013 Cost $ 358,664 $ 1,323,629 $ 1,181,832 $ 623,617 $ 3,487,742 Accumulated amortisation ( 3,257) ( 935,079) ( 49,934) ( 340,316) ( 1,328,586) and impairment $ 355,407 $ 388,550 $ 1,131,898 $ 283,301 $ 2,159,156

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Computer Trademark software Goodwill Others Total At January 1, 2012 Cost $ 358,641 $ 856,322 $ 1,181,373 $ 581,569 $ 2,977,905 Accumulated amortisation ( 3,113) ( 704,866) - ( 205,725) ( 913,704) and impairment $ 355,528 $ 151,456 $ 1,181,373 $ 375,844 $ 2,064,201 At January 1, 2012 $ 355,528 $ 151,456 $ 1,181,373 $ 375,844 $ 2,064,201 Additions 23 64,917 - 62,192 127,132 Disposals - ( 235) - ( 2) ( 237) Amortisation ( 74) ( 77,805) - ( 87,386) ( 165,265) Impairment - - ( 56,940) ( 6,402) ( 63,342) Reclassifications - ( 240) ( 261) 25,098 24,597 Net exchange differences - ( 379) ( 1,316) ( 2) ( 1,697) Effect due to changes in - - 31,847 5,891 37,738 consolidated entities At December 31, 2012 $ 355,477 $ 137,714 $ 1,154,703 $ 375,233 $ 2,023,127 At December 31, 2012 Cost $ 358,664 $ 893,610 $ 1,211,386 $ 660,722 $ 3,124,382 Accumulated amortisation ( 3,187) ( 755,896) ( 56,683) ( 285,489) ( 1,101,255) and impairment $ 355,477 $ 137,714 $ 1,154,703 $ 375,233 $ 2,023,127 A. After revaluating and comparing the carrying amount of intangible assets and its recoverable amounts, the Group recognized impairment loss amounting to $17,176 and $63,342 for the years ended December 31, 2013 and 2012, respectively. B. The recoverable amount of goodwill has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by the management covering a five-year period. The recoverable amount calculated using the value-in-use was lower than their carrying amount, so the impairment loss had been recognized. The key assumptions used for value-in-use calculations included gross margin, growth rate and discount rate. Management determined budgeted gross margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect specific risks relating to the relevant operating segments.

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(11) Long-term prepaid rents ( shown as ‘Other non-current assets’ ) 2013/12/31 2012/12/31 2012/1/1 $ 1,005,185 $ 120,322 $ 305,552 Land use right In September, 2013, April, 2010, November, 2008, October, 2006, and July, 2002, the Group signed a land use right contract with Chongqing City Government and Wujiang City Government, respectively, for use of the land for a period of 40-50 years. All rentals had been paid on the contract dates. Moreover, the committee of Wujiang Economic and Technical Development Zone terminated the land use right of ASHINE by paying RMB 44,890,000 in February, 2012, and the Group recognized disposal gain of RMB 14,110,000. The Group recognized rental expenses of $7,009 and $2,937 for the years ended December 31, 2013 and 2012, respectively. (12) Short-term borrowings Type of borrowings 2013/12/31 Interest rate range Collateral Bank borrowings Credit borrowings $ 4,876,624 1.03%~1.87% - Type of borrowings 2012/12/31 Interest rate range Collateral Bank borrowings Credit borrowings $ 3,616,815 0.74%~1.87% - Secured borrowings 123,127 1.6%~3.35% Buildings, time deposits and pledged restricted deposits $ 3,739,942 Type of borrowings 2012/1/1 Interest rate range Collateral Bank borrowings Credit borrowings $ 2,738,361 0.98%~3.66% - Secured borrowings 82,495 4.581% Buildings, time deposits and pledged restricted deposits $ 2,820,856

(13) Financial liabilities at fair value through profit or loss 2013/12/31 2012/12/31 2012/1/1 Current items: Financial liabilities held for trading Non-hedging derivatives $ 372,190 $ 612,093 $ 37,052

A. The Group recognized net loss on financial liabilities held for trading amounting to $2,060,101 and $3,320,540 for the years ended December 31, 2013 and 2012, respectively.

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B. The unexpired contracts are as follows: 2013/12/31 2012/12/31 Contract amount Contract amount (Nominal principal) (Nominal principal) (in thousands) Contract period (in thousands) Contract period Derivative financial liabilities: Forward exchange contracts -EUR/USD EUR 380,200 2013/10-2014/03 EUR 448,000 2012/10-2013/04 -NOK/USD NOK 58,000 2013/12-2014/02 NOK 31,000 2012/11-2013/01 -AUD/USD AUD - - AUD 16,500 2012/10-2013/01 -GBP/USD GBP 76,800 2013/10-2014/04 GBP 47,000 2012/10-2013/03 -SEK/USD SEK 116,000 2013/11-2014/03 SEK 199,700 2012/11-2013/02 -RUB/USD RUB 3,022,000 2013/09-2014/03 RUB 2,550,000 2012/09-2013/03 -USD/NTD USD 3,500 2013/12-2014/02 USD 6,100 2012/11-2013/03 -CHF/USD CHF 10,600 2013/11-2014/02 CHF 11,500 2012/11-2013/02 Currency option contracts -RUB/USD RUB 1,880,640 2013/12-2014/03 RUB 1,409,278 2012/10-2013/03 -EUR/USD EUR 111,000 2013/11-2014/03 EUR - - 2012/1/1 Contract amount (Nominal principal) (in thousands) Contract period Derivative financial liabilities: Forward exchange contracts -AUD/USD AUD 10,000 2011/10-2012/02 -SEK/USD SEK 54,479 2011/11-2012/03 -USD/NTD USD 278,000 2011/11-2012/03 Currency swap contracts -USD/NTD USD 15,000 2011/07-2012/01 The information about the intention and contract terms of non-hedging derivative financial liabilities is provided in Note 6(2).

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(14) Long-term borrowings Borrowing period and Interest rate Type of borrowings repayment term range Collateral 2013/12/31 Credit borrowings - installment-repayment Mega International 2012.08.06~2015.08.06, 1.57%~ - $ 894,150 Commercial Bank payable in 3 semi-annual 1.92% installments, commencing 2 years after the initial date of borrowing The Shanghai Commercial 2012.11.08~2015.11.08, 1.36%~ - 521,588 & Savings Bank payable in 2 semi-annual 1.54% installments, commencing 2 years after the initial date of borrowing Others 2011.05~2017.05 2.42%~ Buildings 85,910 8.90% 1,501,648 Less: current portion of ( 301,354) long-term borrowings $ 1,200,294

Borrowing period and Interest rate Type of borrowings repayment term range Collateral 2012/12/31 Credit borrowings - installment-repayment Mega International 2010.10.18~2014.08.06, 1.05%~ - $ 871,200 Commercial Bank payable in 3 semi-annual 1.9249% installments, commencing 2 years after the initial date of borrowing The Shanghai Commercial 2010.04.06~2015.11.08, 1.5275%~ - 871,200 & Savings Bank payable in 3 semi-annual 1.56125% installments, commencing 2 years after the initial date of borrowing Others 2011.05~2019.05 2.42%~ Buildings 86,876 8.90% 1,829,276 Less: current portion of ( 801,283) long-term borrowings $ 1,027,993

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Borrowing period and Interest rate Type of borrowings repayment term range Collateral 2012/1/1 Credit borrowings - installment-repayment Mega International 2010.10.18~2014.08.06, 1.45%~ - $ 908,250 Commercial Bank payable in 3 semi-annual 1.55% installments, commencing 2 years after the initial date of borrowing The Shanghai Commercial 2010.04.06~2015.11.08, 1.0135%~ - 908,250 & Savings Bank payable in 3 semi-annual 1.815% installments, commencing 2 years after the initial date of borrowing Others 2011.05~2015.09 3.60%~ Buildings 1,936 8.90% 1,818,436 Less: current portion of ( 983,938) long-term borrowings $ 834,498 Under the borrowing contracts, the Group is required to maintain certain covenants semi-annually agreed by both parties, and the bank can inspect at any time when necessary. For the years ended December 31, 2013 and 2012, the Group did not violate any covenant. (15) Pensions A.(A)The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.

