EX-99.2 3 tsm-ex992_8.htm EX-99.2

English Translation of Financial Statements Originally Issued in Chinese

Taiwan Semiconductor Manufacturing Company Limited

Parent Company Only Financial Statements for the

Years Ended December 31, 2019 and 2018 and

Independent Auditors’ Report

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勤業眾信

勤業眾信聯合會計師事務所

11073 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 11073, Taiwan

Tel :+886 (2) 2725-9988

Fax:+886 (2) 4051-6888

www.deloitte.com.tw

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders

Taiwan Semiconductor Manufacturing Company Limited

Opinion

We have audited the accompanying parent company only financial statements of Taiwan Semiconductor Manufacturing Company Limited (the “Company”), which comprise the parent company only balance sheets as of December 31, 2019 and 2018, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2019 and 2018, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2019 are stated as follows:

Property, plant and equipment (PP&E) – commencement of depreciation related to PP&E classified as equipment under installation and construction in progress (EUI/CIP)

1

Refer to Notes 4, 5 and 12 to the parent company only financial statements.

The Company’s evaluation of when to commence depreciation of EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgements and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner. Changes in these assumptions could have a significant impact on when depreciation is recognized.

Given the subjectivity in determining the date to commence depreciation of EUI/CIP, performing audit procedures to evaluate the reasonableness of the Company’s judgements and assumptions required a high degree of auditor judgement. Consequently, the validity of commencement of depreciation related to PP&E classified as EUI/CIP is identified as a key audit matter.

Our audit procedures related to the evaluation of when to commence depreciation of EUI/CIP included the following, among others:

1. | We read the Company’s policy and understand the criteria used to determine when to commence depreciation.

2. | We tested the effectiveness of the controls over the evaluation of when to commence depreciation of EUI/CIP.

3. | We sampled EUI/CIP at year end and performed the following for each selection:

| a. | Evaluated whether the selection did not meet the criteria specified by the Company for commencement of depreciation.

| b. | Observed the assets and evaluated their status at year end.

4. | We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation during the year.

5. | We sampled and evaluated whether the selection of EUI/CIP met the criteria specified by the Company for commencement of depreciation subsequent to year end.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

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

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

2

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

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

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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The engagement partners on the audit resulting in this independent auditors’ report are Mei Yen Chiang and Yu Feng Huang.

Deloitte & Touche

Taipei, Taiwan

Republic of China

February 11, 2020

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

|  | December 31, 2019 |  | December 31, 2018
ASSETS |  | Amount |  | % |  | Amount |  | %
CURRENT ASSETS |  |  |  |  |  |  |  |
Cash and cash equivalents (Note 6) |  | $ | 141,450,698 |  |  |  | 6 |  |  | $ | 240,202,525 |  |  |  | 12 |
Financial assets at fair value through profit or loss (Note 7) |  |  | 27,481 |  |  |  | - |  |  |  | 54,115 |  |  |  | - |
Financial assets at fair value through other comprehensive income |  |  | - |  |  |  | - |  |  |  | 568,150 |  |  |  | - |
Financial assets at amortized cost |  |  | - |  |  |  | - |  |  |  | 2,294,098 |  |  |  | - |
Hedging financial assets (Note 8) |  |  | 3,504 |  |  |  | - |  |  |  | 23,497 |  |  |  | - |
Notes and accounts receivable, net (Note 9) |  |  | 49,124,933 |  |  |  | 2 |  |  |  | 36,685,389 |  |  |  | 2 |
Receivables from related parties (Note 31) |  |  | 82,194,501 |  |  |  | 4 |  |  |  | 86,452,584 |  |  |  | 4 |
Other receivables from related parties (Note 31) |  |  | 968,123 |  |  |  | - |  |  |  | 1,234,662 |  |  |  | - |
Inventories (Notes 5 and 10) |  |  | 76,263,851 |  |  |  | 4 |  |  |  | 98,088,160 |  |  |  | 5 |
Other financial assets |  |  | 358,245 |  |  |  | - |  |  |  | 178,008 |  |  |  | - |
Other current assets |  |  | 4,726,789 |  |  |  | - |  |  |  | 4,184,918 |  |  |  | - |
Total current assets |  |  | 355,118,125 |  |  |  | 16 |  |  |  | 469,966,106 |  |  |  | 23 |
NONCURRENT ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial assets at fair value through other comprehensive income |  |  | 877,110 |  |  |  | - |  |  |  | 963,610 |  |  |  | - |
Investments accounted for using equity method (Note11) |  |  | 558,503,889 |  |  |  | 24 |  |  |  | 549,560,884 |  |  |  | 26 |
Property, plant and equipment (Notes 5 and 12) |  |  | 1,310,900,634 |  |  |  | 57 |  |  |  | 1,025,286,941 |  |  |  | 49 |
Right-of-use assets (Notes 5 and 13) |  |  | 15,030,020 |  |  |  | 1 |  |  |  | - |  |  |  | - |
Intangible assets (Notes 5 and 14) |  |  | 16,271,444 |  |  |  | 1 |  |  |  | 12,429,930 |  |  |  | 1 |
Deferred income tax assets (Notes 5 and 25) |  |  | 16,728,622 |  |  |  | 1 |  |  |  | 15,586,674 |  |  |  | 1 |
Refundable deposits and others |  |  | 2,046,228 |  |  |  | - |  |  |  | 1,666,863 |  |  |  | - |
Total noncurrent assets |  |  | 1,920,357,947 |  |  |  | 84 |  |  |  | 1,605,494,902 |  |  |  | 77 |
TOTAL |  | $ | 2,275,476,072 |  |  |  | 100 |  |  | $ | 2,075,461,008 |  |  |  | 100 |
LIABILITIES AND EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term loans (Notes 15 and 28) |  | $ | 148,510,290 |  |  |  | 7 |  |  | $ | 91,982,340 |  |  |  | 4 |
Financial liabilities at fair value through profit or loss (Note 7) |  |  | 982,302 |  |  |  | - |  |  |  | 30,232 |  |  |  | - |
Hedging financial liabilities (Note 8) |  |  | 1,798 |  |  |  | - |  |  |  | 1,941 |  |  |  | - |
Accounts payable |  |  | 36,029,135 |  |  |  | 2 |  |  |  | 30,472,292 |  |  |  | 2 |
Payables to related parties (Note 31) |  |  | 5,716,635 |  |  |  | - |  |  |  | 4,546,752 |  |  |  | - |
Salary and bonus payable |  |  | 14,215,161 |  |  |  | 1 |  |  |  | 12,442,707 |  |  |  | 1 |
Accrued profit sharing bonus to employees and compensation to directors (Note 27) |  |  | 23,526,149 |  |  |  | 1 |  |  |  | 23,919,312 |  |  |  | 1 |
Payables to contractors and equipment suppliers |  |  | 139,754,491 |  |  |  | 6 |  |  |  | 41,279,910 |  |  |  | 2 |
Cash dividends payable (Note 19) |  |  | 129,651,902 |  |  |  | 6 |  |  |  | - |  |  |  | - |
Income tax payable (Notes 5 and 25) |  |  | 32,241,052 |  |  |  | 1 |  |  |  | 38,706,990 |  |  |  | 2 |
Long-term liabilities - current portion (Notes 16 and 28) |  |  | 31,800,000 |  |  |  | 1 |  |  |  | 34,900,000 |  |  |  | 2 |
Accrued expenses and other current liabilities (Notes 5, 13, 18, 20, 28 and 31) |  |  | 43,111,632 |  |  |  | 2 |  |  |  | 49,778,042 |  |  |  | 2 |
Total current liabilities |  |  | 605,540,547 |  |  |  | 27 |  |  |  | 328,060,518 |  |  |  | 16 |
NONCURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds payable (Notes 16 and 28) |  |  | 25,100,000 |  |  |  | 1 |  |  |  | 56,900,000 |  |  |  | 3 |
Deferred income tax liabilities (Notes 5 and 25) |  |  | 333,606 |  |  |  | - |  |  |  | 233,284 |  |  |  | - |
Lease liabilities (Notes 5, 13 and 28) |  |  | 13,300,263 |  |  |  | 1 |  |  |  | - |  |  |  | - |
Net defined benefit liability (Note 17) |  |  | 9,182,496 |  |  |  | - |  |  |  | 9,651,405 |  |  |  | 1 |
Guarantee deposits (Notes 18 and 28) |  |  | 170,446 |  |  |  | - |  |  |  | 3,346,648 |  |  |  | - |
Others |  |  | 438,590 |  |  |  | - |  |  |  | 451,488 |  |  |  | - |
Total noncurrent liabilities |  |  | 48,525,401 |  |  |  | 2 |  |  |  | 70,582,825 |  |  |  | 4 |
Total liabilities |  |  | 654,065,948 |  |  |  | 29 |  |  |  | 398,643,343 |  |  |  | 20 |
EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital stock (Note 19) |  |  | 259,303,805 |  |  |  | 11 |  |  |  | 259,303,805 |  |  |  | 12 |
Capital surplus (Note 19) |  |  | 56,339,709 |  |  |  | 2 |  |  |  | 56,315,932 |  |  |  | 3 |
Retained earnings (Note 19) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Appropriated as legal capital reserve |  |  | 311,146,899 |  |  |  | 14 |  |  |  | 276,033,811 |  |  |  | 13 |
Appropriated as special capital reserve |  |  | 10,675,106 |  |  |  | - |  |  |  | 26,907,527 |  |  |  | 1 |
Unappropriated earnings |  |  | 1,011,512,974 |  |  |  | 45 |  |  |  | 1,073,706,503 |  |  |  | 52 |
|  |  | 1,333,334,979 |  |  |  | 59 |  |  |  | 1,376,647,841 |  |  |  | 66 |
Others (Note 19) |  |  | (27,568,369 | ) |  |  | (1 | ) |  |  | (15,449,913 | ) |  |  | (1 | )
Total equity |  |  | 1,621,410,124 |  |  |  | 71 |  |  |  | 1,676,817,665 |  |  |  | 80 |
TOTAL |  | $ | 2,275,476,072 |  |  |  | 100 |  |  | $ | 2,075,461,008 |  |  |  | 100 |

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

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

|  | 2019 |  | 2018
|  | Amount |  | % |  | Amount |  | %
NET REVENUE (Notes 5, 20 and 31) |  | $ | 1,059,646,793 |  |  |  | 100 |  |  | $ | 1,023,925,713 |  |  |  | 100 |
COST OF REVENUE (Notes 5, 10, 27, 31 and 34) |  |  | 579,507,047 |  |  |  | 55 |  |  |  | 530,861,166 |  |  |  | 52 |
GROSS PROFIT BEFORE REALIZED (UNREALIZED) GROSS PROFIT ON SALES TO SUBSIDIARIES AND ASSOCIATES |  |  | 480,139,746 |  |  |  | 45 |  |  |  | 493,064,547 |  |  |  | 48 |
REALIZED (UNREALIZED) GROSS PROFIT ON SALES TO SUBSIDIARIES AND ASSOCIATES |  |  | 3,395 |  |  |  | - |  |  |  | (109,046 | ) |  |  | - |
GROSS PROFIT |  |  | 480,143,141 |  |  |  | 45 |  |  |  | 492,955,501 |  |  |  | 48 |
OPERATING EXPENSES (Notes 5, 27 and 31) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 90,482,815 |  |  |  | 8 |  |  |  | 84,944,461 |  |  |  | 8 |
General and administrative |  |  | 20,353,327 |  |  |  | 2 |  |  |  | 19,113,298 |  |  |  | 2 |
Marketing |  |  | 3,231,777 |  |  |  | - |  |  |  | 3,201,670 |  |  |  | - |
Total operating expenses |  |  | 114,067,919 |  |  |  | 10 |  |  |  | 107,259,429 |  |  |  | 10 |
OTHER OPERATING INCOME AND EXPENSES, NET (Notes 12, 13, 21 and 27) |  |  | (151,230 | ) |  |  | - |  |  |  | (1,668,234 | ) |  |  | - |
INCOME FROM OPERATIONS |  |  | 365,923,992 |  |  |  | 35 |  |  |  | 384,027,838 |  |  |  | 38 |
NON-OPERATING INCOME AND EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share of profits of subsidiaries and associates (Note 11) |  |  | 22,906,788 |  |  |  | 2 |  |  |  | 12,509,959 |  |  |  | 1 |
Other income (Note 22) |  |  | 2,180,251 |  |  |  | - |  |  |  | 2,005,107 |  |  |  | - |
Foreign exchange gain, net (Note 33) |  |  | 1,994,370 |  |  |  | - |  |  |  | 1,927,029 |  |  |  | - |
Finance costs (Note 23) |  |  | (3,191,609 | ) |  |  | - |  |  |  | (2,903,454 | ) |  |  | - |
Other gains and losses (Note 24) |  |  | (1,068,573 | ) |  |  | - |  |  |  | (1,368,326 | ) |  |  | - |
Total non-operating income and expenses |  |  | 22,821,227 |  |  |  | 2 |  |  |  | 12,170,315 |  |  |  | 1 |
INCOME BEFORE INCOME TAX |  |  | 388,745,219 |  |  |  | 37 |  |  |  | 396,198,153 |  |  |  | 39 |
INCOME TAX EXPENSE (Notes 5 and 25) |  |  | 43,481,551 |  |  |  | 4 |  |  |  | 45,067,269 |  |  |  | 5 |
NET INCOME |  |  | 345,263,668 |  |  |  | 33 |  |  |  | 351,130,884 |  |  |  | 34 |

(Continued)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

|  | 2019 |  | 2018
|  | Amount |  | % |  | Amount |  | %
OTHER COMPREHENSIVE INCOME (LOSS) (Notes 5, 17, 19 and 25) |  |  |  |  |  |  |  |
Items that will not be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |
Remeasurement of defined benefit obligation |  | $ | 253,895 |  |  |  | - |  |  | $ | (861,162 | ) |  |  | - |
Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income |  |  | 121,740 |  |  |  | - |  |  |  | (1,189,957 | ) |  |  | - |
Gain (loss) on hedging instruments |  |  | (109,592 | ) |  |  | - |  |  |  | 40,975 |  |  |  | - |
Share of other comprehensive income (loss) of subsidiaries and associates |  |  | 194,524 |  |  |  | - |  |  |  | (2,135,880 | ) |  |  | - |
Income tax benefit (expense) related to items that will not be reclassified subsequently |  |  | (20,992 | ) |  |  | - |  |  |  | 195,729 |  |  |  | - |
|  |  | 439,575 |  |  |  | - |  |  |  | (3,950,295 | ) |  |  | - |
Items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exchange differences arising on translation of foreign operations |  |  | (14,698,117 | ) |  |  | (2 | ) |  |  | 14,578,483 |  |  |  | 1 |
Share of other comprehensive income (loss) of subsidiaries and associates |  |  | 2,435,334 |  |  |  | - |  |  |  | (794,057 | ) |  |  | - |
|  |  | (12,262,783 | ) |  |  | (2 | ) |  |  | 13,784,426 |  |  |  | 1 |
Other comprehensive income (loss) for the year, net of income tax |  |  | (11,823,208 | ) |  |  | (2 | ) |  |  | 9,834,131 |  |  |  | 1 |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |  | $ | 333,440,460 |  |  |  | 31 |  |  | $ | 360,965,015 |  |  |  | 35 |
EARNINGS PER SHARE (NT$, Note 26) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | $ | 13.32 |  |  |  |  |  |  | $ | 13.54 |  |  |  |  |
Diluted earnings per share |  | $ | 13.32 |  |  |  |  |  |  | $ | 13.54 |  |  |  |  |

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

(Concluded)

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Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Others |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Unrealized Gain |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (Loss) on Assets |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Foreign |  | at Fair Value |  |  |  | Unearned |  |  |  |  |  |
|  | Capital Stock - Common Stock |  |  |  | Retained Earnings |  | Currency |  | Through Other |  | Gain (Loss) on |  | Stock-Based |  |  |  |  |  |
|  | Shares |  |  |  |  |  | Legal Capital |  | Special Capital |  | Unappropriated |  |  |  | Translation |  | Comprehensive |  | Hedging |  | Employee |  |  |  | Total |  |
|  | (In Thousands) |  | Amount |  | Capital Surplus |  | Reserve |  | Reserve |  | Earning |  | Total |  | Reserve |  | Income |  | Instruments |  | Compensation |  | Total |  | Equity |  |
BALANCE, JANUARY 1, 2018 |  |  | 25,930,380 |  |  | $ | 259,303,805 |  |  | $ | 56,309,536 |  |  | $ | 241,722,663 |  |  | $ | - |  |  | $ | 993,195,668 |  |  | $ | 1,234,918,331 |  |  | $ | (26,697,680 | ) |  | $ | (524,915 | ) |  | $ | 4,226 |  |  | $ | (10,290 | ) |  | $ | (27,228,659 | ) |  | $ | 1,523,303,013 |  |  |
Appropriations of prior year’s earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Legal capital reserve |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 34,311,148 |  |  |  | - |  |  |  | (34,311,148 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Special capital reserve |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 26,907,527 |  |  |  | (26,907,527 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Cash dividends to shareholders |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (207,443,044 | ) |  |  | (207,443,044 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (207,443,044 | )
Total |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 34,311,148 |  |  |  | 26,907,527 |  |  |  | (268,661,719 | ) |  |  | (207,443,044 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (207,443,044 | )
Net income in 2018 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 351,130,884 |  |  |  | 351,130,884 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 351,130,884 |
Other comprehensive income (loss) in 2018, net of income tax |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (765,274 | ) |  |  | (765,274 | ) |  |  | 14,655,333 |  |  |  | (4,097,465 | ) |  |  | 41,537 |  |  |  | - |  |  |  | 10,599,405 |  |  |  | 9,834,131 |
Total comprehensive income (loss) in 2018 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 350,365,610 |  |  |  | 350,365,610 |  |  |  | 14,655,333 |  |  |  | (4,097,465 | ) |  |  | 41,537 |  |  |  | - |  |  |  | 10,599,405 |  |  |  | 360,965,015 |
Disposal of investments in equity instruments at fair value through other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1,193,056 | ) |  |  | (1,193,056 | ) |  |  | - |  |  |  | 1,193,056 |  |  |  | - |  |  |  | - |  |  |  | 1,193,056 |  |  |  | - |
Basis adjustment for gain (loss) on hedging instruments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (22,162 | ) |  |  | - |  |  |  | (22,162 | ) |  |  | (22,162 | )
Adjustments to share of changes in equities of associates |  |  | - |  |  |  | - |  |  |  | (6,420 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8,447 |  |  |  | 8,447 |  |  |  | 2,027 |
From share of changes in equities of subsidiaries |  |  | - |  |  |  | - |  |  |  | 2,681 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,681 |
Donation from shareholders |  |  | - |  |  |  | - |  |  |  | 10,135 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,135 |
BALANCE, DECEMBER 31, 2018 |  |  | 25,930,380 |  |  |  | 259,303,805 |  |  |  | 56,315,932 |  |  |  | 276,033,811 |  |  |  | 26,907,527 |  |  |  | 1,073,706,503 |  |  |  | 1,376,647,841 |  |  |  | (12,042,347 | ) |  |  | (3,429,324 | ) |  |  | 23,601 |  |  |  | (1,843 | ) |  |  | (15,449,913 | ) |  |  | 1,676,817,665 |
Appropriations of prior year’s earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Legal capital reserve |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35,113,088 |  |  |  | - |  |  |  | (35,113,088 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Special capital reserve |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (16,232,421 | ) |  |  | 16,232,421 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Cash dividends to shareholders |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (388,955,707 | ) |  |  | (388,955,707 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (388,955,707 | )
Total |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35,113,088 |  |  |  | (16,232,421 | ) |  |  | (407,836,374 | ) |  |  | (388,955,707 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (388,955,707 | )
Net income in 2019 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 345,263,668 |  |  |  | 345,263,668 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 345,263,668 |
Other comprehensive income (loss) in 2019, net of income tax |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 217,059 |  |  |  | 217,059 |  |  |  | (14,829,053 | ) |  |  | 2,898,483 |  |  |  | (109,697 | ) |  |  | - |  |  |  | (12,040,267 | ) |  |  | (11,823,208 | )
Total comprehensive income (loss) in 2019 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 345,480,727 |  |  |  | 345,480,727 |  |  |  | (14,829,053 | ) |  |  | 2,898,483 |  |  |  | (109,697 | ) |  |  | - |  |  |  | (12,040,267 | ) |  |  | 333,440,460 |
Disposal of investments in equity instruments at fair value through other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 162,118 |  |  |  | 162,118 |  |  |  | - |  |  |  | (162,118 | ) |  |  | - |  |  |  | - |  |  |  | (162,118 | ) |  |  | - |
Basis adjustment for gain (loss) on hedging instruments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 82,276 |  |  |  | - |  |  |  | 82,276 |  |  |  | 82,276 |
Adjustments to share of changes in equities of associates |  |  | - |  |  |  | - |  |  |  | 19,414 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,653 |  |  |  | 1,653 |  |  |  | 21,067 |
From share of changes in equities of subsidiaries |  |  | - |  |  |  | - |  |  |  | 370 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 370 |
Donation from shareholders |  |  | - |  |  |  | - |  |  |  | 3,993 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,993 |
BALANCE, DECEMBER 31, 2019 |  |  | 25,930,380 |  |  | $ | 259,303,805 |  |  | $ | 56,339,709 |  |  | $ | 311,146,899 |  |  | $ | 10,675,106 |  |  | $ | 1,011,512,974 |  |  | $ | 1,333,334,979 |  |  | $ | (26,871,400 | ) |  | $ | (692,959 | ) |  | $ | (3,820 | ) |  | $ | (190 | ) |  | $ | (27,568,369 | ) |  | $ | 1,621,410,124 |  |

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

- 8 -

Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

|  | 2019 |  | 2018
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |
Income before income tax |  | $ | 388,745,219 |  |  | $ | 396,198,153 |
Adjustments for: |  |  |  |  |  |  |  |
Depreciation expense |  |  | 267,464,543 |  |  |  | 274,340,540 |
Amortization expense |  |  | 5,338,886 |  |  |  | 4,352,847 |
Finance costs |  |  | 3,191,609 |  |  |  | 2,903,454 |
Share of profits of subsidiaries and associates |  |  | (22,906,788 | ) |  |  | (12,509,959 | )
Interest income |  |  | (2,002,877 | ) |  |  | (1,847,202 | )
Loss on disposal or retirement of property, plant and equipment, net |  |  | 582,289 |  |  |  | 557,598 |
Gain on disposal of intangible assets, net |  |  | (6,183 | ) |  |  | (5,933 | )
Impairment loss (reversal of impairment loss) on property, plant and equipment |  |  | (301,384 | ) |  |  | 423,468 |
Loss (gain) on financial instruments at fair value through profit or loss, net |  |  | 18,291 |  |  |  | (17,729 | )
Gain on disposal of investments accounted for using equity method, net |  |  | (15,200 | ) |  |  | - |
Unrealized (realized) gross profit on sales to subsidiaries and associates |  |  | (3,395 | ) |  |  | 109,046 |
Gain (loss) on foreign exchange, net |  |  | (6,289,978 | ) |  |  | 2,732,445 |
Dividend income |  |  | (177,374 | ) |  |  | (157,905 | )
Gain on lease modification |  |  | (2,555 | ) |  |  | - |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Financial instruments at fair value through profit or loss |  |  | 964,207 |  |  |  | 301,714 |
Notes and accounts receivable, net |  |  | (20,264,116 | ) |  |  | (15,821,089 | )
Receivables from related parties |  |  | 4,258,083 |  |  |  | 5,689,253 |
Other receivables from related parties |  |  | 442,439 |  |  |  | 216,794 |
Inventories |  |  | 21,824,309 |  |  |  | (27,790,715 | )
Other financial assets |  |  | (211,869 | ) |  |  | (26,762 | )
Other current assets |  |  | (515,166 | ) |  |  | (1,685,193 | )
Accounts payable |  |  | 5,626,778 |  |  |  | 4,839,526 |
Payables to related parties |  |  | 1,169,883 |  |  |  | (282,912 | )
Salary and bonus payable |  |  | 1,772,454 |  |  |  | 159,386 |
Accrued profit sharing bonus to employees and compensation to directors |  |  | (393,163 | ) |  |  | 531,310 |
Accrued expenses and other current liabilities |  |  | (3,618,263 | ) |  |  | (21,092,059 | )
Net defined benefit liability |  |  | (215,014 | ) |  |  | (60,461 | )
Cash generated from operations |  |  | 644,475,665 |  |  |  | 612,057,615 |
Income taxes paid |  |  | (51,043,594 | ) |  |  | (43,956,272 | )
Net cash generated by operating activities |  |  | 593,432,071 |  |  |  | 568,101,343 |

(Continued)

- 9 -

Taiwan Semiconductor Manufacturing Company Limited

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

|  | 2019 |  | 2018
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |
Acquisitions of: |  |  |  |
Financial assets at amortized cost |  | $ | - |  |  | $ | (2,294,098 | )
Property, plant and equipment |  |  | (450,287,869 | ) |  |  | (298,099,157 | )
Intangible assets |  |  | (9,252,712 | ) |  |  | (6,885,163 | )
Proceeds from disposal or redemption of: |  |  |  |  |  |  |  |
Financial assets at fair value through other comprehensive income |  |  | 775,282 |  |  |  | 651,971 |
Property, plant and equipment |  |  | 1,118,338 |  |  |  | 4,707,118 |
Intangible assets |  |  | - |  |  |  | 15,881 |
Proceeds from return of capital of financial assets carried at cost |  |  | 2,300,000 |  |  |  | - |
Proceeds from return of capital of investments in equity instruments at fair value through other comprehensive income |  |  | 1,107 |  |  |  | 3,456 |
Derecognition of hedging financial instruments |  |  | (93,536 | ) |  |  | 57,954 |
Interest received |  |  | 2,016,735 |  |  |  | 1,815,330 |
Other dividends received |  |  | 177,374 |  |  |  | 157,905 |
Dividends received from investments accounted for using equity method |  |  | 2,225,194 |  |  |  | 3,769,150 |
Refundable deposits paid |  |  | (1,447,188 | ) |  |  | (2,218,292 | )
Refundable deposits refunded |  |  | 1,007,262 |  |  |  | 1,762,043 |
Net cash used in investing activities |  |  | (451,460,013 | ) |  |  | (296,555,902 | )
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |  |  |
Increase in short-term loans |  |  | 59,615,602 |  |  |  | 27,154,770 |
Repayment of bonds |  |  | (34,900,000 | ) |  |  | (24,300,000 | )
Repayment of the principal portion of lease liabilities |  |  | (2,630,308 | ) |  |  | - |
Interest paid |  |  | (3,536,180 | ) |  |  | (2,957,663 | )
Guarantee deposits received |  |  | 23,063 |  |  |  | 1,625,526 |
Guarantee deposits refunded |  |  | (4,061 | ) |  |  | (120,717 | )
Cash dividends |  |  | (259,303,805 | ) |  |  | (207,443,044 | )
Payment of partial acquisition of interests in subsidiaries |  |  | (10,602 | ) |  |  | (64,633,400 | )
Proceeds from partial disposal of interests in subsidiaries |  |  | 18,500 |  |  |  | 144,676 |
Donation from shareholders |  |  | 3,906 |  |  |  | 10,095 |
Net cash used in financing activities |  |  | (240,723,885 | ) |  |  | (270,519,757 | )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |  |  | (98,751,827 | ) |  |  | 1,025,684 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |  |  | 240,202,525 |  |  |  | 239,176,841 |
CASH AND CASH EQUIVALENTS, END OF YEAR |  | $ | 141,450,698 |  |  | $ | 240,202,525 |

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

(Concluded)

- 10 -

Taiwan Semiconductor Manufacturing Company Limited

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. | GENERAL

Taiwan Semiconductor Manufacturing Company Limited (the “Company” or “TSMC”), a Republic of China (R.O.C.) corporation, was incorporated on February 21, 1987. The Company is a dedicated foundry in the semiconductor industry which engages mainly in the manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing of masks.

On September 5, 1994, the Company’s shares were listed on the Taiwan Stock Exchange (TWSE). On October 8, 1997, the Company listed some of its shares of stock on the New York Stock Exchange (NYSE) in the form of American Depositary Shares (ADSs).

The address of its registered office and principal place of business is No. 8, Li-Hsin Rd. 6, Hsinchu Science Park, Taiwan.

2. | THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying parent company only financial statements were approved and authorized for issue by the Board of Directors on February 11, 2020.

3. | APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

| a. | Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have a significant effect on the Company’s accounting policies:

| 1) | IFRS 16 “Leases”

IFRS 16 sets out the accounting standards for leases that supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations.

Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Company applies the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

- 11 -

The Company as lessee

Except for payments for short-term leases which are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases on the parent company only balance sheets. On the parent company only statements of comprehensive income, the Company presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities, which is computed using the effective interest method. On the parent company only statements of cash flows, cash payments for both the principal portion and the interest portion of lease liabilities are classified within financing activities.

The Company applies IFRS 16 retrospectively with the cumulative effect of the initial application recognized at the date of initial application but does not restate comparative information.

Leases agreements classified as operating leases under IAS 17, except for short-term leases, are measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments. Right-of-use assets are subject to impairment testing under IAS 36.

The Company applied the following practical expedients to measure right-of-use assets and lease liabilities on January 1, 2019:

| a) | The Company applied a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.

| b) | The Company accounted for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.

| c) | Except for lease payments, the Company excluded incremental costs of obtaining the lease from right-of-use assets on January 1, 2019.

| d) | The Company determined lease terms (e.g. lease periods) based on the projected status on January 1, 2019, to measure lease liabilities.

The weighted average lessee’s incremental borrowing rate used by the Company to calculate lease liabilities recognized on January 1, 2019 is 1.25%. The reconciliation between the lease liabilities recognized and the future minimum lease payments of non-cancellable operating lease on December 31, 2018 is presented as follows:

The future minimum lease payments of non-cancellable operating lease on December 31, 2018 |  | $ | 18,721,881 |
Less: Recognition exemption for short-term leases |  |  | (3,163,562 | )
Undiscounted gross amounts on January 1, 2019 |  | $ | 15,558,319 |
Discounted using the incremental borrowing rate on January 1, 2019 |  | $ | 14,652,188 |
Add: Adjustments as a result of a different treatment of extension and purchase options |  |  | 3,106,390 |
Lease liabilities recognized on January 1, 2019 |  | $ | 17,758,578 |

- 12 -

The Company as lessor

Except for sublease transactions, the Company does not make any adjustments for leases in which it is a lessor, and accounts for those leases under IFRS 16 starting from January 1, 2019. On the basis of the remaining contractual terms and conditions on January 1, 2019, all of the Company’s subleases are classified as operating leases.

Impact on assets, liabilities and equity on January 1, 2019

|  | Carrying Amount as of December 31, 2018 |  | Adjustments Arising from Initial Application |  | Adjusted Carrying Amount as of January 1, 2019
Other current assets |  | $ | 4,184,918 |  |  | $ | (6,783 | ) |  | $ | 4,178,135 |
Right-of-use assets |  |  | - |  |  |  | 17,831,257 |  |  |  | 17,831,257 |
Refundable deposits and others |  |  | 1,666,863 |  |  |  | (966 | ) |  |  | 1,665,897 |
Total effect on assets |  |  |  |  |  | $ | 17,823,508 |  |  |  |  |
Accrued expenses and other current liabilities |  |  | 49,778,042 |  |  | $ | 2,347,167 |  |  |  | 52,125,209 |
Lease liabilities - noncurrent |  |  | - |  |  |  | 15,411,411 |  |  |  | 15,411,411 |
Other noncurrent liabilities |  |  | 451,488 |  |  |  | 64,930 |  |  |  | 516,418 |
Total effect on liabilities |  |  |  |  |  | $ | 17,823,508 |  |  |  |  |
Total effect on equity |  |  |  |  |  | $ | - |  |  |  |  |

| b. | Amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers for application starting from 2020 and the IFRSs issued by International Accounting Standards Board (IASB) and endorsed by the FSC with effective date starting 2020

New, Revised or Amended Standards and Interpretations |  | Effective Date Issued by IASB
Amendments to IFRS 3 “Definition of a Business” |  | January 1, 2020 (Note 1)
Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform” |  | January 1, 2020 (Note 2)
Amendments to IAS 1 and IAS 8 “Definition of Material” |  | January 1, 2020 (Note 3)

| Note 1: | The Company shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.

| Note 2: | The Company shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.

| Note 3: | The Company shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

- 13 -

| c. | The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC

New, Revised or Amended Standards and Interpretations |  | Effective Date Issued by IASB
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” |  | To be determined by IASB
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” |  | January 1, 2022

As of the date the accompanying parent company only financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Company completes the evaluation.

4. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For the convenience of readers, the accompanying parent company only financial statements have been translated into English from the original Chinese version prepared and used in the R.O.C. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language parent company only financial statements shall prevail.

Statement of Compliance

The accompanying parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the “Accounting Standards Used in Preparation of the Parent Company Only Financial Statements”).

Basis of Preparation

The accompanying parent company only financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for the assets.

When preparing the parent company only financial statements, the Company account for subsidiaries and associates by using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent in the consolidated financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries and associates and share of other comprehensive income of subsidiaries and associates in the parent company only financial statements.

Foreign Currencies

In preparing the parent company only financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

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For the purposes of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations are translated into NT$ using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

Classification of Current and Noncurrent Assets and Liabilities

Current assets are assets held for trading purposes and assets expected to be converted to cash, sold or consumed within one year from the end of the reporting period. Current liabilities are obligations incurred for trading purposes and obligations expected to be settled within one year from the end of the reporting period. Assets and liabilities that are not classified as current are noncurrent assets and liabilities, respectively.