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(B) The amounts recognized in the balance sheet are determined as follows: 2013/12/31 2012/12/31 2012/1/1 Present value of funded obligations ($ 178,086) ($ 162,833) ($ 150,786) Fair value of plan assets 198,152 200,946 187,958 20,066 38,113 37,172 Unrecognized past service cost ( 1,716) ( 1,825) ( 3,277) Net asset in the balance sheet $ 18,350 $ 36,288 $ 33,895 (C) Changes in present value of funded obligations are as follows: 2013 2012 At January 1 $ 162,833 $ 150,786 Current service cost 13,839 3,205 Interest cost 2,780 2,642 Actuarial profit(gain) and loss 5,527 ( 13,444) Benefits paid ( 5,542) - Net exchange differences and others ( 1,351) 19,644 At December 31 $ 178,086 $ 162,833

(D) Changes in fair value of plan assets are as follows: 2013 2012 At January 1 $ 200,946 $ 187,958 Expected return on plan assets 3,683 3,922 Actuarial profit(gain) and loss ( 1,243) ( 1,886) Employer contributions 308 10,952 Benefits paid ( 5,542) - At December 31 $ 198,152 $ 200,946

(E) Amounts of expenses recognized in comprehensive income statements are as follows: For the years ended December 31, 2013 2012 Current service cost $ 13,839 $ 3,205 Interest cost 2,780 2,642 Expected return on plan assets ( 3,683) ( 3,922) Amorization and deferred amount ( 532) ( 733) Current pension costs $ 12,404 $ 1,192

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Details of costs and expenses recognized in the statement of comprehensive income are as follows: For the years ended December 31, 2013 2012 Operating costs $ 10,451 ($ 407) Selling expenses 569 347 General and administrative expenses 159 219 Research and development expenses 1,225 1,033 $ 12,404 $ 1,192 (F) Amounts recognized under other comprehensive income are as follows: For the years ended December 31, 2013 2012 Recognition for current period ($ 6,770) $ 11,558 Accumulated amount $ 4,788 $ 11,558

(G) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. The constitution of fair value of plan assets as of December 31, 2013 and 2012 is given in the Annual Labor Retirement Fund Utilization Report published by the government. Expected return on plan assets was a projection of overall return for the obligations period, which was estimated based on historical returns and by reference to the status of Labor Retirement Fund utilization by the Labor Pension Fund Supervisory Committee and taking into account the effect that the Fund’s minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks.

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(H) The principal actuarial assumptions used are as follows: For the years ended December 31, 2013 2012 2011 Discount rate 1.88%~2.00% 1.50%~1.88% 1.70%~2.00% Future salary increases 1.20%~4.00% 2.25%~3.00% 2.00%~4.00% Expected return on plan assets 1.75%~2.00% 1.50%~1.88% 1.70%~2.50%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory. (I) Historical information of experience adjustments is as follows: For the years ended December 31, 2013 2012 Present value of defined benefit obligation ($ 178,086) ($ 162,833) Fair value of plan assets 198,152 200,946 Surplus in the plan $ 20,066 $ 38,113 Experience adjustments on plan liabilities ($ 8,704) ($ 4,948) Experience adjustments on plan assets ($ 739) ($ 1,442)

(J) Expected contribution to the defined benefit pension plans of the Group within one year from December 31, 2013 are $293. B. (A) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (New Plan) under the Labor Pension Act, covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. (B) The Company’s mainland subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations. (C) The pension costs under the defined contribution pension plans of the Group were $862,790 and $603,567 for the years ended December 31, 2013 and 2012, respectively.

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(16) Provisions for liabilities Provisions for Provisions for Provisions for sales returns legal claims warranty and discounts and royalty Total At January 1, 2013 $ 10,369,087 $ 13,855,414 $ 3,183,655 $ 27,408,156 Provision (reversal) 9,737,295 37,184,031 1,820,145 48,741,471 Write-offs ( 9,665,568) ( 34,863,015) - ( 44,528,583) Net exchange differences 333,156 404,776 90,457 828,389 At December 31, 2013 $ 10,773,970 $ 16,581,206 $ 5,094,257 $ 32,449,433

Provisions for Provisions for Provisions for sales returns legal claims warranty and discounts and royalty Total At January 1, 2012 $ 8,841,428 $ 6,782,274 $ 2,104,113 $ 17,727,815 Provision (reversal) 7,622,354 23,513,546 1,186,584 32,322,484 Write-offs ( 5,751,139) ( 16,150,625) ( 49,678) ( 21,951,442) Net exchange differences ( 343,556) ( 289,781) ( 57,364) ( 690,701) At December 31, 2012 $ 10,369,087 $ 13,855,414 $ 3,183,655 $ 27,408,156

Analysis of total provisions: 2013/12/31 2012/12/31 2012/1/1 Current $ 32,449,433 $ 27,408,156 $ 17,727,815

A. Provisions for warranty The Group provides warranties on 3C products sold. Provision for warranty is estimated based on these products’ historical warranty data. A provision is recognized as current when it is expected to be used in one year. B. Provisions for sales returns and discounts The Group allows sales returns and gives discounts on 3C products sold. Provision for sales returns and discounts is estimated based on these products’ historical data and other known factors. A provision is recognized as current when it is expected to be used in one year. C. Provisions for legal claims and royalty The Group recognizes provision for legal claims or royalty fees made by the patentees against the Group. After taking appropriate legal advice, the management evaluates the probable claimable fees accrued as provision for liabilities. The provision charge is recognised in profit or loss within general and administrative expenses.

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(17) Common shares A. As of December 31, 2013, the Company’s authorized capital was $47,500,000, consisting of 4,750,000,000 shares of common stock (including 50,000,000 shares which were reserved for employee stock options), and the outstanding capital was $7,427,603 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. Movements in the number of the Company’s ordinary shares outstanding are as follows: 2013 2012 At January 1 752,760,280 752,760,280 Shares reacquired ( 10,000,000) - At December 31 742,760,280 752,760,280

B. As of December 31, 2013, the Company issued Global Depositary Receipts (GDRs), of which 5,519,000 units of the GDRs are now listed on the Luxembourg Stock Exchange (The Board of Directors authorized to transfer its GDRs from the London Stock Exchange to the Luxembourg Stock Exchange on January 30, 2013, and the change had taken effect on March 28, 2013). Per unit of GDR represents 5 shares of the Company’s common stock and total GDRs represent 27,597,000 shares of the Company’s common stock. The terms of GDR are as follows: (A) Voting rights GDR holders may, pursuant to the Depositary Agreement and the relevant laws and regulations of the R.O.C., exercise the voting rights pertaining to the underlying common shares represented by the GDRs. (B) Dividends, stock warrants and other rights GDR holders and common shareholders are all entitled to receive dividends. The Depositary may issue new GDRs in proportion to GDRs holding ratios or raise the number of shares of common stock represented by each unit of GDR or sell stock dividends on behalf of GDR holders and distribute proceeds to them in proportion to their GDRs holding ratios. C. Treasury shares (A) To enhance the Company’s credit and shareholders’ equity, the Company reaquired its treasury shares. During the period from July 2, 2013 to August 20, 2013, the shares reaquired were 10,000,000 shares amounting to $2,525,987. All of the treasury shares had been retired on November 21, 2013. In addition, the Company did not reaquire its shares in 2012. (B) Pursuant to the R.O.C. Securities and Exchange Law, the number of shares bought back as treasury shares should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.

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(C) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should not be pledged as collateral and the shareholder’s rights should not be enjoyed before transfer. (D) Pursuant to the R.O.C. Securities and Exchange Law, treasury shares should be transferred to the employees within three years from the reacquisition date and shares not transferred within the three-year period should be retired. Treasury shares to enhance the Company’s credit and the shareholders’ equity should be retired within six months from the reacquisition date. (18) Capital surplus Pursuant to the R.O.C. Company Law, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. Difference between Changes in proceeds from associates and joint acquisition or disposal ventures accounted of subsidiary and for under Share premium book value equity method Total At January 1, 2013 $ 4,284,888 $ 224,501 ($ 204,169) $ 4,305,220 Effect of changes in - 2,965 247,828 250,793 percentage of ownership Effect of disposals - - ( 46,854) ( 46,854) Retirement of ( 56,922) - - ( 56,922) treasury shares At December 31, 2013 $ 4,227,966 $ 227,466 ($ 3,195) $ 4,452,237

Difference between Changes in proceeds from associates and joint acquisition or disposal ventures accounted of subsidiary and for under Share premium book value equity method Total At January 1, 2012 $ 4,284,888 $ - $ 5,614 $ 4,290,502 Effect of changes in - 132,640 ( 209,774) ( 77,134) percentage of ownership Effect of disposals - 91,861 ( 9) 91,852 At December 31, 2012 $ 4,284,888 $ 224,501 ($ 204,169) $ 4,305,220