Cash Equivalents

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Financial Instruments

Financial assets and liabilities shall be recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and liabilities are initially recognized at fair values. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial Assets

The classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Regular way purchases or sales of financial assets are recognized and derecognized on a trade date or settlement date basis for which financial assets were classified in the same way, respectively. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

| a. | Category of financial assets and measurement

Financial assets are classified into the following categories: financial assets at FVTPL, investments in debt instruments and equity instruments at FVTOCI, and financial assets at amortized cost.

| 1) | Financial asset at FVTPL

For certain financial assets which include debt instruments that do not meet the criteria of amortized cost or FVTOCI, it is mandatorily required to measure them at FVTPL. Any gain or loss arising from remeasurement is recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest earned on the financial asset.

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| 2) | Investments in debt instruments at FV T OCI

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of collecting contractual cash flows and selling the financial assets, are measured at FVTOCI.

Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment gains or losses on investments in debt instruments at FVTOCI are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when these debt instruments are disposed.

| 3) | Investments in equity instruments at FVTOCI

On initial recognition, the Company may irrevocably designate investments in equity investments that is not held for trading as at FVTOCI.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the Company’s rights clearly represent a recovery of part of the cost of the investment.

| 4) | Measured at amortized cost

Cash and cash equivalents, debt instrument investments, notes and accounts receivable (including related parties), other receivables and refundable deposits are measured at amortized cost.

Debt instruments with contractual terms specifying that cash flows are solely payments of principal and interest on the principal amount outstanding, together with objective of holding financial assets in order to collect contractual cash flows, are measured at amortized cost.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss.

| b. | Impairment of financial assets

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) and for investments in debt instruments that are measured at FVTOCI.

The loss allowance for accounts receivable is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost and investments in debt instruments that are measured at FVTOCI, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized

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in other comprehensive income and does not reduce the carrying amount of the financial asset.

| c. | Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the financial asset to another entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Financial Liabilities and Equity Instruments

Classification as debt or equity

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities are subsequently measured either at amortized cost using effective interest method or at FVTPL.

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or is designated as at fair value through profit or loss.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.

Financial liabilities other than those held for trading purposes and designated as at FVTPL are subsequently measured at amortized cost at the end of each reporting period.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Derivative Financial Instruments

Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative financial instrument is

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designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

Hedge Accounting

Cash flow hedge

The Company designates certain hedging instruments, such as forward exchange contracts and foreign currency deposits, to partially hedge its foreign exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The effective portion of changes in the fair value of hedging instruments is recognized in other comprehensive income. When the forecast transactions actually take place, the associated gains or losses that were recognized in other comprehensive income are removed from equity and included in the initial cost of the hedged items. The gains or losses from hedging instruments relating to the ineffective portion are recognized immediately in profit or loss.

The Company prospectively discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance when the hedging instrument expires or is sold, terminated or exercised.

Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale.

Investments Accounted for Using Equity Method

Investments accounted for using the equity method include investments in subsidiaries and associates.

Investment in subsidiaries

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company loses control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amounts previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

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Investment in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The operating results and assets and liabilities of associates are incorporated in these parent company only financial statements using the equity method of accounting. Under the equity method, an investment in an associate is initially recognized in the statement of financial position at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associate as well as the distribution received. The Company also recognizes its share in the changes in the equities of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date when the Company ceases to have significant influence over an associate. When the Company retains an interest in the former associate, the Company measures the retained interest at fair value at that date. The difference between the carrying amount of the associate at the date the equity method was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part interest in the associate is included in the determination of the gain or loss on disposal of the associate. In addition, the Company shall account for all amounts recognized in other comprehensive income in relation to that associate on the same basis as would be required if the associate had directly disposed of the related assets or liabilities. If the Company’s ownership interest in an associate is reduced as a result of disposal, but the investment continues to be an associate, the Company should reclassify to profit or loss only a proportionate amount of the gain or loss previously recognized in other comprehensive income.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the Company’s ownership interest is reduced due to the additional subscription to the shares of associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate shall be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

When the Company transacts with an associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s parent company only financial statements only to the extent of interests in the associate that are not owned by the Company.

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Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment. Costs include any incremental costs that are directly attributable to the construction or acquisition of the item of property, plant and equipment.

Property, plant and equipment in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other identical categories of property, plant and equipment, commences when the assets are available for their intended use.

Depreciation is recognized so as to write off the cost of the assets less their residual values over their useful lives, and it is computed using the straight-line method mainly over the following estimated useful lives: buildings (assets used by the Company and assets subject to operating leases) - 10 to 20 years; machinery and equipment - 5 years; and office equipment - 5 years. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis. Land is not depreciated.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

Leases

2019

For a contract that contains a lease component and non-lease component, the Company may elect to account for the lease and non-lease components as a single lease component.

The Company as lessor

Rental income from operating lease is recognized on a straight-line basis over the term of the lease.

The Company as lessee

Except for short-term leases (leases of machinery and equipment and others) which are recognized as expenses on a straight-line basis, the Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are measured at cost. The cost of right-of-use assets comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus an estimate of costs needed to restore the underlying assets. Subsequent measurement is calculated as cost less accumulated depreciation and accumulated impairment loss and adjusted for changes in lease liabilities as a result of lease term modifications or other related factors. Right-of-use assets are presented separately in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. If the lease transfers ownership of the underlying assets to the Company by the end of the lease terms or if the cost of right-of-use assets reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use assets from the commencement dates to the end of the useful lives of the underlying assets.

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Lease liabilities are measured at the present value of the lease payments. L ease payments comprise fixed payments, variable lease payments which depend on an index or a rate and the exercise price of a purchase option if the Company is reasonably certain to exercise that option. The lease payments are discounted using the lessee’s incremental borrowing rate s.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in future lease payments resulting from a change in an index or a rate used to determine those payments, or a change in the assessment of an option to purchase an underlying asset, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. Lease liabilities are presented on a separate line in the parent company only balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

2018

Leases are classified as finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Company as lessor

Rental income from operating leases is recognized on a straight-line basis over the term of the lease.

The Company as lessee

Operating lease payments are recognized as an expense on a straight-line basis over the lease term.

Intangible Assets

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

Other intangible assets

Other separately acquired intangible assets with finite useful lives are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized using the straight-line method over the following estimated useful lives: Technology license fees - the estimated life of the technology or the term of the technology transfer contract; software and system design costs - 3 years or contract period; patent and others - the economic life or contract period. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets

Goodwill

Goodwill is not amortized and instead is tested for impairment annually, or more frequently when there is an indication that the cash generating unit may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash generating units or groups of cash-generating units that are expected to benefit. If the recoverable amount of a cash generating unit is less than its carrying amount, the difference is allocated first to reduce the carrying amount of any goodwill allocated to such cash-generating unit and then to the other assets of the cash generating unit pro rata based on the carrying amount of each asset in the

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cash generating unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

Tangible assets, right-of-use assets and other intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets (property, plant and equipment), right-of-use assets and other intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

Guarantee Deposit

Guarantee deposit mainly consists of cash received under deposit agreements with customers to ensure they have access to the Company’s specified capacity. Cash received from customers is recorded as guarantee deposit upon receipt. Guarantee deposits are refunded to customers when terms and conditions set forth in the deposit agreements have been satisfied.

Revenue Recognition

The Company recognizes revenue when performance obligations are satisfied. The performance obligations are satisfied when customers obtain control of the promised goods which is generally when the goods are delivered to the customers’ specified locations.

Revenue from sale of goods is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Estimated sales returns and other allowances is generally made and adjusted based on historical experience and the consideration of varying contractual terms to recognize refund liabilities, which is classified under accrued expenses and other current liabilities.

In principle, payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month of when the invoice is issued. Due to the short term nature of the receivables from sale of goods with the immaterial discounted effect, the Company measures them at the original invoice amounts without discounting.

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Employee Benefits

Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

Retirement benefits

For defined contribution retirement benefit plans, payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution. For defined benefit retirement benefit plans, the cost of providing benefit is recognized based on actuarial calculations.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Income tax on unappropriated earnings is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the parent company only financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, net operating loss carryforwards and tax credits for research and development expenses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

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Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5. | CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the aforementioned Company’s accounting policies, the Company is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Critical Accounting Judgments

Revenue Recognition

The Company recognizes revenue when the conditions described in Note 4 are satisfied.

Commencement of Depreciation Related to Property, Plant and Equipment Classified as Equipment under Installation and Construction in Progress (EUI/CIP)

As described in Note 4, commencement of depreciation related to EUI/CIP involves determining when the assets are available for their intended use. The criteria the Company uses to determine whether EUI/CIP are available for their intended use involves subjective judgements and assumptions about the conditions necessary for the assets to be capable of operating in the intended manner.

Judgments on Lease Terms

In determining a lease term, the Company considers all facts and circumstances that create an economic incentive to exercise or not to exercise an option, including any expected changes in facts and circumstances from the commencement date until the exercise date of the option. Main factors considered include contractual terms and conditions covered by the optional periods, and the importance of the underlying asset to the lessee’s operations, etc. The lease term is reassessed if a significant change in circumstances that are within the control of the Company occurs.

Key Sources of Estimation and Uncertainty

Estimation of Sales Returns and Allowances

Sales returns and other allowance is estimated and recorded based on historical experience and in consideration of different contractual terms. The amount is deducted from revenue in the same period the related revenue is recorded. The Company periodically reviews the reasonableness of the estimates.

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Valuation of Inventory

Inventories are stated at the lower of cost or net realizable value, and the Company uses estimate to determine the net realizable value of inventory at the end of each reporting period.

The Company estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on assumptions of future demand within a specific time horizon.

Impairment of Tangible Assets, Right-of-use Assets and Intangible Assets Other than Goodwill

In the process of evaluating the potential impairment of tangible assets, right-of-use assets and intangible assets other than goodwill, the Company determines the independent cash flows, useful lives, expected future revenue and expenses related to the specific asset groups with the consideration of the nature of semiconductor industry. Any change in these estimates based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.

Realization of Deferred Income Tax Assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits can be utilized and feasible tax planning strategies. Any changes in the global economic environment, the industry trends and relevant laws and regulations could result in significant adjustments to the deferred tax assets.

Determination of Lessees’ Incremental Borrowing Rates

In determining a lessee’s incremental borrowing rate used in discounting lease payments, the Company mainly takes into account the market risk-free rates, the estimated lessee’s credit spreads and secured status in a similar economic environment.

6. | CASH AND CASH EQUIVALENTS

|  | December 31, 2019 |  | December 31, 2018
Cash and deposits in banks |  | $ | 141,450,698 |  |  | $ | 238,473,857 |
Repurchase agreements collateralized by corporate bonds |  |  | - |  |  |  | 1,229,600 |
Commercial paper |  |  | - |  |  |  | 499,068 |
|  | $ | 141,450,698 |  |  | $ | 240,202,525 |

Deposits in banks consisted of highly liquid time deposits that were readily convertible to known amounts of cash and were subject to an insignificant risk of changes in value.

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7. | FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

|  | December 31, 2019 |  | December 31, 2018
Financial assets |  |  |  |
Mandatorily measured at FVTPL |  |  |  |
Forward exchange contracts |  | $ | 27,481 |  |  | $ | 54,115 |
Financial liabilities |  |  |  |  |  |  |  |
Held for trading |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | 982,302 |  |  | $ | 30,232 |

The Company entered into forward exchange contracts to manage exposures due to fluctuations of foreign exchange rates. These forward exchange contracts did not meet the criteria for hedge accounting. Therefore, the Company did not apply hedge accounting treatment for these forward exchange contracts.

Outstanding forward exchange contracts consisted of the following:

|  |  |  | Contract Amount
|  | Maturity Date |  | (In Thousands)
December 31, 2019 |  |  |  |
Sell NT$/Buy EUR |  | January 2020 to June 2020 |  | NT$84,690,438/EUR2,509,000
Sell NT$/Buy JPY |  | January 2020 to March 2020 |  | NT$23,737,589/JPY85,600,000
Sell JPY/Buy US$ |  | January 2020 to February 2020 |  | JPY57,471,581/US$526,368
December 31, 2018 |  |  |  |
Sell NT$/Buy EUR |  | January 2019 to March 2019 |  | NT$18,545,854/EUR527,000
Sell NT$/Buy JPY |  | January 2019 to March 2019 |  | NT$4,757,858/JPY17,200,000
Sell US$/Buy JPY |  | January 2019 |  | US$162,834/JPY17,976,014
Sell US$/Buy NT$ |  | January 2019 |  | US$110,000/NT$3,386,459

8. | HEDGING FINANCIAL INSTRUMENTS

|  | December 31, 2019 |  | December 31, 2018
Financial assets- current |  |  |  |
Cash flow hedges |  |  |  |
Forward exchange contracts |  | $ | 3,504 |  |  | $ | 23,497 |
Financial liabilities- current |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | 1,798 |  |  | $ | 1,941 |

- 26 -

The Company entered into forward exchange contracts and foreign currency deposits to partially hedge foreign exchange rate risks associated with certain highly probable forecast transactions (capital expenditures). The hedge ratio is adjusted in response to the changes in the financial market and capped at 100%. The forward exchange contracts have maturities of 12 months or less.

On the basis of economic relationships, the Company expects that the value of forward exchange contracts and foreign currency deposits and the value of hedged transactions will change in opposite directions in response to movements in foreign exchange rates.

The main source of hedge ineffectiveness in these hedging relationships is driven by the effect of the counterparty’s own credit risk on the fair value of forward exchange contracts and foreign currency deposits. No other sources of ineffectiveness emerged from these hedging relationships. For the years ended December 31, 2019 and 2018, refer to Note 19(d) for gain or loss arising from changes in the fair value of hedging instruments and the amount transferred to initial carrying amount of hedged items.

The following tables summarize the information relating to the hedges for foreign currency risk.

December 31, 2019

Hedging Instruments |  | Contract Amount (In Thousands) |  | Maturity |  | Balance in Other Equity (Continuing Hedges)
Forward exchange contracts |  | NT$1,342,392/EUR40,000 |  | January 2020 |  | $ | (3,820 | )

December 31, 2018

Hedging Instruments |  | Contract Amount (In Thousands) |  | Maturity |  | Balance in Other Equity (Continuing Hedges)
Forward exchange contracts |  | NT$3,917,657/EUR112,000 |  | February 2019 to April 2019 |  | $ | 23,601 |

The effect for the years ended December 31, 2019 and 2018 is detailed below:

Hedging Instruments/Hedged Items |  | Increase (Decrease) in Value Used for Calculating Hedge Ineffectiveness
|  | Years Ended December 31
|  | 2019 |  | 2018
Hedging Instruments |  |  |  |
Forward exchange contracts |  | $ | (109,592 | ) |  | $ | 34,563 |
Foreign currency deposits |  |  | - |  |  |  | 6,412 |
|  | $ | (109,592 | ) |  | $ | 40,975 |
Hedged Items |  |  |  |  |  |  |  |
Forecast transaction (capital expenditures) |  | $ | 109,592 |  |  | $ | (40,975 | )

- 27 -

9. | NOTES AND ACCOUNTS RECEIVABLE, NET

|  | December 31, 2019 |  | December 31, 2018
At amortized cost |  |  |  |
Notes and accounts receivable |  | $ | 46,188,113 |  |  | $ | 33,097,452 |
Less: Loss allowance |  |  | (319,045 | ) |  |  | (7,132 | )
|  |  | 45,869,068 |  |  |  | 33,090,320 |
At FVTOCI |  |  | 3,255,865 |  |  |  | 3,595,069 |
|  | $ | 49,124,933 |  |  | $ | 36,685,389 |

The Company signed a contract with the bank to sell certain accounts receivable without recourse and transaction cost required. These accounts receivable are classified as at FVTOCI because they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

In principle, the payment term granted to customers is due 30 days from the invoice date or 30 days from the end of the month when the invoice is issued. Aside from recognizing impairment loss for credit-impaired accounts receivable, the Company recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers’ financial conditions, competitiveness and business outlook. For accounts receivable past due over 90 days without collaterals or guarantees, the Company recognizes loss allowance at full amount.

Aging analysis of notes and accounts receivable

|  | December 31, 2019 |  | December 31, 2018
Not past due |  | $ | 43,374,378 |  |  | $ | 29,258,313 |
Past due |  |  |  |  |  |  |  |
Past due within 30 days |  |  | 6,054,771 |  |  |  | 6,956,366 |
Past due 31-60 days |  |  | 10,864 |  |  |  | 464,879 |
Past due 61-120 days |  |  | 720 |  |  |  | 7,548 |
Past due over 121 days |  |  | 3,245 |  |  |  | 5,415 |
Less: Loss allowance |  |  | (319,045 | ) |  |  | (7,132 | )
|  | $ | 49,124,933 |  |  | $ | 36,685,389 |

All of the Company’s accounts receivable classified as at FVTOCI were not past due.

Movements of the loss allowance for accounts receivable

|  | Years Ended December 31
|  | 2019 |  | 2018
Balance, beginning of year |  | $ | 7,132 |  |  | $ | 224,352 |
Provision (Reversal) |  |  | 311,913 |  |  |  | (217,220 | )
Balance, end of year |  | $ | 319,045 |  |  | $ | 7,132 |

For the years ended December 31, 2018 and 2019, the changes in loss allowance were mainly due to the variations in the expected credit loss ratios and the balance of accounts receivable of different risk levels.

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1 0. | INVENTORIES

|  | December 31, 2019 |  | December 31, 2018
Finished goods |  | $ | 8,533,179 |  |  | $ | 10,920,351 |
Work in process |  |  | 49,268,466 |  |  |  | 70,405,998 |
Raw materials |  |  | 15,046,116 |  |  |  | 14,110,534 |
Supplies and spare parts |  |  | 3,416,090 |  |  |  | 2,651,277 |
|  | $ | 76,263,851 |  |  | $ | 98,088,160 |

Reversal of write-down of inventories resulting from the increase in net realizable value and write-down of inventories to net realizable value were included in the cost of revenue, as illustrated below:

|  | Years Ended December 31
|  | 2019 |  | 2018
Inventory losses (reversal of write-down of inventories) |  | $ | (2,071,888 | ) |  | $ | 1,098,915 |

The aforementioned inventory losses (reversal of write-down of inventories) exclude wafer contamination losses and computer virus outbreak losses. Please refer to related losses in Note 34.

1 1. | INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments accounted for using the equity method consisted of the following:

|  | December 31, 2019 |  | December 31, 2018
Subsidiaries |  | $ | 539,843,621 |  |  | $ | 531,717,913 |
Associates |  |  | 18,660,268 |  |  |  | 17,842,971 |
|  | $ | 558,503,889 |  |  | $ | 549,560,884 |

| a. | Investments in subsidiaries

Subsidiaries consisted of the following:

|  |  |  | Place of |  | Carrying Amount |  | % of Ownership and Voting Rights Held by the Company
Subsidiaries |  | Principal Activities |  | Incorporation and Operation |  | December 31, 2019 |  | December 31, 2018 |  | December 31, 2019 |  | December 31, 2018
TSMC Global Ltd. (TSMC Global) |  | Investment activities |  | Tortola, British Virgin Islands |  | $ | 397,737,270 |  |  | $ | 393,577,931 |  |  |  | 100% |  |  |  | 100% |
TSMC China Company Limited (TSMC China) |  | Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices |  | Shanghai, China |  |  | 57,289,154 |  |  |  | 55,466,911 |  |  |  | 100% |  |  |  | 100% |
TSMC Partners, Ltd. (TSMC Partners) |  | Investing in companies involved in the design, manufacture, and other related business in the semiconductor industry and other investment activities |  | Tortola, British Virgin Islands |  |  | 53,388,267 |  |  |  | 52,339,094 |  |  |  | 100% |  |  |  | 100% |
TSMC Nanjing Company Limited (TSMC Nanjing) |  | Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices |  | Nanjing, China |  |  | 21,364,939 |  |  |  | 20,601,413 |  |  |  | 100% |  |  |  | 100% |
TSMC North America |  | Selling and marketing of integrated circuits and other semiconductor devices |  | San Jose, California, U.S.A. |  |  | 4,569,825 |  |  |  | 4,269,393 |  |  |  | 100% |  |  |  | 100% |

(Continued)

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|  |  |  | Place of |  | Carrying Amount |  | % of Ownership and Voting Rights Held by the Company
Subsidiaries |  | Principal Activities |  | Incorporation and Operation |  | December 31, 2019 |  | December 31, 2018 |  | December 31, 2019 |  | December 31, 2018
VisEra Technologies Company Ltd. (VisEra Tech) |  | Engaged in manufacturing electronic spare parts and in researching, developing, designing, manufacturing, selling, packaging and testing of color filter |  | Hsinchu, Taiwan |  | $ | 4,541,741 |  |  | $ | 4,531,929 |  |  |  | 87% |  |  |  | 87% |
TSMC Europe B.V. (TSMC Europe) |  | Customer service and supporting activities |  | Amsterdam, the Netherlands |  |  | 462,479 |  |  |  | 445,828 |  |  |  | 100% |  |  |  | 100% |
VentureTech Alliance Fund III, L.P. (VTAF III) |  | Investing in new start-up technology companies |  | Cayman Islands |  |  | 231,504 |  |  |  | 194,660 |  |  |  | 98% |  |  |  | 98% |
TSMC Japan Limited (TSMC Japan) |  | Customer service and supporting activities |  | Yokohama, Japan |  |  | 142,620 |  |  |  | 141,136 |  |  |  | 100% |  |  |  | 100% |
VentureTech Alliance Fund II, L.P. (VTAF II) |  | Investing in new start-up technology companies |  | Cayman Islands |  |  | 75,095 |  |  |  | 128,758 |  |  |  | 98% |  |  |  | 98% |
TSMC Korea Limited (TSMC Korea) |  | Customer service and supporting activities |  | Seoul, Korea |  |  | 40,727 |  |  |  | 40,966 |  |  |  | 100% |  |  |  | 100% |
TSMC Solar Europe GmbH |  | Selling of solar related products and providing customer service |  | Hamburg, Germany |  |  | - |  |  |  | (20,106 | ) |  |  | - |  |  |  | 100% |
|  |  |  |  |  | $ | 539,843,621 |  |  | $ | 531,717,913 |  |  |  |  |  |  |  |  |

(Concluded)

To lower the hedging cost, in 2018, the Company increased its investment in TSMC Global for the amount of NT$62,272,080 thousand. This project was approved by the Investment Commission, Ministry of Economic Affairs, R.O.C. (MOEA).

In 2018, the Company increased its investment in TSMC Nanjing for the amount of NT$2,361,320 thousand. This project was approved by the Investment Commission, MOEA.

TSMC Solar Europe GmbH has completed the liquidation procedures in March 2019.

| b. | Investments in associates

Associates consisted of the following:

|  |  |  | Place of |  | Carrying Amount |  | % of Ownership and Voting Rights Held by the Company
Name of Associate |  | Principal Activities |  | Incorporation and Operation |  | December 31, 2019 |  | December 31, 2018 |  | December 31, 2019 |  | December 31, 2018
Vanguard International Semiconductor Corporation (VIS) |  | Manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks |  | Hsinchu, Taiwan |  | $ | 9,027,572 |  |  | $ | 9,006,126 |  |  |  | 28% |  |  |  | 28% |
Systems on Silicon Manufacturing Company Pte Ltd. (SSMC) |  | Manufacturing and selling of integrated circuits and other semiconductor devices |  | Singapore |  |  | 6,502,174 |  |  |  | 5,772,815 |  |  |  | 39% |  |  |  | 39% |
Xintec Inc. (Xintec) |  | Wafer level chip size packaging and wafer level post passivation interconnection service |  | Taoyuan, Taiwan |  |  | 1,846,145 |  |  |  | 1,764,607 |  |  |  | 41% |  |  |  | 41% |
Global Unichip Corporation (GUC) |  | Researching, developing, manufacturing, testing and marketing of integrated circuits |  | Hsinchu, Taiwan |  |  | 1,284,377 |  |  |  | 1,299,423 |  |  |  | 35% |  |  |  | 35% |
|  |  |  |  |  | $ | 18,660,268 |  |  | $ | 17,842,971 |  |  |  |  |  |  |  |  |

As of December 31, 2019 and 2018, no investments in associates are individually material to the Company. Please refer to the parent company only statements of comprehensive income for recognition of share of both profit (loss) and other comprehensive income (loss) of associates that are not individually material.

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The market prices of the i nvestment s accounted for using the equity method in publicly traded stocks calculated by the closing price at the end of the reporting period are summarized as follow s. The closing price represents the quoted price in active markets, the level 1 fair value measurement.

Name of Associate |  | December 31, 2019 |  | December 31, 2018
VIS |  | $ | 36,812,923 |  |  | $ | 27,621,298 |
GUC |  | $ | 11,251,774 |  |  | $ | 9,617,699 |
Xintec |  | $ | 8,958,195 |  |  | $ | 3,783,585 |

1 2. | PROPERTY, PLANT AND EQUIPMENT

2019

|  | December 31, 2019
Assets used by the Company |  | $ | 1,310,882,220 |
Assets subject to operating leases |  |  | 18,414 |
|  | $ | 1,310,900,634 |

| a. | Assets used by the Company

|  | Land |  | Buildings |  | Machinery and Equipment |  | Office Equipment |  | Equipment under Installation and Construction in Progress |  | Total
Cost |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2019 |  | $ | 3,212,000 |  |  | $ | 381,150,802 |  |  | $ | 2,585,629,465 |  |  | $ | 43,722,686 |  |  | $ | 171,277,329 |  |  | $ | 3,184,992,282 |
Additions |  |  | - |  |  |  | 20,149,613 |  |  |  | 173,199,951 |  |  |  | 6,908,814 |  |  |  | 355,119,486 |  |  |  | 555,377,864 |
Disposals or retirements |  |  | - |  |  |  | (158,970 | ) |  |  | (21,635,299 | ) |  |  | (986,625 | ) |  |  | - |  |  |  | (22,780,894 | )
Transfers from right-of-use assets |  |  | - |  |  |  | - |  |  |  | 619,779 |  |  |  | - |  |  |  | - |  |  |  | 619,779 |
Balance at December 31, 2019 |  | $ | 3,212,000 |  |  | $ | 401,141,445 |  |  | $ | 2,737,813,896 |  |  | $ | 49,644,875 |  |  | $ | 526,396,815 |  |  | $ | 3,718,209,031 |
Accumulated depreciation and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2019 |  | $ | - |  |  | $ | 198,301,715 |  |  | $ | 1,931,489,635 |  |  | $ | 29,950,916 |  |  | $ | - |  |  | $ | 2,159,742,266 |
Additions |  |  | - |  |  |  | 24,077,824 |  |  |  | 235,731,567 |  |  |  | 5,392,188 |  |  |  | - |  |  |  | 265,201,579 |
Disposals or retirements |  |  | - |  |  |  | (144,402 | ) |  |  | (16,206,228 | ) |  |  | (985,679 | ) |  |  | - |  |  |  | (17,336,309 | )
Transfers from right-of-use assets |  |  | - |  |  |  | - |  |  |  | 20,659 |  |  |  | - |  |  |  | - |  |  |  | 20,659 |
Reversal of impairment |  |  | - |  |  |  | - |  |  |  | (301,384 | ) |  |  | - |  |  |  | - |  |  |  | (301,384 | )
Balance at December 31, 2019 |  | $ | - |  |  | $ | 222,235,137 |  |  | $ | 2,150,734,249 |  |  | $ | 34,357,425 |  |  | $ | - |  |  | $ | 2,407,326,811 |
Carrying amounts at December 31, 2019 |  | $ | 3,212,000 |  |  | $ | 178,906,308 |  |  | $ | 587,079,647 |  |  | $ | 15,287,450 |  |  | $ | 526,396,815 |  |  | $ | 1,310,882,220 |

The significant part of the Company’s buildings includes main plants, mechanical and electrical power equipment and clean rooms, and the related depreciation is calculated using the estimated useful lives of 20 years, 10 years and 10 years, respectively.

In the first quarter of 2019, the Company recognized a reversal of impairment loss of NT$301,384 thousand due to redeployment of certain idle machinery and equipment. Such reversal of impairment loss was recognized in other operating income and expenses.

- 31 -

| b. | Assets subject to operating leases

|  |  |  | Buildings
Cost |  |  |  |
Balance at January 1, 2019 |  |  |  | $ | 494,582 |
Balance at December 31, 2019 |  |  |  | $ | 494,582 |
Accumulated depreciation |  |  |  |  |  |
Balance at January 1, 2019 |  |  |  | $ | 457,657 |
Additions |  |  |  |  | 18,511 |
Balance at December 31, 2019 |  |  |  | $ | 476,168 |
Carrying amounts at December 31, 2019 |  |  |  | $ | 18,414 |

Operating leases relate to leases of buildings with lease terms between 1 to 2 years. The lessees do not have purchase options to acquire the assets at the expiry of the lease periods.

The maturity analysis of operating lease payments receivable for the buildings is as follows:

|  |  |  | December 31, 2019
Year 1 |  |  |  | $ | 1,458 |

2018

|  | Land |  | Buildings |  | Machinery and Equipment |  | Office Equipment |  | Equipment under Installation and Construction in Progress |  | Total
Cost |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2018 |  | $ | 3,212,000 |  |  | $ | 357,391,050 |  |  | $ | 2,369,226,722 |  |  | $ | 39,403,217 |  |  | $ | 144,776,878 |  |  | $ | 2,914,009,867 |
Additions |  |  | - |  |  |  | 24,665,225 |  |  |  | 231,468,189 |  |  |  | 5,036,411 |  |  |  | 26,500,451 |  |  |  | 287,670,276 |
Disposals or retirements |  |  | - |  |  |  | (410,891 | ) |  |  | (15,065,446 | ) |  |  | (716,942 | ) |  |  | - |  |  |  | (16,193,279 | )
Balance at December 31, 2018 |  | $ | 3,212,000 |  |  | $ | 381,645,384 |  |  | $ | 2,585,629,465 |  |  | $ | 43,722,686 |  |  | $ | 171,277,329 |  |  | $ | 3,185,486,864 |
Accumulated depreciation and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2018 |  | $ | - |  |  | $ | 176,623,784 |  |  | $ | 1,695,482,201 |  |  | $ | 25,547,912 |  |  | $ | - |  |  | $ | 1,897,653,897 |
Additions |  |  | - |  |  |  | 22,534,543 |  |  |  | 246,686,584 |  |  |  | 5,119,413 |  |  |  | - |  |  |  | 274,340,540 |
Disposals or retirements |  |  | - |  |  |  | (398,955 | ) |  |  | (11,102,618 | ) |  |  | (716,409 | ) |  |  | - |  |  |  | (12,217,982 | )
Impairment |  |  | - |  |  |  | - |  |  |  | 423,468 |  |  |  | - |  |  |  | - |  |  |  | 423,468 |
Balance at December 31, 2018 |  | $ | - |  |  | $ | 198,759,372 |  |  | $ | 1,931,489,635 |  |  | $ | 29,950,916 |  |  | $ | - |  |  | $ | 2,160,199,923 |
Carrying amounts at December 31, 2018 |  | $ | 3,212,000 |  |  | $ | 182,886,012 |  |  | $ | 654,139,830 |  |  | $ | 13,771,770 |  |  | $ | 171,277,329 |  |  | $ | 1,025,286,941 |

The significant part of the Company’s buildings includes main plants, mechanical and electrical power equipment and clean rooms, and the related depreciation is calculated using the estimated useful lives of 20 years, 10 years and 10 years, respectively.

For the year ended December 31, 2018, the Company recognized an impairment loss of NT$423,468 thousand for certain machinery and equipment that was assessed to have no future use, and the recoverable amount of certain machinery and equipment was nil. Such impairment loss was recognized in other operating income

- 32 -

and expenses.

1 3. | LEASE ARRANGEMENTS

2019

| a. | Right-of-use assets

|  |  |  | December 31, 2019
Carrying amounts |  |  |  |
Land |  |  |  | $ | 13,830,199 |
Buildings |  |  |  |  | 402,836 |
Machinery and equipment |  |  |  |  | 775,809 |
Office equipment |  |  |  |  | 21,176 |
|  |  |  | $ | 15,030,020 |

|  |  |  | Year Ended December 31, 2019
Additions to right-of-use assets |  |  |  | $ | 639,879 |

|  |  |  | Year Ended December 31, 2019
Depreciation of right-of-use assets |  |  |  |
Land |  |  |  | $ | 944,052 |
Buildings |  |  |  |  | 105,873 |
Machinery and equipment |  |  |  |  | 1,184,374 |
Office equipment |  |  |  |  | 10,154 |
|  |  |  | $ | 2,244,453 |
Income from subleasing right-of-use assets (classified under other operating income and expenses, net) |  |  |  | $ | 44,796 |

| b. | Lease liabilities

|  | December 31, 2019
Carrying amounts |  |
Current portion (classified under accrued expenses and other current liabilities) |  | $ | 1,843,556 |
Noncurrent portion |  |  | 13,300,263 |
|  | $ | 15,143,819 |

- 33 -

Range s of discount rate s for lease liabilities are as follows:

|  | December 31, 2019
Land |  |  | 0.67%-0.94% |
Buildings |  |  | 0.67%-0.71% |
Machinery and equipment |  |  | 3.24% |
Office equipment |  |  | 0.64%-0.71% |

| c. | Material terms of right-of-use assets

The Company leases land and buildings mainly for the use of plants and offices with lease terms of 2 to 22 years. The lease contracts for land located in the R.O.C. specify that lease payments will be adjusted every 2 years on the basis of changes in announced land value prices. The Company does not have purchase options to acquire the leasehold land and buildings at the end of the lease terms.

The Company leases machinery and equipment for use in operation with lease terms of 2 years. The Company has purchase options to acquire leasehold machinery and equipment at the end of the lease terms.

| d. | Subleases of right-of-use assets

The Company subleases its right-of-use assets for buildings under operating leases with lease terms of 1 year.

The maturity analysis of lease payments receivable under operating subleases is as follows:

|  |  |  | December 31, 2019
Year 1 |  |  |  | $ | 50,862 |

| e. | Other lease information

|  |  |  | Year Ended December 31, 2019
Expenses relating to short-term leases |  |  |  | $ | 4,991,637 |
Expenses relating to variable lease payments not included in the measurement of lease liabilities |  |  |  | $ | 158,375 |

|  |  |  | Year Ended December 31, 2019
Total cash outflow for leases |  |  |  | $ | 7,324,585 |

- 34 -

2018

The Company’s major operating leases are arrangements on several parcels of land and machinery and equipment.