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(19) Retained earnings A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. When such legal reserve amounts to the total authorized capital, the Company shall not be subject to this requirement. The Company may then appropriate a certain amount as special reserve according to relevant regulations or as required by the government. The remaining balance shall be distributed or reversed by the board of directors as follows: appropriate 10% of capital stock as capital interest, no less than 1% as employees’ bonuses, and no more than 1% as directors’ and supervisors’ bonuses. When employees’ bonuses are distributed in the form of shares, the recipients may include the employees of subsidiaries. After the distribution of earnings, the remaining earnings and prior years’ undistributed earnings, if any, may be appropriated according to a resolution adopted in the shareholders’ meeting. B. The Company is facing a rapidly changing industrial environment, with the life cycle of the industry in the stable growth phase. In light of the long-term financial plan of the Company and the demand for cash by the stockholders, the Company should distribute cash dividends of not less than 10% of the total dividends declared. C. Except for covering accumulated deficit, increasing capital or payment of cash in proportion to ownership percentage, the legal reserve shall not be used for any other purpose. The amount capitalized or the cash payment shall be limited to the portion of legal reserve which exceeds 25% of the paid-in capital. D. (A) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. (B) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. E. The Company estimates the amount of employees’ bonuses and directors’ and supervisors’ remuneration according to the Company Law and the Company’s articles of incorporation. The employees’ bonuses and directors’ and supervisors’ remuneration were estimated and recognized based on a specific percentage approved by the management in accordance with the Company’s articles of incorporation. The Company recognized employees’ bonuses of $928,107 and $971,367 and directors’ and supervisors’ remuneration of $185,621 and $194,273 for the years ended December 31, 2013 and 2012, respectively. The number of shares of the dividend distribution is based on the closing price of the day before the

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shareholders’ meeting date and considering the effect of ex-rights and ex-dividends. There was no difference between the proposed amounts of employees’ bonuses amounting to $971,367 and directors’ and supervisors’ remuneration amounting to $194,273 by the Board of Directors and the amounts accrued as expenses in the 2012 financial statements. Information on the appropriation of the Company’s employees’ bonus and directors’ and supervisors’ remuneration as proposed by the Board of Directors and approved by the shareholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. F. As resolved by the shareholders on June 12, 2012, the Company recognized cash dividends distributed to owners amounting to $10,915,024 ($14.5 (in dollars) per share) for the appropriation of 2011 earnings. On June 17, 2013, the shareholders resolved to distribute cash dividends to owners amounting to $14,302,445 ($19 (in dollars) per share) for the appropriation of 2012 earnings. G. The appropriations of 2013 earnings had been proposed by the Board of Directors on March 27, 2014. Details are summarized as follows: 2013 Dividends per share Amount (in dollars) Cash dividends $ 14,483,825 $ 19.50 Employees’ cash bonus 928,107 Directors’ and supervisors’remuneration 185,621 As of March 27, 2014, the appropriations of 2013 earnings stated above had not been resolved by the shareholders. (20) Other equity items Unrealized gain Financial statements on valuation of translation Cash flow available-for-sale differences of hedges financial assets foreign operations Total At January 1, 2013 ($ 292,041) $ 4,480,772 ($ 1,728,666) $ 2,460,065 -the Company - 2,689,834 736,794 3,426,628 -Subsidiaries 57,044 200,803 82,121 339,968 -Associates - ( 17,835) 638,358 620,523 At December 31, 2013 ($ 234,997) $ 7,353,574 ($ 271,393) $ 6,847,184

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Unrealized gain Financial statements on valuation of translation Cash flow available-for-sale differences of hedges financial assets foreign operations Total At January 1, 2012 $ 1,354,470 $ 1,515,774 $ - $ 2,870,244 -the Company - 2,959,470 ( 833,599) 2,125,871 -Subsidiaries ( 1,646,511) ( 7,057) ( 258,634) ( 1,912,202) -Associates - 12,585 ( 636,433) ( 623,848) At December 31, 2012 ($ 292,041) $ 4,480,772 ($ 1,728,666) $ 2,460,065

(21) Operating revenue For the years ended December 31, 2013 2012 Sales revenue $ 463,286,507 $ 448,684,621 (22) Other income For the years ended December 31, 2013 2012 Interest income $ 623,855 $ 515,918 Dividend income 1,089,888 428,514 $ 1,713,743 $ 944,432

(23) Other gains (losses)

For the years ended December 31, 2013 2012 Net losses on financial liabilities at fair value ($ 2,060,101) ($ 3,320,540) through profit or loss Net gains on financial assets at fair value 1,897,671 1,704,201 through profit or loss Net currency exchange gains 2,809,730 4,212,351 Gains on disposal of investments 1,583,541 22,462 Compensation, subvention and other net gains 1,025,805 221,990 $ 5,256,646 $ 2,840,464

(24) Costs and expenses by nature For the years ended December 31, 2013 2012 Operating Operating Operating Operating costs expenses Total costs expenses Total Employee benefit $ 3,583,345 $ 17,489,161 $ 21,072,506 $ 3,045,255 $ 13,976,861 $ 17,022,116 expenses Depreciation 1,888,787 690,175 2,578,962 1,408,851 640,673 2,049,524 Amortization 29,561 371,196 400,757 32,995 280,738 313,733

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(25) Employee benefit expenses For the years ended December 31, 2013 2012 Wages and salaries $ 18,683,667 $ 15,111,351 Labor and health insurance 1,163,038 967,036 Pension (Note) 875,194 604,759 Other personnel expenses 350,607 338,970 $ 21,072,506 $ 17,022,116

Note: Including the pension expense under the defined contribution plans and defined benefit plans. (26) Income tax A. Income tax expense (A) Components of income tax expense: For the years ended December 31, 2013 2012 Current income tax: Current income tax on profits for the year $ 3,935,769 $ 4,246,847 Additional 10% tax on unappropriated earnings 594,796 402,210 Difference between prior year’s 836,600 ( 192,360) income tax estimation and assessed results Total current income tax 5,367,165 4,456,697 Deferred income tax: Origination and reversal of temporary 127,273 69,338 differences Income tax expense $ 5,494,438 $ 4,526,035

(B) The income tax relating to components of other comprehensive income is as follows:

For the years ended December 31, 2013 2012 Changes in fair value on $ 303,525 $ 328,496 available-for-sale financial assets Currency translation differences ( 28,028) ( 30,916) Actuarial gains/losses on defined ( 7) - benefit obligations $ 275,490 $ 297,580

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B. Reconciliation between income tax expense and accounting profit: For the years ended December 31, 2013 2012 Income tax calculated based on profit $ 4,741,582 $ 4,827,524 before tax and statutory tax rate Effect from items disallowed by tax regulations ( 598,932) ( 429,690) Effect from investment tax credit ( 12,494) 1,280 Effect from net operating loss carryforward ( 65,341) ( 57,852) Difference between prior year’s income tax 836,600 ( 192,360) estimation and assessed results Additional 10% tax on unappropriated earnings 594,796 402,210 Income tax refunded by the tax authorities - ( 177,714) Others ( 1,773) 152,637 Income tax expense $ 5,494,438 $ 4,526,035 C. Amounts of deferred income tax assets or liabilities as a result of temporary differences, loss carryforwards and investment tax credits are as follows: For the year ended December 31, 2013 Recognized in other Effect of Recognized in comprehensive exchange January 1 profit or loss income difference December 31 Temporary differences: - Deferred income tax assets: Decline in value of inventories $ 1,373,922 $ 669,740 $ - $ 27,124 $ 2,070,786 Unrealized profit from sales 733,236 ( 228,628) - ( 964) 503,644 Unrealized purchase discounts 229,592 ( 140,132) - - 89,460 Unrealized sales discounts 464,004 582,711 - 17,649 1,064,364 Unrealized provisions 1,074,446 ( 123,369) - 48,376 999,453 Other unrealized expenses 738,646 453,097 - 17,674 1,209,417 Loss carryforwards 215,514 ( 82,701) - 147 132,960 Investment tax credits 18,050 ( 18,050) - - - Others 299,467 312,254 7 7,736 619,464 Subtotal 5,146,877 1,424,922 7 117,742 6,689,548 - Deferred income tax liabilities: Investment income from ( 4,031,790) ( 1,379,771) - - ( 5,411,561) foreign investees Currency translation differences ( 146,360) 86,513 28,028 2 ( 31,817) Unrealized gain on valuation of ( 496,433) - ( 303,525) - ( 799,958) available-for-sale financial assets Others ( 62,140) ( 258,937) - ( 4,430) ( 325,507) Subtotal ( 4,736,723) ( 1,552,195) ( 275,497) ( 4,428) ( 6,568,843) ($ 127,273) ($ 275,490) Total $ 410,154 $ 113,314 $ 120,705

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For the year ended December 31, 2012 Recognized in other Effect of Recognized in comprehensive exchange January 1 profit or loss income difference December 31 Temporary differences: - Deferred income tax assets: Decline in value of inventories $ 680,867 $ 715,891 $ - ($ 22,836) $ 1,373,922 Unrealized profit from sales 621,530 114,393 - ( 2,687) 733,236 Unrealized purchase discounts 333,289 ( 103,697) - - 229,592 Unrealized sales discounts 467,899 11,956 - ( 15,851) 464,004 Unrealized provisions 877,456 233,743 - ( 36,753) 1,074,446 Other unrealized expenses 573,526 176,077 - ( 10,957) 738,646 Loss carryforwards 156,224 61,251 - ( 1,961) 215,514 Investment tax credits 171,151 ( 153,101) - - 18,050 Others 179,191 117,818 - 2,458 299,467 Subtotal 4,061,133 1,174,331 - ( 88,587) 5,146,877 - Deferred income tax liabilities: Investment income from ( 2,797,522) ( 1,234,268) - - ( 4,031,790) foreign investees Currency translation differences ( 177,278) 2 30,916 - ( 146,360) Unrealized gain on valuation of ( 167,937) - ( 328,496) - ( 496,433) available-for-sale financial assets Others ( 52,985) ( 9,402) - 247 ( 62,140) Subtotal ( 3,195,722) ( 1,243,668) ( 297,580) 247 ( 4,736,723) Total $ 865,411 ($ 69,337) ($ 297,580) ($ 88,340) $ 410,154 D. According to Act for Industrial Innovation and Statute for Upgrading Industries (before its abolishment), details of investment tax credits and unrecognized deferred income tax assets are as follows: 2012/12/31 Unrecognized Unused tax deferred income tax Final year tax Qualifying items credits assets credits are due Research and development, $ 156,176 $ 138,126 2013 employees training Machinery and equipment 686 686 2013 2012/1/1 Unrecognized Unused tax deferred income tax Final year tax Qualifying items credits assets credits are due Research and development, $ 286,353 $ 115,202 2012-2013 employees training

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E. Expiration dates of unused net operating loss carryfowards and amounts of unrecognized deferred income tax assets are as follows: 2013/12/31 Year Unused Unrecognized deferred incurred Amount filed/ assessed amount income tax assets Year of expiration 2002 $ 12,542 $ - $ - 2016 2003 9,563 - - 2017 2004 273,741 256,991 256,991 2014-2018 2005 285,882 267,642 205,939 2015 2006 337,163 327,693 265,155 2016 2007 251,640 250,799 250,799 2017 2008 123,787 123,787 99,508 2018 2009 170,539 170,539 124,529 2019 2010 260,570 260,570 256,391 2020 2011 474,123 456,725 430,115 2016-2021 2012 880,401 799,726 376,279 2016-2022 2013 245,082 245,082 132,333 2023 2012/12/31 Year Unused Unrecognized deferred incurred Amount filed/ assessed amount income tax assets Year of expiration 2002 $ 12,220 $ 12,220 $ 1,080 2016 2003 245,340 236,346 227,852 2013-2017 2004 273,729 263,778 263,364 2014-2018 2005 285,882 268,479 206,776 2015 2006 337,163 337,163 274,625 2016 2007 251,640 251,640 251,640 2017 2008 125,939 124,248 99,969 2013-2018 2009 172,660 172,660 126,649 2019 2010 260,570 260,570 100,132 2020 2011 575,145 566,987 199,922 2016-2021 2012 981,860 980,170 492,532 2016-2022 2012/1/1 Year Unused Unrecognized deferred incurred Amount filed/ assessed amount income tax assets Year of expiration 2002 $ 12,740 $ 12,740 $ 1,126 2016 2003 245,736 236,742 227,887 2013-2017 2004 273,748 263,797 263,366 2014-2018 2005 285,882 268,479 206,776 2015 2006 337,163 337,163 274,625 2016 2007 258,325 254,311 254,311 2012-2017 2008 126,007 124,263 99,984 2013-2018 2009 172,660 172,660 126,649 2019 2010 392,889 392,889 143,328 2020 2011 722,282 719,511 65,930 2016-2021

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F. The amounts of deductible temporary differences that were not recognized as deferred income tax assets are as follows: 2013/12/31 2012/12/31 2012/1/1 Deductible temporary differences $ 1,111,364 $ 914,812 $ 624,093

G. As of December 31, 2013, December 31, 2012 and January 1, 2012, the Group has recognized all significant taxable temporary differences associated with investments in subsidiaries as deferred income tax liabilities. H. The Tax Authority has examined the Company’s income tax returns through 2011. I. Unappropriated retained earnings: 2013/12/31 2012/12/31 2012/1/1 Earnings generated in and $ 90,066,124 $ 87,540,465 $ 77,642,092 after 1998

J. Imputation credit account (ICA) and creditable ratio 2013/12/31 2012/12/31 2012/1/1 (A) ICA balance $ 12,919,477 $ 12,345,070 $ 12,143,365

2012 (Actual) 2011 (Actual) (B) Creditable ratio for earnings distribution 16.55% 17.43% (27) Earnings per share

For the year ended December 31, 2013 Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary $ 21,449,895 748,395 $ 28.66 shareholders of the parent Diluted earnings per share Assumed conversion of all dilutive - 5,094 potential ordinary shares - employees’ bonus Profit attributable to ordinary $ 21,449,895 753,489 $ 28.47 shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares

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For the year ended December 31, 2012 Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary $ 22,463,572 752,760 $ 29.84 shareholders of the parent Diluted earnings per share Assumed conversion of all dilutive - 4,141 potential ordinary shares - employees’ bonus Profit attributable to ordinary $ 22,463,572 756,901 $ 29.68 shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares (28) Operating leases The Group leases offices, warehouse and parking lots to others under operating lease agreements. The Group recognized rental expenses of $872,170 and $765,304 for the years ended December 31, 2013 and 2012, respectively. Information about the future aggregate minimum lease payments under non-cancellable operating leases is provided in Note 9.

(29) Transaction that resulted in partial cash flows Cash received from acquisition of subsidiaries: For the years ended December 31, 2013 2012 Acquisition cost (cash) $ - $ 11,125 Decrease in financial assets carried at cost - 31,015 Non-cash assets acquired - ( 820,781) Liabilities assumed - 852,973 Goodwill - ( 56,599) Non-controlling interest - 388,480 Other losses - ( 261) Cash received from acquisition $ - $ 405,952

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7. RELATED PARTY TRANSACTIONS (1) Parent and ultimate controlling party The Company’s shares are widely held, so there is no ultimate parent or controlling party. (2) Significant transactions and balances with related parties A. Sales of goods - associates: For the years ended December 31, 2013 2012 $ 77,705 $ 2,062,047 Sales of goods The terms of the above transactions are due 30 to 90 days after the date of delivery, open account 60 days or negotiated by both parties, which are similar to those for third parties. B. Purchases of goods and services - associates: For the years ended December 31, 2013 2012 Purchases of goods $ 22,851,883 $ 136,537,806 Purchases of services 151,490 1,498,557 $ 23,003,373 $ 138,036,363 Purchase terms are open account 45 to 120 days, 45 to 90 days after the date of acceptance or within 1 to 6 months, which are similar to those for third parties. C. Trades receivable and other receivables - associates: 2013/12/31 2012/12/31 2012/1/1 Trades receivable $ 480 $ 83,040 $ 577,442 Other receivables 464 359 7,330 $ 944 $ 83,399 $ 584,772 The trade receivables arise mainly from sales transactions, and are unsecured in nature and bear no interest. D. Trades payable and other items of current liabilities - associates: 2013/12/31 2012/12/31 2012/1/1 Trades payable $ 107,561 $ 4,972,758 $ 8,681,583 Other items of current liabilities 18 876,766 791,178 $ 107,579 $ 5,849,524 $ 9,472,761

The trade payables arise mainly from purchase transactions, and bear no interest. (3) Key management compensation For the years ended December 31, 2013 2012 Salaries and other short-term employee $ 631,843 $ 639,394 benefits Post-employment benefits 4,421 4,226 $ 636,264 $ 643,620

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8. PLEDGED ASSETS Book Value Pledged assets Item 2013/12/31 2012/12/31 2012/1/1 Purpose Other current assets Pledged restricted deposits, $ 155,303 $ 123,315 $ 201,581 Deposits in security, and other non-current time deposits and security decided by court, assets refundable deposits import duty book loans and customs duty guarantee, etc. Property, plant Buildings 99,935 172,006 18,653 Bank loans and equipment $ 255,238 $ 295,321 $ 220,234 9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS (1) Contingencies A. Lawsuits for infringement of intellectual property rights (A) In May 2007, a US company filed a lawsuit against the Company and its US subsidiary for patent infringement. In January 2012, the Company was ordered by the court to compensate the plaintiff, but the Company has filed with a higher court. The higher court changed the original judgment and the Company finally won the case. Based on the final outcome of the case, the Company claimed from the plaintiff for reimbursement of the litigation fee. In January 2011, the plaintiff, a US company, also filed a lawsuit against the Company and its US subsidiary for patent confirmation, and the lawsuit is currently under investigation. (B) Several patentees filed lawsuits or investigations for patent infringement including LAN chip, PCI-Express switch, the patent of Blu-ray, Dynamic voltage scaling function for solid state disk, DDR, FLASH memory, LCD, Bluetooth, BIOS, Image chip, thermal management method and device, Display, Bluetooth HS technology and notebooks, Eee PC, products of Wireless LAN, products of Wireless telecommunication, router with dual channel transmission function, and equipments with Andriod system against the Company. These lawsuits or investigations are currently under investigation in a California court, in a Texas court, in a Delaware court, in a Virginia court and in United States International Trade Commission. The Company cannot presently determine the ultimate outcome of these lawsuits, but has already recognized the possible loss in the books. (C) Several patentees filed lawsuits or investigations for patent infringement including mobile products with switching signals based on the signal strength, products with the image resizing and scanning format conversion, digital image processor, interactive video system, communication switch technique, Tablet PC with user-selectable log in and unlock function, products of Web Storage, products of display technology, products with buffer memory and buffer access, SED hard discs, Windows BitLocker function products, Wireless Router products with antenna connector, radiator of display card, wireless Internet