The Company expensed the lease payments as follows:

|  |  |  | Year Ended December 31, 2018
Minimum lease payments |  |  |  | $ | 3,773,364 |

Future minimum lease payments under non-cancellable operating leases are as follows:

|  |  |  | December 31, 2018
Not later than 1 year |  |  |  | $ | 5,510,729 |
Later than 1 year and not later than 5 years |  |  |  |  | 4,957,770 |
Later than 5 years |  |  |  |  | 8,253,382 |
|  |  |  | $ | 18,721,881 |

1 4. | INTANGIBLE ASSETS

|  | Goodwill |  | Technology License Fees |  | Software and System Design Costs |  | Patent and Others |  | Total
Cost |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2019 |  | $ | 1,567,756 |  |  | $ | 10,921,844 |  |  | $ | 29,140,011 |  |  | $ | 7,607,537 |  |  | $ | 49,237,148 |
Additions |  |  | - |  |  |  | 4,879,562 |  |  |  | 3,639,706 |  |  |  | 663,509 |  |  |  | 9,182,777 |
Disposals or retirements |  |  | - |  |  |  | - |  |  |  | (260,904 | ) |  |  | - |  |  |  | (260,904 | )
Balance at December 31, 2019 |  | $ | 1,567,756 |  |  | $ | 15,801,406 |  |  | $ | 32,518,813 |  |  | $ | 8,271,046 |  |  | $ | 58,159,021 |
Accumulated amortization and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2019 |  | $ | - |  |  | $ | 8,703,391 |  |  | $ | 22,863,319 |  |  | $ | 5,240,508 |  |  | $ | 36,807,218 |
Additions |  |  | - |  |  |  | 1,066,834 |  |  |  | 3,610,902 |  |  |  | 661,150 |  |  |  | 5,338,886 |
Disposals or retirements |  |  | - |  |  |  | - |  |  |  | (258,527 | ) |  |  | - |  |  |  | (258,527 | )
Balance at December 31, 2019 |  | $ | - |  |  | $ | 9,770,225 |  |  | $ | 26,215,694 |  |  | $ | 5,901,658 |  |  | $ | 41,887,577 |
Carrying amounts at December 31, 2019 |  | $ | 1,567,756 |  |  | $ | 6,031,181 |  |  | $ | 6,303,119 |  |  | $ | 2,369,388 |  |  | $ | 16,271,444 |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2018 |  | $ | 1,567,756 |  |  | $ | 10,388,175 |  |  | $ | 24,963,709 |  |  | $ | 5,590,392 |  |  | $ | 42,510,032 |
Additions |  |  | - |  |  |  | 533,669 |  |  |  | 4,361,894 |  |  |  | 2,017,145 |  |  |  | 6,912,708 |
Disposals or retirements |  |  | - |  |  |  | - |  |  |  | (185,592 | ) |  |  | - |  |  |  | (185,592 | )
Balance at December 31, 2018 |  | $ | 1,567,756 |  |  | $ | 10,921,844 |  |  | $ | 29,140,011 |  |  | $ | 7,607,537 |  |  | $ | 49,237,148 |
Accumulated amortization and impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2018 |  | $ | - |  |  | $ | 7,639,775 |  |  | $ | 20,282,457 |  |  | $ | 4,717,673 |  |  | $ | 32,639,905 |
Additions |  |  | - |  |  |  | 1,063,616 |  |  |  | 2,766,396 |  |  |  | 522,835 |  |  |  | 4,352,847 |
Disposals or retirements |  |  | - |  |  |  | - |  |  |  | (185,534 | ) |  |  | - |  |  |  | (185,534 | )
Balance at December 31, 2018 |  | $ | - |  |  | $ | 8,703,391 |  |  | $ | 22,863,319 |  |  | $ | 5,240,508 |  |  | $ | 36,807,218 |
Carrying amounts at December 31, 2018 |  | $ | 1,567,756 |  |  | $ | 2,218,453 |  |  | $ | 6,276,692 |  |  | $ | 2,367,029 |  |  | $ | 12,429,930 |

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The Company’s goodwill has been tested for impairment at the end of the annual reporting period and the recoverable amount is determined based on the value in use. The value in use was calculated based on the cash flow forecast from the financial budgets covering the future five-year period, and the Company used annual discount rate s of 8.0% and 9.0% in its test of im pairment as of December 31, 2019 and 2018, respectively, to reflect the relevant specific risk in the cash-generating unit.

For the years ended December 31, 2019 and 2018, the Company did not recognize any impairment loss on goodwill.

1 5. | SHORT-TERM LOANS

|  | December 31, 2019 |  | December 31, 2018
Unsecured loans |  | $ | 118,522,290 |  |  | $ | 88,754,640 |
Related parties unsecured loans |  |  | 29,988,000 |  |  |  | 3,227,700 |
|  | $ | 148,510,290 |  |  | $ | 91,982,340 |
Original loan content |  |  |  |  |  |  |  |
US$ (in thousands) |  | $ | 3,370,000 |  |  | $ | 2,715,000 |
EUR(in thousands) |  |  | 1,410,000 |  |  |  | 242,000 |
Annual interest rate |  |  | 0%-2.22% |  |  |  | 0.01%-3.22% |
Maturity date |  |  | Due by July 2020 |  |  |  | Due by April 2019 |

The borrowing rates from loans between the Company and related parties should be determined by mutual consent as the loan are repayable on related parties’ demand.

1 6. | BONDS PAYABLE

|  | December 31, 2019 |  | December 31, 2018
Domestic unsecured bonds |  | $ | 56,900,000 |  |  | $ | 91,800,000 |
Less: Current portion |  |  | (31,800,000 | ) |  |  | (34,900,000 | )
|  | $ | 25,100,000 |  |  | $ | 56,900,000 |

The major terms of domestic unsecured bonds are as follows:

Issuance |  | Tranche |  | Issuance Period |  | Total Amount |  | Coupon Rate |  | Repayment and Interest Payment
100-1 |  | B |  | September 2011 to September 2018 |  | $ | 7,500,000 |  |  |  | 1.63% |  |  | Bullet repayment; interest payable annually
100-2 |  | B |  | January 2012 to January 2019 |  |  | 7,000,000 |  |  |  | 1.46% |  |  | The same as above
101-1 |  | B |  | August 2012 to August 2019 |  |  | 9,000,000 |  |  |  | 1.40% |  |  | The same as above
101-2 |  | B |  | September 2012 to September 2019 |  |  | 9,000,000 |  |  |  | 1.39% |  |  | The same as above

(Continued)

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Issuance |  | Tranche |  | Issuance Period |  | Total Amount |  | Coupon Rate |  | Repayment and Interest Payment
101-3 |  | - |  | October 2012 to October 2022 |  | $ | 4,400,000 |  |  |  | 1.53% |  |  | Bullet repayment; interest payable annually
101-4 |  | A |  | January 2013 to January 2018 |  |  | 10,600,000 |  |  |  | 1.23% |  |  | The same as above
|  | B |  | January 2013 to January 2020 |  |  | 10,000,000 |  |  |  | 1.35% |  |  | The same as above
|  | C |  | January 2013 to January 2023 |  |  | 3,000,000 |  |  |  | 1.49% |  |  | The same as above
102-1 |  | A |  | February 2013 to February 2018 |  |  | 6,200,000 |  |  |  | 1.23% |  |  | The same as above
|  | B |  | February 2013 to February 2020 |  |  | 11,600,000 |  |  |  | 1.38% |  |  | The same as above
|  | C |  | February 2013 to February 2023 |  |  | 3,600,000 |  |  |  | 1.50% |  |  | The same as above
102-2 |  | A |  | July 2013 to July 2020 |  |  | 10,200,000 |  |  |  | 1.50% |  |  | The same as above
|  | B |  | July 2013 to July 2023 |  |  | 3,500,000 |  |  |  | 1.70% |  |  | The same as above
102-3 |  | B |  | August 2013 to August 2019 |  |  | 8,500,000 |  |  |  | 1.52% |  |  | The same as above
102-4 |  | C |  | September 2013 to March 2019 |  |  | 1,400,000 |  |  |  | 1.60% |  |  | Bullet repayment; interest payable annually (interest for the six months prior to maturity will accrue on the basis of actual days and be repayable at maturity)
|  | D |  | September 2013 to March 2021 |  |  | 2,600,000 |  |  |  | 1.85% |  |  | The same as above
|  | E |  | September 2013 to March 2023 |  |  | 5,400,000 |  |  |  | 2.05% |  |  | The same as above
|  | F |  | September 2013 to September 2023 |  |  | 2,600,000 |  |  |  | 2.10% |  |  | Bullet repayment; interest payable annually

(Concluded)

17. | RETIREMENT BENEFIT PLANS

| a. | Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Accordingly, the Company recognized expenses of NT$2,063,508 thousand and NT$2,028,928 thousand for the years ended December 31, 2019 and 2018, respectively.

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| b. | Defined benefit plans

The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.

Amounts recognized in respect of these defined benefit plans were as follows:

|  | Years Ended December 31
|  | 2019 |  | 2018
Current service cost |  | $ | 135,645 |  |  | $ | 137,758 |
Net interest expense |  |  | 123,951 |  |  |  | 144,108 |
Components of defined benefit costs recognized in profit or loss |  |  | 259,596 |  |  |  | 281,866 |
Remeasurement on the net defined benefit liability: |  |  |  |  |  |  |  |
Return on plan assets (excluding amounts included in net interest expense) |  |  | (124,344 | ) |  |  | (71,288 | )
Actuarial loss (gain) arising from experience adjustments |  |  | (438,009 | ) |  |  | 334,630 |
Actuarial gain arising from changes in demographic assumptions |  |  | (233,239 | ) |  |  | - |
Actuarial loss arising from changes in financial assumptions |  |  | 541,697 |  |  |  | 597,820 |
Components of defined benefit costs recognized in other comprehensive income |  |  | (253,895 | ) |  |  | 861,162 |
Total |  | $ | 5,701 |  |  | $ | 1,143,028 |

The pension costs of the aforementioned defined benefit plans were recognized in profit or loss by the following categories:

|  | Years Ended December 31
|  | 2019 |  | 2018
Cost of revenue |  | $ | 157,845 |  |  | $ | 177,772 |
Research and development expenses |  |  | 72,686 |  |  |  | 79,143 |
General and administrative expenses |  |  | 25,063 |  |  |  | 20,591 |
Marketing expenses |  |  | 4,002 |  |  |  | 4,360 |
|  | $ | 259,596 |  |  | $ | 281,866 |

The amounts arising from the defined benefit obligation of the Company were as follows:

|  | December 31, 2019 |  | December 31, 2018
Present value of defined benefit obligation |  | $ | 13,484,090 |  |  | $ | 13,662,684 |
Fair value of plan assets |  |  | (4,301,594 | ) |  |  | (4,011,279 | )
Net defined benefit liability |  | $ | 9,182,496 |  |  | $ | 9,651,405 |

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Movements in the present value of the defined benefit obligation were as follows:

|  | Years Ended December 31
|  | 2019 |  | 2018
Balance, beginning of year |  | $ | 13,662,684 |  |  | $ | 12,774,593 |
Current service cost |  |  | 135,645 |  |  |  | 137,758 |
Interest expense |  |  | 175,401 |  |  |  | 207,804 |
Remeasurement: |  |  |  |  |  |  |  |
Actuarial loss (gain) arising from experience adjustments |  |  | (438,009 | ) |  |  | 334,630 |
Actuarial gain arising from changes in demographic assumptions |  |  | (233,239 | ) |  |  | - |
Actuarial loss arising from changes in financial assumptions |  |  | 541,697 |  |  |  | 597,820 |
Benefits paid from plan assets |  |  | (344,131 | ) |  |  | (274,326 | )
Benefits paid directly by the Company |  |  | (15,958 | ) |  |  | (115,595 | )
Balance, end of year |  | $ | 13,484,090 |  |  | $ | 13,662,684 |

Movements in the fair value of the plan assets were as follows:

|  | Years Ended December 31
|  | 2019 |  | 2018
Balance, beginning of year |  | $ | 4,011,279 |  |  | $ | 3,923,889 |
Interest income |  |  | 51,450 |  |  |  | 63,696 |
Remeasurement: |  |  |  |  |  |  |  |
Return on plan assets (excluding amounts included in net interest expense) |  |  | 124,344 |  |  |  | 71,288 |
Contributions from employer |  |  | 458,652 |  |  |  | 226,732 |
Benefits paid from plan assets |  |  | (344,131 | ) |  |  | (274,326 | )
Balance, end of year |  | $ | 4,301,594 |  |  | $ | 4,011,279 |

The fair value of the plan assets by major categories at the end of reporting period was as follows:

|  | December 31, 2019 |  | December 31, 2018
Cash |  | $ | 713,204 |  |  | $ | 756,126 |
Equity instruments |  |  | 2,313,828 |  |  |  | 2,148,040 |
Debt instruments |  |  | 1,274,562 |  |  |  | 1,107,113 |
|  | $ | 4,301,594 |  |  | $ | 4,011,279 |

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

|  | Measurement Date
|  | December 31, 2019 |  | December 31, 2018
Discount rate |  |  | 0.90% |  |  |  | 1.30% |
Future salary increase rate |  |  | 3.00% |  |  |  | 3.00% |

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the following risks:

| 1) | Investment risk: The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the rate of return on assets

- 39 -

|  | shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

| 2) | Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

Assuming a hypothetical decrease in interest rate at the end of the reporting period contributed to a decrease of 0.5% in the discount rate and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$724,963 thousand and NT$921,750 thousand as of December 31, 2019 and 2018, respectively.

| 3) | Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

Assuming the expected salary rate increases by 0.5% at the end of the reporting period and all other assumptions were held constant, the present value of the defined benefit obligation would increase by NT$706,502 thousand and NT$901,629 thousand as of December 31, 2019 and 2018, respectively.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability.

The Company expects to make contributions of NT$230,864 thousand to the defined benefit plans in the next year starting from December 31, 2019. The weighted average duration of the defined benefit obligation is 10 years.

18. | Guarantee deposits

|  | December 31, 2019 |  | December 31, 2018
Capacity guarantee |  | $ | 1,499,400 |  |  | $ | 9,289,628 |
Others |  |  | 191,352 |  |  |  | 205,020 |
|  | $ | 1,690,752 |  |  | $ | 9,494,648 |
Current portion (classified under accrued expenses and other current liabilities) |  | $ | 1,520,306 |  |  | $ | 6,148,000 |
Noncurrent portion |  |  | 170,446 |  |  |  | 3,346,648 |
|  | $ | 1,690,752 |  |  | $ | 9,494,648 |

Some of guarantee deposits were refunded to customers by offsetting related accounts receivable.

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19. | EQUITY

| a. | Capital stock

|  | December 31, 2019 |  | December 31, 2018
Authorized shares (in thousands) |  |  | 28,050,000 |  |  |  | 28,050,000 |
Authorized capital |  | $ | 280,500,000 |  |  | $ | 280,500,000 |
Issued and paid shares (in thousands) |  |  | 25,930,380 |  |  |  | 25,930,380 |
Issued capital |  | $ | 259,303,805 |  |  | $ | 259,303,805 |

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

The authorized shares include 500,000 thousand shares allocated for the exercise of employee stock options.

As of December 31, 2019, 1,065,122 thousand ADSs of the Company were traded on the NYSE. The number of common shares represented by the ADSs was 5,325,610 thousand shares (one ADS represents five common shares).

| b. | Capital surplus

|  | December 31, 2019 |  | December 31, 2018
Additional paid-in capital |  | $ | 24,184,939 |  |  | $ | 24,184,939 |
From merger |  |  | 22,804,510 |  |  |  | 22,804,510 |
From convertible bonds |  |  | 8,892,847 |  |  |  | 8,892,847 |
From share of changes in equities of subsidiaries |  |  | 121,843 |  |  |  | 121,473 |
From share of changes in equities of associates |  |  | 302,234 |  |  |  | 282,820 |
Donations |  |  | 33,336 |  |  |  | 29,343 |
|  | $ | 56,339,709 |  |  | $ | 56,315,932 |

Under the relevant laws, the capital surplus generated from donations and the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, mergers and convertible bonds) may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain percentage of the Company’s paid-in capital. The capital surplus from share of changes in equities of subsidiaries and associates and dividend of a claim extinguished by a prescription may be used to offset a deficit; however, when generated from issuance of restricted shares for employees, such capital surplus may not be used for any purpose.

| c. | Retained earnings and dividend policy

The amendments to the Company’s Articles of Incorporation had been approved by the Company’s shareholders in its meeting held on June 5, 2019, which stipulate that earnings distribution may be made on a quarterly basis after the close of each quarter. Distribution of earnings by way of cash dividends should be approved by the Company’s Board of Directors and reported to the Company’s shareholders in its meeting.