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products with monitor functions, Bluetooth and wireless communication products, Padfone series products, NOR Flash and XtraROM chip products, products of auto-rotate for turn on/off functions, GaN LED products, products with UMTS network devices, mobile processor products, and multi-core ARM processor products against the Company. These lawsuits or investigations are currently under investigation in a Texas court, in a California court, in a Florida court, in a Delaware court, in a Massachusetts court, in a Germany court, in a Shanghai court and in a Taiwan intellectual property court. The Company cannot presently determine the ultimate outcome and effect of these lawsuits. B. Lawsuits for consumer rights In February 2012, consumer F filed a lawsuit for GPS and WiFi function being interfered due to the design of PAD case against the Company and its US subsidiary in a Northern California court. The parties involved in the lawsuit have currently reached a compromise, but the Company has not yet fulfilled its obligation. C. In July 2013, a US company N filed a lawsuit against the Company and its US subsidiary for overstated advertising on Wi-Fi router products, unfair competition and violation of FCC regulations. The lawsuit or investigation is currently under investigation in a Northern California court. The Company cannot presently determine the ultimate outcome of this lawsuit, but has already recognized the possible loss in the books. D. A plaintiff filed a criminal with civil suit against the Company and its subdiary, ASMEDIA, for infringement of patents. On August 30, 2012 and April 16, 2013, the Intellectual Property Rights Police Team (IPRP) has searched ASMEDIA office and executed seizure of related evidence. The lawsuit is currently under examination in Taiwan Taipei District Court. ASMEDIA has appointed the attorney to deal with the cases through the legal process and go through subsequent related matters and to cooperate with authority investigation. ASMEDIA cannot presently determine the effect, but the Company and ASMEDIA expect the above cases have no material effect on their operating and financial position. (2) Commitments A. To ensure the supply of raw materials, the Company entered into an agreement with a supplier for a guaranteed quantity of materials supply at a discount to market price or at an agreed price. The payment was recognized as prepayment of $0, $0 and $150,667 as of December 31, 2013, December 31, 2012 and January 1, 2012, respectively. B. Operating lease commitments The Group leases offices, warehouse and parking lots under non-cancellable operating lease agreements. The future aggregate minimum lease payments are as follows:

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2013/12/31 2012/12/31 2012/1/1 Less than 1 year $ 347,420 $ 354,552 $ 383,677 Between 1 and 2 years 296,887 191,322 239,252 Between 2 and 3 years 200,598 178,736 76,201 Between 3 and 4 years 141,941 157,305 75,688 Over 4 years 51,030 166,861 156,341

10. SIGNIFICANT DISASTER LOSS: None. 11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE: None. 12. OTHERS (1) Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the liability ratio. This ratio is calculated as total liabilities by total assets. Total liabilities is calculated as “current liabilities plus non-current liabilities” as shown in the consolidated balance sheet. During 2013, the Group’s strategy was to maintain the liability ratio within reasonable security range, which was unchanged from 2012. The liability ratios are as follows: 2013/12/31 2012/12/31 2012/1/1 Total liabilities $ 159,101,271 $ 140,245,722 $ 107,667,896 Total equity 136,971,484 127,787,655 116,062,376 Total assets $ 296,072,755 $ 268,033,377 $ 223,730,272 Liability ratio 53.74% 52.32% 48.12%

(2) Financial instruments A. Fair value information of financial instruments Except for the following financial instruments, the carrying values of financial instruments measured at non fair value (including cash and cash equivalents, notes/trades receivable, other receivables, refundable deposits, short-term borrowings, notes/trades payable, other payables - accrued expenses, other current liabilities and guarantee deposits received) are reasonably approximate to the fair value. Please refer to Note 12(3) for the fair value information of financial instruments measured at fair value.

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2013/12/31 2012/12/31 2012/1/1 Book value Fair value Book value Fair value Book value Fair value Financial liabilities $ 1,501,648 $ 1,501,648 $ 1,829,276 $ 1,829,276 $ 1,818,436 $ 1,818,436 Long-term borrowings (including current portion) B. Financial risk management policies (A) The Group’s operating activities expose the Group to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance. The Group uses derivative financial instruments to hedge certain risk exposures. Please refer to Notes 6(2), 6(5) and 6(13). (B) The Group’s key financial plans are all reviewed by the board of directors under the related principles and internal control system. When executing the financial plans, the Group’s treasury departments will follow the financial operating procedures in accordance with the overall financial risk management and proper segregation of duties. C. Nature and degree of significant financial risks (A) Market risk Foreign exchange risk a. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. b. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. To manage their foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, the Group uses forward exchange contracts, currency swap contracts and currency option contracts to hedge. Foreign exchange risk arises when future commercial transactions or recognized assets or liabilities are denominated in a currency that is not the entity’s functional currency. c. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. d. The risk management policy of the Group treasury is to hedge between 75% and 100% of anticipated cash flows (mainly export sales) in each major foreign currency for the subsequent 12 months. Approximately 90% and 95% of projected sales for the years ended December 31, 2013 and 2012, respectively, qualify as “highly probable” forecast

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transactions for hedge accounting purposes. e. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD and EUR). Non-monetary items are assessed to have no significant impact on the Group. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

2013/12/31 Foreign Sensitivity Analysis currency Extent Effect on Effect on other amount Exchange Book value of profit comprehensive (In dollars) rate (NTD) variation or loss income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD $ 1,501,489,689 29.805 $ 44,751,900 1% $ 447,519 $ - EUR:USD 301,854,905 41.09 12,403,218 1% 124,032 - Financial liabilities Monetary items USD:NTD 3,932,797,248 29.805 117,217,022 1% 1,172,170 - EUR:USD 74,548,193 41.09 3,063,185 1% 30,632 - 2012/12/31 Foreign Sensitivity Analysis currency Extent Effect on Effect on other amount Exchange Book value of profit comprehensive (In dollars) rate (NTD) variation or loss income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD $ 1,402,498,690 29.04 $ 40,728,562 1% $ 407,286 $ - EUR:USD 280,557,498 38.49 10,798,658 1% 107,987 - Financial liabilities Monetary items USD:NTD 3,528,632,681 29.04 102,471,493 1% 1,024,715 - EUR:USD 62,770,439 38.49 2,416,034 1% 24,160 -

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2012/1/1 Foreign Sensitivity Analysis currency Extent Effect on Effect on other amount Exchange Book value of profit comprehensive (In dollars) rate (NTD) variation or loss income (Foreign currency: functional currency) Financial assets Monetary items USD:NTD $ 911,800,716 30.275 $ 27,604,767 1% $ 276,048 $ - EUR:USD 351,013,985 39.18 13,752,728 1% 137,527 - Financial liabilities Monetary items USD:NTD 2,083,890,167 30.275 63,089,775 1% 630,898 - EUR:USD 35,007,718 39.18 1,371,602 1% 13,716 - Price risk a. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group. b. The prices of the Group’s investments in equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased by 1% with all other variables held constant, non-operating revenues for the years ended December 31, 2013 and 2012 would have increased by $1,280 and $50, respectively. Other comprehensive income - unrealized gain on valuation of available-for-sale financial assets would have increased by $351,776 and $109,642, respectively. Interest rate risk a. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During 2013 and 2012, the Group’s borrowings at variable rate were denominated in USD and NTD. b. The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions. The Group expects no significant interest rate risk would arise.

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c. At December 31, 2013 and 2012, if interest rates on borrowings had been 1 basis point (0.01%) higher with all other variables held constant, non-operating income and expenses for the years ended December 31, 2013 and 2012, would have been $842 and $836 lower, respectively, mainly as a result of higher interest expense on floating rate borrowings. Credit risk a. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board of directors. The utilization of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits and short-term financial products guaranteed income with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. For banks and financial institutions, only those with a rating of “A” class above as evaluated by an independent party are accepted as counterparties. b. No credit limits were exceeded during 2013 and 2012, and management does not expect any significant losses from non-performance by these counterparties. c. The credit quality information of financial assets that are neither past due nor impaired, the aging analysis of financial assets that were past due but not impaired and the individual analysis of financial assets that had been impaired is provided in the statement for each type of financial assets as described in Note 6. (B) Liquidity risk a. Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group treasury to monitor rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s cash flow plans and compliance with internal balance sheet ratio targets. b. The Group’s treasury invests surplus cash in demand deposits, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. At December 31, 2013, December 31, 2012, and January 1,

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2012, the Group held financial assets at fair value through profit or loss of $10,209,126, $9,202,568 and $10,884,188, respectively, that are expected to readily generate cash inflows for managing liquidity risk. c. The table below analyses the Group’s non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. 2013/12/31 Less than 1 Between 1 Between 2 year and 2 years and 3 years Over 3 years Total Non-derivative financial liabilities: Short-term borrowings $ 4,876,624 $ - $ - $ - $ 4,876,624 Notes and trades payable 65,334,234 - - - 65,334,234 Other payables 40,532,513 - - - 40,532,513 - accrued expenses Long-term borrowings 301,354 1,120,715 2,786 76,793 1,501,648 (including current portion) Other financial liabilities 660,812 - - - 660,812 Derivative financial liabilities: Forward exchange 610,358 - - - 610,358 contracts Currency option contracts 40,216 - - - 40,216 2012/12/31 Less than 1 Between 1 Between 2 year and 2 years and 3 years Over 3 years Total Non-derivative financial liabilities: Short-term borrowings $ 3,739,942 $ - $ - $ - $ 3,739,942 Notes and trades payable 63,299,833 76,205 1,245 21,451 63,398,734 Other payables 30,451,853 83,765 30 11,013 30,546,661 - accrued expenses Long-term borrowings 801,283 1,027,720 242 31 1,829,276 (including current portion) Other financial liabilities 593,728 60 3 - 593,791 Derivative financial liabilities: Forward exchange 988,901 - - - 988,901 contracts Currency option contracts 31,567 - - - 31,567

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2012/1/1 Less than 1 Between 1 Between 2 year and 2 years and 3 years Over 3 years Total Non-derivative financial liabilities: Short-term borrowings $ 2,820,856 $ - $ - $ - $ 2,820,856 Notes and trades payable 53,132,526 13 53 29,497 53,162,089 Other payables 22,115,833 481 31 35,873 22,152,218 - accrued expenses Long-term borrowings 983,938 833,635 608 255 1,818,436 (including current portion) Other financial liabilities 509,729 - - 22,059 531,788 Derivative financial liabilities: Forward exchange 35,595 - - - 35,595 contracts Currency swap contracts 1,457 - - - 1,457 d. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis to be significantly earlier, nor expect the actual cash flow amount to be significantly different. (3) Fair value estimation A. The table below analyses financial instruments measured at fair value, by valuation method. The different levels have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Level 3: Inputs for the asset or liability that are not based on observable market data.

The following table presents the Group’s financial assets and liabilities that are measured at fair value.

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2013/12/31 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Open-end funds $ 8,873,970 $ - $ - $ 8,873,970 Capital guaranteed instruments 1,131,100 - - 1,131,100 Listed and OTC stocks 127,988 - - 127,988 Convertible bonds 76,068 - - 76,068 Forward exchange contracts - 134,071 - 134,071 Currency option contracts - 3,326 - 3,326 Currency swap contracts - 185 - 185 Derivative financial assets - 43,387 - 43,387 for hedging Available-for-sale financial assets 34,948,064 181,735 47,846 35,177,645 $ 45,157,190 $ 362,704 $ 47,846 $ 45,567,740 Financial liabilities: Financial liabilities at fair value through profit or loss Forward exchange contracts $ - $ 331,974 $ - $ 331,974 Currency option contracts - 40,216 - 40,216 Derivative financial liabilities - 278,384 - 278,384 for hedging $ - $ 650,574 $ - $ 650,574 2012/12/31 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Open-end funds $ 9,197,592 $ - $ - $ 9,197,592 Listed and OTC stocks 4,976 - - 4,976 Forward exchange contracts - 66,497 - 66,497 Currency swap contracts - 2,176 - 2,176 Derivative financial assets - 116,334 - 116,334 for hedging Available-for-sale financial assets 10,634,361 147,230 182,565 10,964,156 $ 19,836,929 $ 332,237 $ 182,565 $ 20,351,731 Financial liabilities: Financial liabilities at fair value through profit or loss Forward exchange contracts $ - $ 580,526 $ - $ 580,526 Currency option contracts - 31,567 - 31,567 Derivative financial liabilities - 408,375 - 408,375 for hedging $ - $ 1,020,468 $ - $ 1,020,468

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2012/1/1 Level 1 Level 2 Level 3 Total Financial assets: Financial assets at fair value through profit or loss Open-end funds $ 10,787,934 $ - $ - $ 10,787,934 Listed and OTC stocks 3,404 - - 3,404 Convertible bonds 92,850 - - 92,850 Forward exchange contracts - 686,335 - 686,335 Currency option contracts - 38,788 - 38,788 Currency swap contracts - 884 - 884 Derivative financial assets - 1,354,470 - 1,354,470 for hedging Available-for-sale financial assets 7,421,606 299,275 174,537 7,895,418 $ 18,305,794 $ 2,379,752 $ 174,537 $ 20,860,083 Financial liabilities: Financial liabilities at fair value through profit or loss Forward exchange contracts $ - $ 35,595 $ - $ 35,595 Currency swap contracts - 1,457 - 1,457 $ - $ 37,052 $ - $ 37,052

B. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the closing price. These instruments are included in level 1. Instruments included in level 1 comprise primarily equity instruments and debt instruments classified as financial assets/financial liabilities at fair value through profit or loss or available-for-sale financial assets. C. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. D. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. E. Specific valuation techniques used to value financial instruments include: (A) Quoted market prices or dealer quotes for similar instruments. (B) The fair value of forward exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value discounted back to present value.

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(C) Other techniques, such as Price-Earnings ratio or Price-Book ratio from the recent same industry data, are used to determine fair value for the remaining financial instruments. F. All of the derivative financial instruments whose fair value estimates are included in level 2. G. The following table presents the changes in level 3 instruments.

For the years ended December 31, 2013 2012 At January 1 $ 182,565 $ 174,537 Gains and losses recognized in ( 68,264) - profit or loss Gains and losses recognized in other 2,570 ( 5,115) comprehensive income Additions 6,449 2,730 Disposals ( 7,479) - Transfers out from level 3 ( 65,585) - Net exchange differences ( 2,410) - Others - 10,413 At December 31 $ 47,846 $ 182,565

13. OPERATING SEGMENT INFORMATION (1) General information Management has determined the reportable operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions. There is no material change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information in this period. (2) Measurement basis The Group uses the operating profit as the measurement for operating segment profit and the basis of performance assessment. The accounting policies of the operating segments and the accounting policies described in Note 4 of the consolidated financial statements are the same. (3) Segment information The segment information provided to the chief operating decision-maker for the reportable segments is as follows: 2013 3C Brand Others Total Revenues from external customers $ 421,397,565 $ 41,888,942 $ 463,286,507 Revenues from other segments ($ 18,000) $ 8,948,806 - (Note 1) Segment income $ 19,676,083 $ 280,722 $ 19,956,805 Total assets (Note 2) $ - $ - $ -

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2012 3C Brand Others Total Revenues from external customers $ 413,129,676 $ 35,554,945 $ 448,684,621 Revenues from other segments $ 15,563 $ 7,776,545 - (Note 1) Segment income $ 22,010,771 ($ 84,740) $ 21,926,031 Total assets (Note 2) $ - $ - $ - Note 1: The intra-segment revenues have been eliminated to $0. Note 2: Because the Group’s segment assets are not provided to the chief operating decision-maker, such items are not required to be disclosed. (4) Reconciliation for segment income A. The intra-segment transactions are based on fair value. The revenues from external customers reported to the chief operating decision-maker are measured in a manner consistent with the consolidated statements of comprehensive income. B. The reconciliation between the reportable segment’s profit and segment profit (others are the same as consolidated statements of comprehensive income) is as follows: For the years ended December 31, 2013 2012 Reportable operating segments’ profit $ 19,956,805 $ 21,926,031 before adjustment Unallocated profit (loss) ( 120,795) ( 94,171) Reportable operating segments’ profit $ 19,836,010 $ 21,831,860

(5) Geographical information Geographical information for the years ended December 31, 2013 and 2012 is as follows: For the years ended December 31, 2013 2012 Non-current Non-current Revenue assets Revenue assets Taiwan $ 60,735,758 $ 9,173,917 $ 52,349,355 $ 8,949,238 China 80,232,023 4,761,794 79,915,770 4,264,259 Singapore 216,126,709 1,487 217,434,690 184,224 USA 89,119,420 369,709 87,028,670 328,003 Europe 2,548,512 77,749 2,455,270 67,683 Others 14,524,085 344,938 9,500,866 220,646 $ 463,286,507 $ 14,729,594 $ 448,684,621 $ 14,014,053

The above non-current assets exclude financing instruments, deferred income tax assets and certain other non-current assets. (6) Major customer information No single customer accounts for more than 10% of the consolidated operating revenue for the years ended December 31, 2013 and 2012.