- 41 -

The Company’s amended Articles of Incorporation provide that, when allocating earnings, the Company shall first estimate and reserve the taxes to be paid, offset its losses, set aside a l egal capital reserve at 10% of the remaining earnings (u ntil the accumulated l egal capital reserve equals the Company’s paid-in capital), then set aside a s pecial capital reserve in accordance with relevant laws or regulations or as requested by the authorities in charge. Any balance left over shall be allocated according to relevant laws and the Company’s Articles of Incorporation.

The Company’s Articles of Incorporation also provide that profits of the Company may be distributed by way of cash dividend and/or stock dividend. However, distribution of earnings shall be made preferably by way of cash dividend. Distribution of earnings may also be made by way of stock dividend, provided that the ratio for stock dividend shall not exceed 50% of the total distribution.

The reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of the paid-in capital if the Company incurs no loss.

Pursuant to existing regulations, the Company is required to set aside additional special capital reserve equivalent to the net debit balance of the other components of stockholders’ equity, such as the accumulated balance of foreign currency translation reserve, unrealized valuation gain or loss from fair value through other comprehensive income financial assets, unrealized valuation gain or loss from available-for-sale financial assets, gain or loss from changes in fair value of hedging instruments in cash flow hedges, etc. For the subsequent decrease in the deduction amount to stockholders’ equity, any special reserve appropriated may be reversed to the extent that the net debit balance reverses.

The appropriations of 2018 and 2017 earnings have been approved by the Company’s shareholders in its meetings held on June 5, 2019 and June 5, 2018, respectively. The appropriations and cash dividends per share were as follows:

|  | Appropriation of Earnings |  | Cash Dividends Per Share (NT$)
|  | For Fiscal |  | For Fiscal |  | For Fiscal |  | For Fiscal
|  | Year 2018 |  | Year 2017 |  | Year 2018 |  | Year 2017
Legal capital reserve |  | $ | 35,113,088 |  |  | $ | 34,311,148 |  |  |  |  |
Special capital reserve |  | $ | (11,459,458 | ) |  | $ | 26,907,527 |  |  |  |  |
Cash dividends to shareholders |  | $ | 207,443,044 |  |  | $ | 207,443,044 |  |  | $ | 8.0 |  |  | $ | 8.0 |

The appropriations of 2019 earnings for each quarter have been approved by the Company’s Board of Directors in its meeting. The appropriations and cash dividends per share were as follows:

|  | Fourth Quarter |  | Third Quarter |  | Second Quarter |  | First Quarter
Resolution date of TSMC’s |  | of 2019 |  | of 2019 |  | of 2019 |  | of 2019
Board of Directors in its meeting |  | February 11, 2020 |  | November 12, 2019 |  | August 13, 2019 |  | June 5, 2019
Special capital reserve |  | $ | 16,893,073 |  |  | $ | 3,289,166 |  |  | $ | (3,338,190 | ) |  | $ | (4,723,939 | )
Cash dividends to shareholders |  | $ | 64,825,951 |  |  | $ | 64,825,951 |  |  | $ | 64,825,951 |  |  | $ | 51,860,761 |
Cash dividends per share(NT$) |  | $ | 2.5 |  |  | $ | 2.5 |  |  | $ | 2.5 |  |  | $ | 2.0 |

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| d. | Others

Changes in others were as follows:

|  | Year Ended December 31, 2019
|  | Foreign Currency Translation Reserve |  | Unrealized Gain (Loss) on Financial Assets at FVTOCI |  | Gain (Loss) on Hedging Instruments |  | Unearned Stock-Based Employee Compensation |  | Total
Balance, beginning of year |  | $ | (12,042,347 | ) |  | $ | (3,429,324 | ) |  | $ | 23,601 |  |  | $ | (1,843 | ) |  | $ | (15,449,913 | )
Exchange differences arising on translation of foreign operations |  |  | (14,698,117 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (14,698,117 | )
Unrealized gain (loss) on financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity instruments |  |  | - |  |  |  | 121,740 |  |  |  | - |  |  |  | - |  |  |  | 121,740 |
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal |  |  | - |  |  |  | (162,118 | ) |  |  | - |  |  |  | - |  |  |  | (162,118 | )
Gain (loss) arising on changes in the fair value of hedging instruments |  |  | - |  |  |  | - |  |  |  | (109,592 | ) |  |  | - |  |  |  | (109,592 | )
Transferred to initial carrying amount of hedged items |  |  | - |  |  |  | - |  |  |  | 82,276 |  |  |  | - |  |  |  | 82,276 |
Share of other comprehensive income (loss) of subsidiaries and associates |  |  | (130,936 | ) |  |  | 2,767,267 |  |  |  | (105 | ) |  |  | - |  |  |  | 2,636,226 |
Share of unearned stock-based employee compensation of subsidiaries and associates |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,653 |  |  |  | 1,653 |
Income tax effect |  |  | - |  |  |  | 9,476 |  |  |  | - |  |  |  | - |  |  |  | 9,476 |
Balance, end of year |  | $ | (26,871,400 | ) |  | $ | (692,959 | ) |  | $ | (3,820 | ) |  | $ | (190 | ) |  | $ | (27,568,369 | )

|  | Year Ended December 31, 2018
|  | Foreign Currency Translation Reserve |  | Unrealized Gain (Loss) on Financial Assets at FVTOCI |  | Gain (Loss) on Hedging Instruments |  | Unearned Stock-Based Employee Compensation |  | Total
Balance, beginning of year |  | $ | (26,697,680 | ) |  | $ | (524,915 | ) |  | $ | 4,226 |  |  | $ | (10,290 | ) |  | $ | (27,228,659 | )
Exchange differences arising on translation of foreign operations |  |  | 14,578,483 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14,578,483 |
Unrealized gain (loss) on financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity instruments |  |  | - |  |  |  | (1,189,957 | ) |  |  | - |  |  |  | - |  |  |  | (1,189,957 | )
Cumulative unrealized gain (loss) of equity instruments transferred to retained earnings due to disposal |  |  | - |  |  |  | 1,193,056 |  |  |  | - |  |  |  | - |  |  |  | 1,193,056 |
Gain (loss) arising on changes in the fair value of hedging instruments |  |  | - |  |  |  | - |  |  |  | 40,975 |  |  |  | - |  |  |  | 40,975 |
Transferred to initial carrying amount of hedged items |  |  | - |  |  |  | - |  |  |  | (22,162 | ) |  |  | - |  |  |  | (22,162 | )
Share of other comprehensive income (loss) of subsidiaries and associates |  |  | 76,850 |  |  |  | (2,999,336 | ) |  |  | - |  |  |  | - |  |  |  | (2,922,486 | )
Share of unearned stock-based employee compensation of subsidiaries and associates |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 8,447 |  |  |  | 8,447 |
Income tax effect |  |  | - |  |  |  | 91,828 |  |  |  | 562 |  |  |  | - |  |  |  | 92,390 |
Balance, end of year |  | $ | (12,042,347 | ) |  | $ | (3,429,324 | ) |  | $ | 23,601 |  |  | $ | (1,843 | ) |  | $ | (15,449,913 | )

The aforementioned other equity includes the changes in other equities of the Company and the Company’s share of its subsidiaries and associates.

- 43 -

2 0. | NET REVENUE

| a. | Disaggregation of revenue from contracts with customers

|  | Years Ended December 31
Product |  | 2019 |  | 2018
Wafer |  | $ | 921,095,318 |  |  | $ | 906,992,422 |
Others |  |  | 138,551,475 |  |  |  | 116,933,291 |
|  | $ | 1,059,646,793 |  |  | $ | 1,023,925,713 |

|  | Years Ended December 31
Geography |  | 2019 |  | 2018
Taiwan |  | $ | 84,255,256 |  |  | $ | 78,260,773 |
United States |  |  | 628,365,912 |  |  |  | 626,493,249 |
China |  |  | 208,101,401 |  |  |  | 175,794,228 |
Europe, the Middle East and Africa |  |  | 67,568,157 |  |  |  | 71,068,438 |
Japan |  |  | 57,468,605 |  |  |  | 58,125,879 |
Others |  |  | 13,887,462 |  |  |  | 14,183,146 |
|  | $ | 1,059,646,793 |  |  | $ | 1,023,925,713 |

The Company categorized the net revenue mainly based on the countries where the customers are headquartered.

|  | Years Ended December 31
Platform |  | 2019 |  | 2018
Smartphone |  | $ | 518,553,492 |  |  | $ | 462,957,802 |
High Performance Computing |  |  | 312,770,702 |  |  |  | 339,165,302 |
Internet of Things |  |  | 85,508,427 |  |  |  | 64,622,380 |
Automotive |  |  | 47,451,547 |  |  |  | 51,477,572 |
Digital Consumer Electronics |  |  | 53,214,200 |  |  |  | 58,168,903 |
Others |  |  | 42,148,425 |  |  |  | 47,533,754 |
|  | $ | 1,059,646,793 |  |  | $ | 1,023,925,713 |

|  | Years Ended December 31
Resolution |  | 2019 |  | 2018
7-nanometer |  | $ | 245,690,772 |  |  | $ | 81,146,571 |
10-nanometer |  |  | 22,860,307 |  |  |  | 96,600,008 |
16-nanometer |  |  | 191,214,471 |  |  |  | 186,415,724 |
20-nanometer |  |  | 9,357,161 |  |  |  | 23,412,787 |
28-nanometer |  |  | 147,286,987 |  |  |  | 177,484,309 |
40/45-nanometer |  |  | 92,227,266 |  |  |  | 101,481,881 |
65-nanometer |  |  | 68,263,047 |  |  |  | 75,734,952 |
90-nanometer |  |  | 25,296,617 |  |  |  | 36,543,823 |
0.11/0.13 micron |  |  | 22,639,549 |  |  |  | 20,638,247 |
0.15/0.18 micron |  |  | 76,565,220 |  |  |  | 80,886,264 |
0.25 micron and above |  |  | 19,693,921 |  |  |  | 26,647,856 |
Wafer revenue |  | $ | 921,095,318 |  |  | $ | 906,992,422 |

- 44 -

Starting the first quarter of 2019, the Company reported its net revenue breakdown by platform, instead of by application. The Company believes this change better represents the Company’s results.

| b. | Contract balances

|  | December 31, 2019 |  | December 31, 2018 |  | January 1, 2018
Contract liabilities (classified under accrued expenses and other current liabilities) |  | $ | 4,095,915 |  |  | $ | 2,740,649 |  |  | $ | 31,078,331 |

The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer’s payment.

The Company recognized revenue from the beginning balance of contract liability, which amounted to NT$2,192,221 thousand and NT$30,742,181 thousand for the years ended December 31, 2019 and 2018, respectively.

| c. | Refund liabilities

Estimated sales returns and other allowances is made and adjusted based on historical experience and the consideration of varying contractual terms, which amounted to NT$33,893,735 thousand and NT$53,382,673 thousand for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the aforementioned refund liabilities amounted to NT$17,673,937 thousand and NT$21,199,032 thousand (classified under accrued expenses and other current liabilities), respectively.

2 1. | OTHER OPERATING INCOME AND EXPENSES, NET

|  | Years Ended December 31
|  | 2019 |  | 2018
Loss on disposal or retirement of property, plant and equipment, net |  | $ | (582,289 | ) |  | $ | (557,598 | )
Reversal of impairment loss (impairment loss) on property, plant and equipment |  |  | 301,384 |  |  |  | (423,468 | )
Others |  |  | 129,675 |  |  |  | (687,168 | )
|  | $ | (151,230 | ) |  | $ | (1,668,234 | )

2 2. | OTHER INCOME

|  | Years Ended December 31
|  | 2019 |  | 2018
Interest income |  |  |  |
Bank deposits |  | $ | 1,998,705 |  |  | $ | 1,845,471 |
Financial assets at amortized cost |  |  | 4,172 |  |  |  | 1,731 |
|  |  | 2,002,877 |  |  |  | 1,847,202 |
Dividend income |  |  | 177,374 |  |  |  | 157,905 |
|  | $ | 2,180,251 |  |  | $ | 2,005,107 |

- 45 -

2 3. | FINANCE COSTS

|  | Years Ended December 31
|  | 2019 |  | 2018
Interest expense |  |  |  |
Bank loans |  | $ | 1,869,335 |  |  | $ | 1,417,287 |
Corporate bonds |  |  | 1,139,935 |  |  |  | 1,485,486 |
Lease liabilities |  |  | 181,390 |  |  |  | - |
Related parties |  |  | 454 |  |  |  | 681 |
Others |  |  | 495 |  |  |  | - |
|  | $ | 3,191,609 |  |  | $ | 2,903,454 |

2 4. | OTHER GAINS AND LOSSES, NET

|  | Years Ended December 31
|  | 2019 |  | 2018
Loss on financial instruments at FVTPL, net |  |  |  |
Mandatorily measured at FVTPL |  | $ | (1,361,538 | ) |  | $ | (1,498,856 | )
Gain on disposal of investments accounted for using equity method, net |  |  | 15,200 |  |  |  | - |
Other gains (losses), net |  |  | 277,765 |  |  |  | 130,530 |
|  | $ | (1,068,573 | ) |  | $ | (1,368,326 | )

2 5. | INCOME TAX

| a. | Income tax expense recognized in profit or loss

Income tax expense consisted of the following:

|  | Years Ended December 31
|  | 2019 |  | 2018
Current income tax expense |  |  |  |
Current tax expense recognized in the current year |  | $ | 44,184,422 |  |  | $ | 50,511,247 |
Income tax adjustments on prior years |  |  | 224,691 |  |  |  | (963,356 | )
Other income tax adjustments |  |  | 135,056 |  |  |  | 149,771 |
|  |  | 44,544,169 |  |  |  | 49,697,662 |
Deferred income tax benefit |  |  |  |  |  |  |  |
Effect of tax rate changes |  |  | - |  |  |  | (1,466,706 | )
The origination and reversal of temporary differences |  |  | (1,062,618 | ) |  |  | (3,163,687 | )
|  |  | (1,062,618 | ) |  |  | (4,630,393 | )
Income tax expense recognized in profit or loss |  | $ | 43,481,551 |  |  | $ | 45,067,269 |

- 46 -

A reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

|  | Years Ended December 31
|  | 2019 |  | 2018
Income before tax |  | $ | 388,745,219 |  |  | $ | 396,198,153 |
Income tax expense at the statutory rate |  | $ | 77,749,044 |  |  | $ | 79,239,631 |
Tax effect of adjusting items: |  |  |  |  |  |  |  |
Nondeductible (deductible) items in determining taxable income |  |  | (4,124,417 | ) |  |  | 2,636,232 |
Tax-exempt income |  |  | (39,808,121 | ) |  |  | (54,234,074 | )
Additional income tax under the Alternative Minimum Tax Act |  |  | 10,367,916 |  |  |  | 21,455,854 |
Additional income tax on unappropriated earnings |  |  | 5,903,794 |  |  |  | 7,420,479 |
Effect of tax rate changes on deferred income tax |  |  | - |  |  |  | (1,466,706 | )
The origination and reversal of temporary differences |  |  | (1,062,618 | ) |  |  | (3,163,687 | )
Income tax credits |  |  | (5,903,794 | ) |  |  | (6,006,875 | )
|  |  | 43,121,804 |  |  |  | 45,880,854 |
Income tax adjustments on prior years |  |  | 224,691 |  |  |  | (963,356 | )
Other income tax adjustments |  |  | 135,056 |  |  |  | 149,771 |
Income tax expense recognized in profit or loss |  | $ | 43,481,551 |  |  | $ | 45,067,269 |

Under the amendment to the R.O.C Statute of Industrial Innovation in 2019, the amounts of unappropriated earnings in 2018 and thereafter used for building or purchasing specific assets or technologies can qualify for deduction when computing the income tax on unappropriated earnings.

In 2018, the Income Tax Law in the R.O.C. was amended and, starting from 2018, the corporate income tax rate was adjusted from 17% to 20%. In addition, the tax rate for 2018 unappropriated earnings was reduced from 10% to 5%.

b.Income tax expense recognized in other comprehensive income

|  | Years Ended December 31
|  | 2019 |  | 2018
Deferred income tax benefit (expense) |  |  |  |
Related to remeasurement of defined benefit obligation |  | $ | (30,468 | ) |  | $ | 103,339 |
Related to unrealized gain/loss on investments in equity instruments at FVTOCI |  |  | 9,476 |  |  |  | 91,828 |
Related to gain/loss on cash flow hedges |  |  | - |  |  |  | 562 |
|  | $ | (20,992 | ) |  | $ | 195,729 |

- 47 -

| c. | Deferred income tax balance

The analysis of deferred income tax assets and liabilities was as follows:

|  | December 31, 2019 |  | December 31, 2018
Deferred income tax assets |  |  |  |
Temporary differences |  |  |  |
Depreciation |  | $ | 12,927,764 |  |  | $ | 11,177,890 |
Refund liability |  |  | 2,120,873 |  |  |  | 2,543,884 |
Net defined benefit liability |  |  | 1,016,248 |  |  |  | 1,084,874 |
Unrealized loss on inventories |  |  | 437,327 |  |  |  | 723,835 |
Investments in equity instruments at FVTOCI |  |  | 65,667 |  |  |  | 56,191 |
Others |  |  | 160,743 |  |  |  | - |
|  | $ | 16,728,622 |  |  | $ | 15,586,674 |
Deferred income tax liabilities |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |
Unrealized exchange gains |  | $ | (333,606 | ) |  | $ | (61,677 | )
Others |  |  | - |  |  |  | (171,607 | )
|  | $ | (333,606 | ) |  | $ | (233,284 | )

|  | Year Ended December 31, 2019
|  |  |  | Recognized in |
|  | Balance, |  |  |  | Other |
|  | Beginning of |  |  |  | Comprehensive | Balance,
|  | Year |  | Profit or Loss |  | Income | End of Year
Deferred income tax assets |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |
Depreciation |  | $ | 11,177,890 |  |  | $ | 1,749,874 |  |  | $ | - |  | $ | 12,927,764 |
Refund liability |  |  | 2,543,884 |  |  |  | (423,011 | ) |  |  | - |  |  | 2,120,873 |
Net defined benefit liability |  |  | 1,084,874 |  |  |  | (38,158 | ) |  |  | (30,468 | ) |  | 1,016,248 |
Unrealized loss on inventories |  |  | 723,835 |  |  |  | (286,508 | ) |  |  | - |  |  | 437,327 |
Investments in equity instruments at FVTOCI |  |  | 56,191 |  |  |  | - |  |  |  | 9,476 |  |  | 65,667 |
Others |  |  | - |  |  |  | 160,743 |  |  |  | - |  |  | 160,743 |
|  | $ | 15,586,674 |  |  | $ | 1,162,940 |  |  | $ | (20,992 | ) | $ | 16,728,622 |
Deferred income tax liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized exchange gains |  | $ | (61,677 | ) |  | $ | (271,929 | ) |  | $ | - |  | $ | (333,606 | )
Others |  |  | (171,607 | ) |  |  | 171,607 |  |  |  | - |  |  | - |
|  | $ | (233,284 | ) |  | $ | (100,322 | ) |  | $ | - |  | $ | (333,606 | )

- 48 -

|  | Year Ended December 31, 2018
|  |  |  | Recognized in |
|  | Balance, |  |  |  | Other |
|  | Beginning of |  |  |  | Comprehensive | Balance,
|  | Year |  | Profit or Loss |  | Income | End of Year
Deferred income tax assets |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |
Depreciation |  | $ | 7,668,535 |  |  | $ | 3,509,355 |  |  | $ | - |  | $ | 11,177,890 |
Refund liability |  |  | 1,580,979 |  |  |  | 962,905 |  |  |  | - |  |  | 2,543,884 |
Net defined benefit liability |  |  | 975,324 |  |  |  | 6,211 |  |  |  | 103,339 |  |  | 1,084,874 |
Unrealized loss on inventories |  |  | 604,635 |  |  |  | 119,200 |  |  |  | - |  |  | 723,835 |
Investments in equity instruments at FVTOCI |  |  | - |  |  |  | - |  |  |  | 56,191 |  |  | 56,191 |
|  | $ | 10,829,473 |  |  | $ | 4,597,671 |  |  | $ | 159,530 |  | $ | 15,586,674 |
Deferred income tax liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized exchange gains |  | $ | (169,480 | ) |  | $ | 107,803 |  |  | $ | - |  | $ | (61,677 | )
Investments in equity instruments at FVTOCI |  |  | (95,421 | ) |  |  | - |  |  |  | 95,421 |  |  | - |
Others |  |  | (37,304 | ) |  |  | (75,081 | ) |  |  | (59,222 | ) |  | (171,607 | )
|  | $ | (302,205 | ) |  | $ | 32,722 |  |  | $ | 36,199 |  | $ | (233,284 | )

| d. | The deductible temporary differences for which no deferred income tax assets have been recognized

As of December 31, 2019 and 2018, the aggregate deductible temporary differences for which no deferred income tax assets have been recognized amounted to NT$33,445,504 thousand and NT$20,060,918 thousand, respectively.

| e. | Unused tax-exemption information

As of December 31, 2019, the profits generated from the following projects of the Company are exempt from income tax for a five-year period:

|  | Tax-exemption Period
Construction and expansion of 2009 |  | 2018 to 2022

| f. | The information of unrecognized deferred income tax liabilities associated with investments

As of December 31, 2019 and 2018, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$131,085,673 thousand and NT$112,893,001 thousand, respectively.

| g. | Income tax examination

The tax authorities have examined income tax returns of the Company through 2017. All investment tax credit adjustments assessed by the tax authorities have been recognized accordingly.

- 49 -

2 6. | EARNINGS PER SHARE

|  | Years Ended December 31
|  | 2019 |  | 2018
Basic EPS |  | $ | 13.32 |  |  | $ | 13.54 |
Diluted EPS |  | $ | 13.32 |  |  | $ | 13.54 |

EPS is computed as follows:

|  | Amounts (Numerator) |  | Number of Shares (Denominator) (In Thousands) |  | EPS (NT$)
Year Ended December 31, 2019 |  |  |  |  |  |
Basic/Diluted EPS |  |  |  |  |  |
Net income available to common shareholders |  | $ | 345,263,668 |  |  |  | 25,930,380 |  |  | $ | 13.32 |
Year Ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Basic/Diluted EPS |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common shareholders |  | $ | 351,130,884 |  |  |  | 25,930,380 |  |  | $ | 13.54 |

27. | ADDITIONAL INFORMATION OF EXPENSES BY NATURE

|  | Years Ended December 31
|  | 2019 |  | 2018
a.Depreciation of property, plant and equipment and right-of-use assets |  |  |  |
Recognized in cost of revenue |  | $ | 243,160,463 |  |  | $ | 251,292,565 |
Recognized in operating expenses |  |  | 24,285,569 |  |  |  | 23,020,118 |
Recognized in other operating income and expenses |  |  | 18,511 |  |  |  | 27,857 |
|  | $ | 267,464,543 |  |  | $ | 274,340,540 |
b.Amortization of intangible assets |  |  |  |  |  |  |  |
Recognized in cost of revenue |  | $ | 2,971,336 |  |  | $ | 2,018,702 |
Recognized in operating expenses |  |  | 2,367,550 |  |  |  | 2,334,145 |
|  | $ | 5,338,886 |  |  | $ | 4,352,847 |
c.Research and development costs expensed as incurred |  | $ | 90,482,815 |  |  | $ | 84,944,461 |

- 50 -

|  | Years Ended December 31
|  | 2019 |  | 2018
d.Employee benefits expenses |  |  |  |
Post-employment benefits |  |  |  |
Defined contribution plans |  | $ | 2,063,508 |  |  | $ | 2,028,928 |
Defined benefit plans |  |  | 259,596 |  |  |  | 281,866 |
|  |  | 2,323,104 |  |  |  | 2,310,794 |
Other employee benefits |  |  | 94,236,265 |  |  |  | 93,694,021 |
|  | $ | 96,559,369 |  |  | $ | 96,004,815 |
Employee benefits expense summarized by function |  |  |  |  |  |  |  |
Recognized in cost of revenue |  | $ | 58,502,618 |  |  | $ | 57,733,597 |
Recognized in operating expenses |  |  | 38,056,751 |  |  |  | 38,271,218 |
|  | $ | 96,559,369 |  |  | $ | 96,004,815 |

According to the Company’s Articles of Incorporation, the Company shall allocate compensation to directors and profit sharing bonus to employees of the Company not more than 0.3% and not less than 1% of annual profits during the period, respectively.

The Company accrued profit sharing bonus to employees based on a percentage of net income before income tax, profit sharing bonus to employees and compensation to directors during the period, which amounted to NT$23,165,745 thousand and NT$23,570,040 thousand for the years ended December 31, 2019 and 2018, respectively; compensation to directors was expensed based on estimated amount payable. If there is a change in the proposed amounts after the annual parent company only financial statements are authorized for issue, the differences are recorded as a change in accounting estimate.

The Company’s profit sharing bonus to employees and compensation to directors in the amounts of NT$23,165,745 thousand and NT$360,404, thousand in cash for 2019, respectively, profit sharing bonus to employees and compensation to directors in the amounts of NT$23,570,040 thousand and NT$349,272 thousand in cash for 2018, respectively, and profit sharing bonus to employees and compensation to directors in the amounts of NT$23,019,082 thousand and NT$368,919 thousand in cash for 2017, respectively, had been approved by the Board of Directors of the Company held on February 11, 2020, February 19, 2019 and February 13, 2018, respectively. There is no significant difference between the aforementioned approved amounts and the amounts charged against earnings of 2019, 2018 and 2017, respectively.

The information about the appropriations of the Company’s profit sharing bonus to employees and compensation to directors is available at the Market Observation Post System website.

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28.CASH FLOW INFORMATION

| a. | Non-cash transactions

|  | Years Ended December 31
|  | 2019 |  | 2018
Additions of property, plant and equipment |  | $ | 555,377,864 |  |  | $ | 287,670,276 |
Exchange of assets |  |  | (3,287,138 | ) |  |  | - |
Changes in payables to contractors and equipment suppliers |  |  | (101,720,581 | ) |  |  | 10,406,719 |
Transferred to initial carrying amount of hedged items |  |  | (82,276 | ) |  |  | 22,162 |
Payments for acquisition of property, plant and equipment |  | $ | 450,287,869 |  |  | $ | 298,099,157 |

|  | Years Ended December 31
|  | 2019 |  | 2018
Disposal of property, plant and equipment |  | $ | 1,286,373 |  |  | $ | 3,039,237 |
Changes in other receivables from related parties |  |  | (175,900 | ) |  |  | 1,692,416 |
Changes in other financial assets |  |  | 7,865 |  |  |  | (24,535 | )
Proceeds from disposal of property, plant and equipment |  | $ | 1,118,338 |  |  | $ | 4,707,118 |

| b. | Reconciliation of liabilities arising from financing activities

|  |  |  |  |  | Non-cash changes |  |
|  | Balance as of January 1, 2019 |  | Financing Cash Flow |  | Foreign Exchange Movement |  | Leases Modifications |  | Other Changes (Note) |  | Balance as of December 31, 2019
Short-term loans |  | $ | 91,982,340 |  |  | $ | 59,615,602 |  |  | $ | (3,087,652 | ) |  | $ | - |  |  | $ | - |  |  | $ | 148,510,290 |
Guarantee deposits |  |  | 9,494,648 |  |  |  | 19,002 |  |  |  | 1,674 |  |  |  | - |  |  |  | (7,824,572 | ) |  |  | 1,690,752 |
Lease liabilities |  |  | 17,758,578 |  |  |  | (2,811,698 | ) |  |  | (17,489 | ) |  |  | 33,038 |  |  |  | 181,390 |  |  |  | 15,143,819 |
Bonds payable |  |  | 91,800,000 |  |  |  | (34,900,000 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 56,900,000 |
Total |  | $ | 211,035,566 |  |  | $ | 21,922,906 |  |  | $ | (3,103,467 | ) |  | $ | 33,038 |  |  | $ | (7,643,182 | ) |  | $ | 222,244,861 |

|  |  |  |  |  | Non-cash changes |  |
|  | Balance as of January 1, 2018 |  | Financing Cash Flow |  | Foreign Exchange Movement |  | Other Changes (Note) |  | Balance as of December 31, 2018
Short-term loans |  | $ | 63,766,850 |  |  | $ | 27,154,770 |  |  | $ | 1,060,720 |  |  | $ | - |  |  | $ | 91,982,340 |
Guarantee deposits |  |  | 13,629,122 |  |  |  | 1,504,809 |  |  |  | 396,617 |  |  |  | (6,035,900 | ) |  |  | 9,494,648 |
Bonds payable |  |  | 116,100,000 |  |  |  | (24,300,000 | ) |  |  | - |  |  |  | - |  |  |  | 91,800,000 |
Total |  | $ | 193,495,972 |  |  | $ | 4,359,579 |  |  | $ | 1,457,337 |  |  | $ | (6,035,900 | ) |  | $ | 193,276,988 |

| N ote: | Other changes include guarantee deposits refunded to customers by offsetting related accounts receivable and financial cost of lease liabilities.

29. | CAPITAL MANAGEMENT

The Company requires significant amounts of capital to build and expand its production facilities and acquire additional equipment. In consideration of the industry dynamics, the Company manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, capital asset purchases, research and development activities, dividend payments, debt service requirements and other business requirements associated with its existing operations over the next 12 months.

- 52 -

3 0.FINANCIAL INSTRUMENTS

| a. | Categories of financial instruments

|  | December 31, 2019 |  | December 31, 2018
Financial assets |  |  |  |
FVTPL (Note 1) |  | $ | 27,481 |  |  | $ | 54,115 |
FVTOCI (Note 2) |  |  | 4,132,975 |  |  |  | 5,126,829 |
Hedging financial assets |  |  | 3,504 |  |  |  | 23,497 |
Amortized cost (Note 3) |  |  | 272,886,863 |  |  |  | 365,119,060 |
|  | $ | 277,050,823 |  |  | $ | 370,323,501 |
Financial liabilities |  |  |  |  |  |  |  |
FVTPL (Note 4) |  | $ | 982,302 |  |  | $ | 30,232 |
Hedging financial liabilities |  |  | 1,798 |  |  |  | 1,941 |
Amortized cost (Note 5) |  |  | 553,905,061 |  |  |  | 310,265,696 |
|  | $ | 554,889,161 |  |  | $ | 310,297,869 |

| Note 1: | Financial assets mandatorily measured at FVTPL.

| Note 2: | Including notes and accounts receivable (net) and equity investments.

| Note 3: | Including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (including related parties), other receivables and refundable deposits.

| Note 4: | Held for trading.

| Note 5: | Including short-term loans, accounts payable (including related parties), payables to contractors and equipment suppliers, cash dividends payable, accrued expenses and other current liabilities, bonds payable and guarantee deposits.

| b. | Financial risk management objectives

The Company seeks to ensure that sufficient cost-efficient funding is readily available when needed. The Company manages its exposure to foreign currency risk, interest rate risk, equity price risk, credit risk and liquidity risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

The plans for material treasury activities are reviewed by Audit Committees and/or Board of Directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the corporate treasury function must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

| c. | Market risk

The Company is exposed to the financial market risks, primarily changes in foreign currency exchange rates, interest rates and equity investment prices. A portion of these risks is hedged.

- 53 -

Foreign currency risk

The majority of the Company’s revenue is denominated in U.S. dollar and over one-half of its capital expenditures are denominated in currencies other than NT dollar, primarily in U.S. dollar, Japanese yen and Euro. As a result, any significant fluctuations to its disadvantage in exchanges rate of NT dollar against such currencies, in particular a weakening of U.S. dollar against NT dollar, would have an adverse impact on the revenue and operating profit as expressed in NT dollar. The Company uses foreign currency derivative contracts, such as currency forwards or currency swaps, to protect against currency exchange rate risks associated with non-NT dollar-denominated assets and liabilities and certain forecasted transactions. The Company utilizes U.S. dollar denominated debt to partially offset currency risk arising from U.S. dollar denominated receivables for balance sheet hedges. These hedges reduce, but do not entirely eliminate, the financial impact on the Company caused by the effect of foreign currency exchange rate movements on the assets and liabilities.

Based on a sensitivity analysis performed on the Company’s total monetary assets and liabilities for the years ended December 31, 2019 and 2018, a hypothetical adverse foreign currency exchange rate change of 10% would have decreased its net income by NT$2,112,450 thousand and NT$489,326 thousand, respectively, and decreased its other comprehensive income by NT$107,690 thousand and NT$315,571 thousand, respectively, after taking into account hedges and offsetting positions.

Interest rate risk

The Company is exposed to interest rate risks primarily related to its bank deposits and bank loans. Changes in interest rates affect the interest earned on the Company’s bank deposits, as well as the interest paid on its bank loans. Because all of the Company’s bonds issued are fixed-rate and measured at amortized cost, changes in interest rates would not affect the cash flows and the fair value.

Other price risk

The Company is exposed to equity price risk arising from financial assets at FVTOCI.

Assuming a hypothetical decrease of 10% in prices of the equity investments at the end of the reporting period for the years ended December 31, 2019 and 2018, the other comprehensive income would have decreased by NT$77,156 thousand and NT$130,193 thousand, respectively.

| d. | Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Company. The Company is exposed to credit risks from operating activities, primarily trade receivables, and from investing activities, primarily deposits, fixed-income investments and other financial instruments with banks. Credit risk is managed separately for business related and financial related exposures. As of the end of the reporting period, the Company’s maximum credit risk exposure is equal to the carrying amount of financial assets.

Business related credit risk

The Company’s trade receivables are from its customers worldwide. The majority of the Company’s outstanding trade receivables are not covered by collaterals or guarantees. While the Company has procedures to monitor and manage credit risk exposure on trade receivables, there is no assurance such procedures will effectively eliminate losses resulting from its credit risk. This risk is heightened during periods when economic conditions worsen.

As of December 31, 2019 and 2018, the Company’s ten largest customers accounted for 83% and 76% of accounts receivable, respectively. The Company considers the concentration of credit risk for the remaining accounts receivable not material.