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14. INITIAL APPLICATION OF IFRSs These consolidated financial statements are the first consolidated financial statements prepared by the Group in accordance with the IFRSs. The Group has adjusted the amounts as appropriate that are reported in the previous R.O.C. GAAP consolidated financial statements to those amounts that should be presented under IFRSs in the preparation of the opening IFRS balance sheet. Information about exemptions elected by the Group, exceptions to the retrospective application of IFRSs in relation to initial application of IFRSs, and how it affects the Group’s financial position, operating results and cash flows in transition from R.O.C. GAAP to the IFRSs is set out below: (1) Exemptions elected by the Group A. Business combinations The Group has elected not to apply the requirements in IFRS 3, “Business Combinations”, retrospectively to business combinations that occurred prior to the date of transition to IFRSs (the transition date). This exemption also applies to the Group’s previous acquisitions of investments in associates. B. Share-based payment transactions The Group has elected not to apply the requirements in IFRS 2, “Share-based Payment”, retrospectively to various share-based payment transactions that were vested arising from share-based payment transactions prior to the transition date. C. Deemed cost For property, plant and equipment that were revalued under R.O.C. GAAP before the transition date, the Group has elected to use the revalued amount under R.O.C. GAAP at the date of the revaluation as the “deemed cost” of these assets under IFRSs. D. Employee benefits The Group has elected to recognize all cumulative actuarial gains and losses relating to all employee benefit plans in “retained earnings” at the transition date, and to disclose the information of present value of defined benefit obligation, fair value of plan assets, gain or loss on plan assets and experience adjustments under the requirements of paragraph 120A (P), IAS 19, “Employee Benefits”, based on their prospective amounts for financial periods from the transition date. E. Cumulative translation differences The Group has elected to reset the cumulative translation differences arising on the translation of the financial statements of foreign operations under R.O.C. GAAP to zero at the transition date, and to deal with translation differences arising subsequent to the transition date in accordance with IAS 21, “The Effects of Changes in Foreign Exchange Rates”. F. Compound financial instruments The Group has elected not to segregate between liability components and equity components of compound financial instruments whose liability components were no longer outstanding at the transition date.

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G. Borrowing costs The Group has elected to apply the transitional provisions in paragraphs 27 and 28 of IAS 23, “Borrowing Costs”, amended in 2007 and apply IAS 23 from the transition date. (2) Exceptions to the retrospective application of IFRSs specified in IFRS 1 applied to the Group are set out below: A. Accounting estimates Accounting estimates made under IFRSs on January 1, 2012 are consistent with those made under R.O.C. GAAP on that date. B. Derecognition of financial assets and financial liabilities The derecognition requirements in IAS 39, “Financial Instruments: Recognition and Measurement” shall be applied prospectively to transactions occurring on or after January 1, 2004. C. Hedge accounting Hedge accounting can only be applied prospectively to transactions that qualify for hedge accounting in accordance with IAS 39 from the date of transition to IFRSs. Hedging relationship should not be designated retrospectively, and written documentation relating to hedge accounting should not be made retrospectively, either. Therefore, under IFRS 1, only a hedging relationship that satisfied the hedge accounting criteria on January 1, 2012 can be reflected as hedge in the Group’s opening IFRS financial statements. D. Non-controlling interest Requirements of IAS 27 (amended in 2008) that shall be applied prospectively are as follows: (A) Requirements concerning total comprehensive income (loss) attributed to owners of the parent and non-controlling interest, even which results in a loss to non-controlling interest; (B) Requirements that change in interest ownership of the parent in a subsidiary while control is retained is accounted for as an equity transaction with the parent; and (C) Requirements concerning the parent’s loss of control over a subsidiary. (3) Requirement to reconcile from R.O.C. GAAP to IFRSs at the time of initial application IFRS 1 requires that entity should make reconciliation for equity, comprehensive income and cash flows for the comparative periods. The Group’s initial application of IFRSs has no significant effect on cash flows from operating activities, investing activities and financing activities. Reconciliation for equity and comprehensive income for the comparative periods as to transition from R.O.C. GAAP to IFRSs is shown below:

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A. Reconciliation for equity on January 1, 2012:

Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current assets Cash and cash equivalents $ 41,197,108 $ - $ 41,197,108 Financial assets at fair value through profit or loss - 11,610,195 - 11,610,195 current Available-for-sale financial assets - current 333,923 - 333,923 Derivative financial assets for hedging - current 1,354,470 - 1,354,470 Notes and trades receivable 43,662,260 5,513,037 49,175,297 (C) Other receivables 9,096,576 - 9,096,576 Inventories 57,897,547 - 57,897,547 Prepayments 4,266,674 - 4,266,674 Other current assets 2,712,320 ( 2,107,897) 604,051 (A) ( 372) (B) Total current assets 172,131,073 3,404,768 175,535,841 Non-current assets Available-for-sale financial assets - non-current 7,087,683 473,812 7,561,495 (B) Financial assets measured at cost - non-current 653,172 ( 468,600) 184,572 (B) Investments accounted for under equity method 22,745,490 ( 39,131) 22,706,359 (J) Property, plant and equipment 10,068,653 - 10,068,653 Intangible assets 2,064,201 - 2,064,201 Deferred income tax assets 1,582,487 2,107,897 4,061,133 (A) 20,243 (D) 107,773 (E) 71 (F) 240,353 (G) 2,309 (J) Other non-current assets 1,537,191 10,827 1,548,018 (J) Total non-current assets 45,738,877 2,455,554 48,194,431 Total assets $ 217,869,950 $ 5,860,322 $ 223,730,272

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Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current liabilities Short-term borrowings $ 2,820,856 $ - $ 2,820,856 Financial liabilities at fair value through profit or 37,052 - 37,052 loss - current Notes and trades payable 53,162,089 - 53,162,089 Other payables - accrued expenses 34,254,013 ( 12,214,778) 22,152,218 (C) 112,695 (D) 288 (J) Current income tax liabilities 2,683,337 - 2,683,337 Provisions for liabilities - current - 17,727,815 17,727,815 (C) Receipts in advance 2,513,982 - 2,513,982 Current portion of long-term borrowings 983,938 - 983,938 Other current liabilities 1,352,781 - 1,352,781 Total current liabilities 97,808,048 5,626,020 103,434,068 Non-current liabilities Long-term borrowings 834,498 - 834,498 Deferred income tax liabilities 2,845,092 351 3,195,722 (B) 89,704 (F) 240,353 (G) 18,381 (H) 1,841 (J) Other non-current liabilities 207,626 ( 18,381) 203,608 (H) 14,363 (J) Total non-current liabilities 3,887,216 346,612 4,233,828 Total liabilities 101,695,264 5,972,632 107,667,896 Equity attributable to shareholders of the parent Share capital - common shares 7,527,603 - 7,527,603 Capital surplus 4,662,555 ( 372,080) 4,290,502 (I) 27 (J) Retained earnings Legal reserve 21,806,955 - 21,806,955 Special reserve - 625,824 699,350 (F) 73,526 (H) Unappropriated retained earnings 77,293,325 ( 92,452) 77,642,092 (D) 107,773 (E) 372,080 (I) ( 38,634) (J) Other equity 3,657,812 4,489 2,870,244 (B) ( 715,457) (F) ( 73,526) (H) ( 3,074) (J) Non-controlling interest 1,226,436 ( 806) 1,225,630 (J) Total equity 116,174,686 ( 112,310) 116,062,376 Total liabilities and equity $ 217,869,950 $ 5,860,322 $ 223,730,272

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B. Reconciliation for equity on December 31, 2012: Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current assets Cash and cash equivalents $ 49,608,893 $ - $ 49,608,893 Financial assets at fair value through profit or loss - 9,271,241 - 9,271,241 current Available-for-sale financial assets - current 342,167 - 342,167 Derivative financial assets for hedging - current 116,334 - 116,334 Notes and trades receivable 66,187,374 - 66,187,374 Other receivables 758,630 - 758,630 Inventories 80,491,424 - 80,491,424 Prepayments 6,822,368 - 6,822,368 Other current assets 3,091,146 ( 2,417,530) 673,244 (A) ( 372) (B) Total current assets 216,689,577 ( 2,417,902) 214,271,675 Non-current assets Available-for-sale financial assets - non-current 10,292,194 329,795 10,621,989 (B) Financial assets measured at cost - non-current 476,642 ( 331,721) 144,921 (B) Investments accounted for under equity method 23,522,037 ( 68,280) 23,453,757 (J) Property, plant and equipment 10,764,132 - 10,764,132 Intangible assets 2,023,127 - 2,023,127 Deferred income tax assets 1,845,574 2,417,530 5,146,877 (A) 21,742 (D) 189,812 (E) 71 (F) 668,758 (G) 3,390 (J) Other non-current assets 1,603,302 3,597 1,606,899 (J) Total non-current assets 50,527,008 3,234,694 53,761,702 Total assets $ 267,216,585 $ 816,792 $ 268,033,377

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Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Current liabilities Short-term borrowings $ 3,739,942 $ - $ 3,739,942 Financial liabilities at fair value through profit or 612,093 - 612,093 loss - current Derivative financial liabilities for hedging - 408,375 - 408,375 current Notes and trades payable 63,398,734 - 63,398,734 Other payables - accrued expenses 57,829,983 ( 27,408,156) 30,546,661 (C) 125,025 (D) ( 191) (J) Current income tax liabilities 3,745,015 - 3,745,015 Provisions for liabilities - current - 27,408,156 27,408,156 (C) Receipts in advance 1,628,817 - 1,628,817 Current portion of long-term borrowings 801,283 - 801,283 Other current liabilities 2,014,003 - 2,014,003 Total current liabilities 134,178,245 124,834 134,303,079 Non-current liabilities Long-term borrowings 1,027,993 - 1,027,993 Deferred income tax liabilities 3,957,974 65 4,736,723 (B) 89,704 (F) 668,758 (G) 18,381 (H) 1,841 (J) Other non-current liabilities 201,179 ( 18,381) 177,927 (H) ( 4,871) (J) Total non-current liabilities 5,187,146 755,497 5,942,643 Total liabilities 139,365,391 880,331 140,245,722 Equity attributable to shareholders of the parent Share capital - common shares 7,527,603 - 7,527,603 Capital surplus 4,669,822 ( 372,080) 4,305,220 (I) 7,478 (J) Retained earnings Legal reserve 23,464,771 - 23,464,771 Special reserve - 625,824 699,350 (F) 73,526 (H) Unappropriated retained earnings 87,142,815 ( 92,452) 87,540,465 (D) 107,773 (E) 372,080 (I) ( 39,468) (J) 49,717 Note Other equity 3,257,207 ( 2,363) 2,460,065 (B) ( 715,457) (F) ( 73,526) (H) ( 5,796) (J) Non-controlling interest 1,788,976 ( 3,890) 1,790,181 (D) 5,095 (J) Total equity 127,851,194 ( 63,539) 127,787,655 Total liabilities and equity $ 267,216,585 $ 816,792 $ 268,033,377 Note: The adjustment represents the net effect resulting from the reconciliation of consolidated statement of comprehensive income with material differences for the year ended December 31, 2012.

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C. Reconciliation for comprehensive income for the year ended December 31, 2012: Effect of transition from R.O.C. GAAP R.O.C. GAAP to IFRSs IFRSs Remark Operating revenue $ 448,684,621 $ - $ 448,684,621 Operating costs ( 387,566,173) ( 775) ( 387,566,934) (D) 14 (J) Gross profit 61,118,448 ( 761) 61,117,687 Operating expenses Selling expenses ( 24,430,524) 986 ( 24,429,068) (D) 470 (J) General and administrative expenses ( 6,310,520) ( 1,629) ( 6,311,286) (D) 863 (J) Research and development expenses ( 8,538,648) ( 7,104) ( 8,545,473) (D) 279 (J) Operating profit 21,838,756 ( 6,896) 21,831,860 Non-operating income and expenses Other income 944,432 - 944,432 Other gains (losses) 2,929,821 ( 89) 2,929,732 (B) ( 89,268) (J) Finance costs ( 87,587) - ( 87,587) Share of profit of associates and joint 1,472,762 61,282 1,534,044 (J) ventures accounted for under equity method Profit before income tax 27,098,184 ( 34,971) 27,063,213 Income tax expense ( 4,610,723) 1,522 ( 4,526,035) (D) 82,039 (E) 1,127 (J) Profit for the year $ 22,487,461 $ 49,717 $ 22,537,178 Other comprehensive income Financial statements translation differences of ($ 1,128,920) foreign operations Unrealized gain on valuation of 3,276,123 available-for-sale financial assets Cash flow hedges ( 1,646,511) Actuarial gain on defined benefit plan 11,558 Share of other comprehensive income of associates ( 618,524) and joint ventures accounted for under equity method Income tax relating to components of other ( 297,580) comprehensive income Other comprehensive income for the year ($ 403,854) Total comprehensive income for the year $ 22,133,324

Reasons for reconciliation are outlined below: (A) In accordance with current accounting standards in R.O.C., a deferred tax asset or liability should, according to the classification of its related asset or liability, be classified as current or noncurrent. However, a deferred tax asset or liability that is not related to an asset or liability for financial reporting, should be classified as current or noncurrent according to the expected time period to realize or settle a deferred tax asset or liability. However, under IAS 1, “Presentation of Financial Statements”, an entity should not classify a deferred tax asset or liability as current.

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(B) In accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” before amendment on July 7, 2011, unlisted stocks and emerging stocks held by the Group were measured at cost and recognized as “Financial assets measured at cost”. However, in accordance with IAS 39, “Financial Instruments: Recognition and Measurement”, investments in equity instruments without an active market but with reliable fair value measurement (i.e. the variability in the range of reasonable fair value estimates is insignificant for that instruments, or the probability of the estimates within the range can be reasonably assessed and used in estimating fair value) should be measured at fair value. (C) The classification of some accounts is different between current accounting standards in R.O.C. and IFRSs. These reclassifications include partial notes and accounts receivable, accrued expenses needed to be applied to new accounts. (D) The current accounting standards in R.O.C. do not specify the rules on recognition of the cost of accumulated compensated absences. The Group recognized such costs as expenses upon actual payment. However, IAS 19, “Employee Benefits” requires that the costs of accumulated compensated absences should be accrued as expenses at the reporting date. (E) Regarding tax rates that shall apply to the deferred tax assets or liabilities associated with unrealised gains or losses arising from transactions between parent company and subsidiaries by buyer tax rate or seller tax rate, the current accounting standards in R.O.C. do not specify the rules for this issue; while, the Group adopts seller tax rate for computation. However, under IAS 12, ‘Income Taxes’, temporary differences in the consolidated financial statements are determined by comparing the carrying amounts of assets and liabilities in those statements and applicable taxation basis. The Company’s taxation basis is determined by reference to the Group entities’ income tax returns. Accordingly, buyer tax rate shall apply to the deferred tax assets or liabilities in the consolidated financial statements. (F) The Group elected to use the exemption on currency translation differences for all foreign operations. Currency translation differences that existed at the date of transition to IFRSs are deemed to be zero and reclassified to unappropriated retained earnings after considering the tax effects, and reversed the same account to special reserve at the same time in accordance with IFRS 1 exemption and Jin-Guan-Zheng-Shen-Zi Order No. 1010012865 of the Financial Supervisory Commission, dated April 6, 2012. (G) Deferred income tax assets and liabilities cannot be offset as they do not meet the criteria of offsetting assets and liabilities under IAS 12, “Income Taxes”. Thus, the Group reclassified deferred income tax assets and liabilities at the transition date.

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(H) In accordance with current accounting standards in R.O.C., the Group revalued its property, plant and equipment. Under IFRSs, the Group elected to use the current revaluation at the date of the revaluation as the deemed cost at the date of the revaluation and accordingly, reclassified the capital surplus from asset revaluation to unappropriated retained earnings, and reversed the same amount to special reserve at the same time in accordance with IFRS 1 exemption and Jin-Guan-Zheng-Shen-Zi Order No. 1010012865 of the Financial Supervisory Commission, dated April 6, 2012. (I) In accordance with the IFRSs Frequently Asked Questions (FAQ) issued by the Taiwan Stock Exchange dated April 9, 2012, the capital surplus recognized from a change in the holding percentage of investments accounted for under equity method is reclassified to unappropriated retained earnings. (J) Other adjustment items include adoption of IFRSs resulting to adjustment on investments accounted for under equity method, election to recognize all cumulative actuarial gains and losses on defined benefit plan at the date of transition to IFRSs, recognition of lease payments as an expense on a straight-line basis over the lease term, and recognition of long-term employee benefits expense over the service period other than pension expense. D. Major adjustments for the consolidated statement of cash flows for the year ended December 31, 2012: (A) Under R.O.C. GAAP, payment of interest and receipt of interest and dividend are both included in cash flows from operating activities. However, under IFRSs, receipt of dividend is classified as cash flows from investing activities based on its purpose which is for investment rewards. (B) The transition of R.O.C. GAAP to IFRSs has no effect on the Group’s cash flows reported. (C) The reconciliation between R.O.C. GAAP and IFRSs has no net effect on the Group’s cash flows reported.

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ASUSTek Computer Inc.

Chairman

! WorldReginfo - bf717157-2b8b-412c-b063-29ad16c3b468