- 54 -

Financial credit risk

The Company mitigates its financial credit risk by selecting counterparties with investment-grade credit ratings and by limiting the exposure to any individual counterparty. The Company regularly monitors and reviews the limit applied to counterparties and adjusts the limit according to market conditions and the credit standing of the counterparties.

The risk management of expected credit loss for financial assets at amortized cost is as follows:

The Company only invests in debt instruments that are rated as investment grade or higher. The credit rating information is supplied by external rating agencies. The Company assesses whether there has been a significant increase in credit risk since initial recognition by reviewing changes in external credit ratings, financial market conditions and material information of the bond issuers.

The Company assesses the 12-month expected credit loss and lifetime expected credit loss based on the probability of default and loss given default provided by external credit rating agencies. The current credit risk assessment policies are as follows:

Category |  | Description |  | Basis for Recognizing Expected Credit Loss |  | Expected Credit Loss Ratio
Performing |  | Credit rating on trade date and valuation date: (1) Within investment grade (2) Between BB+ and BB- |  | 12 months expected credit loss |  |  | 0% |
Doubtful |  | Credit rating on trade date and valuation date: (1) From investment grade to non-investment grade (2) From BB+~BB- to B+~CCC- |  | Lifetime expected credit loss-not credit impaired |  |  | - |
In default |  | Credit rating CC or below |  | Lifetime expected credit loss-credit impaired |  |  | - |
Write-off |  | There is evidence indicating that the debtor is in severe financial difficulty and the Company has no realistic prospect of recovery |  | Amount is written off |  |  | - |

For the years ended December 31, 2019 and 2018, no expected credit loss was recognized.

| e. | Liquidity risk management

The objective of liquidity risk management is to ensure the Company has sufficient liquidity to fund its business operations over the next 12 months. The Company manages its liquidity risk by maintaining adequate cash and cash equivalent.

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The table below summari z es the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments, in cluding principal and interest.

|  | Less Than 1 Year |  | 1-3 Years |  | 3-5 Years |  | More Than 5 Years |  | Total
December 31, 2019 |  |  |  |  |  |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |
Short-term loans |  | $ | 148,550,641 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 148,550,641 |
Accounts payable (including related parties) |  |  | 41,745,770 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 41,745,770 |
Payables to contractors and equipment suppliers |  |  | 139,754,491 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 139,754,491 |
Accrued expenses and other current liabilities |  |  | 35,651,856 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35,651,856 |
Bonds payable |  |  | 32,338,853 |  |  |  | 7,777,715 |  |  |  | 18,203,601 |  |  |  | - |  |  |  | 58,320,169 |
Lease liabilities (including those classified under accrued expenses and other current liabilities) |  |  | 1,976,891 |  |  |  | 2,170,171 |  |  |  | 2,063,855 |  |  |  | 9,981,523 |  |  |  | 16,192,440 |
Guarantee deposits (including those classified under accrued expenses and other current liabilities) |  |  | 1,520,306 |  |  |  | 114,945 |  |  |  | 55,501 |  |  |  | - |  |  |  | 1,690,752 |
|  |  | 401,538,808 |  |  |  | 10,062,831 |  |  |  | 20,322,957 |  |  |  | 9,981,523 |  |  |  | 441,906,119 |
Derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outflows |  |  | 125,580,851 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 125,580,851 |
Inflows |  |  | (125,114,784 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (125,114,784 | )
|  |  | 466,067 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 466,067 |
|  | $ | 402,004,875 |  |  | $ | 10,062,831 |  |  | $ | 20,322,957 |  |  | $ | 9,981,523 |  |  | $ | 442,372,186 |

Additional information about the maturity analysis for lease liabilities:

|  | Less than 5 Years |  | 5-10 Years |  | 10-15 Years |  | 15-20 Years |  | More Than 20 Years
Lease liabilities |  | $ | 6,210,917 |  |  | $ | 4,679,991 |  |  | $ | 3,626,190 |  |  | $ | 1,600,962 |  |  | $ | 74,380 |

|  | Less Than 1 Year |  | 1-3 Years |  | 3-5 Years |  | More Than 5 Years |  | Total
December 31, 2018 |  |  |  |  |  |  |  |  |  |
Non-derivative financial liabilities |  |  |  |  |  |  |  |  |  |
Short-term loans |  | $ | 92,039,118 |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 92,039,118 |
Accounts payable (including related parties) |  |  | 35,019,044 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35,019,044 |
Payables to contractors and equipment suppliers |  |  | 41,279,910 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 41,279,910 |
Accrued expenses and other current liabilities |  |  | 40,888,712 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 40,888,712 |
Bonds payable |  |  | 36,039,935 |  |  |  | 35,340,742 |  |  |  | 22,979,426 |  |  |  | - |  |  |  | 94,360,103 |
Guarantee deposits (including those classified under accrued expenses and other current liabilities) |  |  | 6,148,000 |  |  |  | 2,884,933 |  |  |  | 461,715 |  |  |  | - |  |  |  | 9,494,648 |
|  |  | 251,414,719 |  |  |  | 38,225,675 |  |  |  | 23,441,141 |  |  |  | - |  |  |  | 313,081,535 |
Derivative financial instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outflows |  |  | 35,608,273 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 35,608,273 |
Inflows |  |  | (35,681,524 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (35,681,524 | )
|  |  | (73,251 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (73,251 | )
|  | $ | 251,341,468 |  |  | $ | 38,225,675 |  |  | $ | 23,441,141 |  |  | $ | - |  |  | $ | 313,008,284 |

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| f. | Fair value of financial instruments

| 1) | Fair value measurements recognized in the parent company only balance sheets

Fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

| ● | Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

| ● | Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

| ● | Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

| 2) | Fair value of financial instruments that are measured at fair value on a recurring basis

Fair value hierarchy

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis:

|  | December 31, 2019
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets at FVTPL |  |  |  |  |  |  |  |
Mandatorily measured at FVTPL |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 27,481 |  |  | $ | - |  |  | $ | 27,481 |
Financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in equity instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-publicly traded equity investments |  | $ | - |  |  | $ | - |  |  | $ | 877,110 |  |  | $ | 877,110 |
Notes and accounts receivable, net |  |  | - |  |  |  | 3,255,865 |  |  |  | - |  |  |  | 3,255,865 |
|  | $ | - |  |  | $ | 3,255,865 |  |  | $ | 877,110 |  |  | $ | 4,132,975 |
Hedging financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 3,504 |  |  | $ | - |  |  | $ | 3,504 |
Financial liabilities at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held for trading |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 982,302 |  |  | $ | - |  |  | $ | 982,302 |
Hedging financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 1,798 |  |  | $ | - |  |  | $ | 1,798 |

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|  | December 31, 2018
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial assets at FVTPL |  |  |  |  |  |  |  |
Mandatorily measured at FVTPL |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 54,115 |  |  | $ | - |  |  | $ | 54,115 |
Financial assets at FVTOCI |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in equity instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-publicly traded equity investments |  | $ | - |  |  | $ | - |  |  | $ | 963,610 |  |  | $ | 963,610 |
Publicly traded stocks |  |  | 568,150 |  |  |  | - |  |  |  | - |  |  |  | 568,150 |
Notes and accounts receivable, net |  |  | - |  |  |  | 3,595,069 |  |  |  | - |  |  |  | 3,595,069 |
|  | $ | 568,150 |  |  | $ | 3,595,069 |  |  | $ | 963,610 |  |  | $ | 5,126,829 |
Hedging financial assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 23,497 |  |  | $ | - |  |  | $ | 23,497 |
Financial liabilities at FVTPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held for trading |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 30,232 |  |  | $ | - |  |  | $ | 30,232 |
Hedging financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Forward exchange contracts |  | $ | - |  |  | $ | 1,941 |  |  | $ | - |  |  | $ | 1,941 |

Reconciliation of Level 3 fair value measurements of financial assets

The financial assets measured at Level 3 fair value were equity investments classified as financial assets at FVTOCI. Reconciliations for the years ended December 31, 2019 and 2018 were as follows:

|  | Years Ended December 31
|  | 2019 |  | 2018
Balance, beginning of year |  | $ | 963,610 |  |  | $ | 983,590 |
Recognized in other comprehensive income |  |  | (85,393 | ) |  |  | (16,524 | )
Disposals and proceeds from return of capital of investments |  |  | (1,107 | ) |  |  | (3,456 | )
Balance, end of year |  | $ | 877,110 |  |  | $ | 963,610 |

Valuation techniques and assumptions used in Level 2 fair value measurement

The fair values of financial assets and financial liabilities are determined as follows:

| ● | Forward exchange contracts are measured using forward exchange rates and the discounted curves that are derived from quoted market prices.

| ● | The fair value of accounts receivables classified as at FVTOCI are determined by the present value of future cash flows based on the discount rate that reflects the credit risk of counterparties.

- 58 -

Valuation techniques and assumpti ons used in Level 3 fair value m easurement

The fair values of non-publicly traded equity investments are mainly determined by using the asset approach and market approach.

The asset approach takes into account the net asset value measured at the fair value by independent parties.

The market approach takes into account the recent financing activities of investees, the market transaction prices of the similar companies and market conditions.

| 3) | Fair value of financial instruments that are not measured at fair value

Except as detailed in the following table, the Company considers that the carrying amounts of financial instruments in the parent company only financial statements that are not measured at fair value approximate their fair values.

Fair value hierarchy

The table below sets out the fair value hierarchy for the Company’s assets and liabilities which are not required to measure at fair value:

|  | December 31, 2019
|  | Carrying |  | Level 2
|  | Amount |  | Fair Value
Financial liabilities |  |  |  |
Financial liabilities at amortized costs |  |  |  |
Bonds payable |  | $ | 56,900,000 |  |  | $ | 57,739,115 |

|  | December 31, 2018
|  | Carrying |  | Level 2
|  | Amount |  | Fair Value
Financial assets |  |  |  |
Financial assets at amortized costs |  |  |  |
Commercial paper |  | $ | 2,294,098 |  |  | $ | 2,296,188 |
Financial liabilities |  |  |  |  |  |  |  |
Financial liabilities at amortized costs |  |  |  |  |  |  |  |
Bonds payable |  | $ | 91,800,000 |  |  | $ | 93,171,255 |

Valuation techniques and assumptions used in Level 2 fair value measurement

The fair value of commercial paper is determined by the present value of future cash flows based on the discounted curves that are derived from the quoted market prices.

The fair value of the Company’s bonds payable is determined by quoted market prices provided by third party pricing services.

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3 1. | RELATED PARTY TRANSACTIONS

The significant transactions between the Company and its related parties, other than those disclosed in other notes, are summarized as follows:

| a. | Related party name and categories

Related Party Name |  | Related Party Categories
TSMC Global |  | Subsidiaries
TSMC China |  | Subsidiaries
TSMC Nanjing |  | Subsidiaries
VisEra Tech |  | Subsidiaries
TSMC North America |  | Subsidiaries
TSMC Europe |  | Subsidiaries
TSMC Japan |  | Subsidiaries
TSMC Korea |  | Subsidiaries
TSMC Solar Europe GmbH |  | Subsidiaries
TSMC Design Technology Canada Inc. (TSMC Canada) |  | Indirect Subsidiaries
TSMC Technology, Inc. (TSMC Technology) |  | Indirect Subsidiaries
WaferTech, LLC (WaferTech) |  | Indirect Subsidiaries
GUC |  | Associates
VIS |  | Associates
SSMC |  | Associates
Xintec |  | Associates
TSMC Education and Culture Foundation |  | Other related parties
TSMC Charity Foundation |  | Other related parties

| b. | Net revenue

|  |  |  | Years Ended December 31
|  |  |  | 2019 |  | 2018
Item |  | Related Party Name/Categories |  |  |  |
Net revenue from sale of goods |  | TSMC North America |  | $ | 636,441,507 |  |  | $ | 650,432,820 |
|  | Associates |  |  | 4,052,853 |  |  |  | 6,762,827 |
|  | Other subsidiaries |  |  | 149,560 |  |  |  | 150,407 |
|  | Other related parties |  |  | - |  |  |  | 330 |
|  |  |  | $ | 640,643,920 |  |  | $ | 657,346,384 |
Net revenue from royalties |  | Associates |  | $ | 183,583 |  |  | $ | 362,259 |
|  | Subsidiaries |  |  | 64,710 |  |  |  | 568 |
|  |  |  | $ | 248,293 |  |  | $ | 362,827 |

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| c. | Purchases

|  | Years Ended December 31
|  | 2019 |  | 2018
Related Party Categories |  |  |  |
Subsidiaries |  | $ | 40,419,311 |  |  | $ | 34,136,678 |
Associates |  |  | 6,301,417 |  |  |  | 8,809,394 |
|  | $ | 46,720,728 |  |  | $ | 42,946,072 |

| d. | Receivables from related parties

|  |  |  | December 31, 2019 |  | December 31, 2018
Item |  | Related Party Name/Categories |  |  |  |
Receivables from related |  | TSMC North America |  | $ | 81,732,281 |  |  | $ | 86,057,097 |
parties |  | Associates |  |  | 458,292 |  |  |  | 375,184 |
|  | Other subsidiaries |  |  | 3,928 |  |  |  | 20,303 |
|  |  |  | $ | 82,194,501 |  |  | $ | 86,452,584 |
Other receivables from related |  | TSMC North America |  | $ | 802,726 |  |  | $ | 1,035,465 |
parties |  | TSMC Nanjing |  |  | 101,559 |  |  |  | 89,334 |
|  | Associates |  |  | 50,450 |  |  |  | 64,203 |
|  | Other subsidiaries |  |  | 13,388 |  |  |  | 45,660 |
|  |  |  | $ | 968,123 |  |  | $ | 1,234,662 |

| e. | Payables to related parties

|  |  |  | December 31, 2019 |  | December 31, 2018
Item |  | Related Party Name/Categories |  |  |  |
Payables to related parties |  | TSMC China |  | $ | 1,538,971 |  |  | $ | 1,299,072 |
|  | TSMC Nanjing |  |  | 1,266,002 |  |  |  | 414,401 |
|  | WaferTech |  |  | 1,097,625 |  |  |  | 1,092,785 |
|  | Xintec |  |  | 736,747 |  |  |  | 649,812 |
|  | SSMC |  |  | 487,944 |  |  |  | 362,564 |
|  | VIS |  |  | 153,977 |  |  |  | 357,080 |
|  | Other subsidiaries |  |  | 379,250 |  |  |  | 363,995 |
|  | Other associates |  |  | 41,119 |  |  |  | 7,043 |
|  | Other related parties |  |  | 15,000 |  |  |  | - |
|  |  |  | $ | 5,716,635 |  |  | $ | 4,546,752 |

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| f. | Accrued expenses and other current liabilities

|  |  |  | December 31, 2019 |  | December 31, 2018
Item |  | Related Party Name/Categories |  |  |  |
Accrued expenses and other |  | TSMC Nanjing |  | $ | - |  |  | $ | 199,638 |
current liabilities |  | Other subsidiaries |  |  | 2,722 |  |  |  | 681 |
|  |  |  | $ | 2,722 |  |  | $ | 200,319 |

| g. | Disposal of property, plant and equipment

|  | Proceeds
|  | Years Ended December 31
|  | 2019 |  | 2018
Related Party Name/Categories |  |  |  |
TSMC Nanjing |  | $ | 1,096,516 |  |  | $ | 2,839,622 |
Other subsidiaries |  |  | 44,095 |  |  |  | 25,380 |
|  | $ | 1,140,611 |  |  | $ | 2,865,002 |

|  | Gains
|  | Years Ended December 31
|  | 2019 |  | 2018
Related Party Name/Categories |  |  |  |
TSMC Nanjing |  | $ | 332,955 |  |  | $ | 386,239 |
Other subsidiaries |  |  | 67,151 |  |  |  | 64,964 |
|  | $ | 400,106 |  |  | $ | 451,203 |

|  | Deferred Gains (Losses) from Disposal of Property, Plant and Equipment
|  | December 31, 2019 |  | December 31, 2018
Related Party Name/Categories |  |  |  |
TSMC Nanjing |  | $ | (30,731 | ) |  | $ | 234,810 |
Other subsidiaries |  |  | 129,915 |  |  |  | 152,970 |
|  | $ | 99,184 |  |  | $ | 387,780 |

- 62 -

| h. | Others

|  |  |  | Years Ended December 31
|  |  |  | 2019 |  | 2018
Item |  | Related Party Name/Categories |  |  |  |
Manufacturing expenses |  | Associates |  | $ | 2,816,089 |  |  | $ | 2,876,216 |
|  | Subsidiaries |  |  | 35,825 |  |  |  | 35,603 |
|  |  |  | $ | 2,851,914 |  |  | $ | 2,911,819 |
Research and development |  | Subsidiaries |  | $ | 2,821,204 |  |  | $ | 2,407,068 |
expenses |  | Associates |  |  | 163,425 |  |  |  | 83,145 |
|  |  |  | $ | 2,984,629 |  |  | $ | 2,490,213 |
Marketing expenses - |  | TSMC Europe |  | $ | 439,147 |  |  | $ | 463,093 |
commission |  | Other subsidiaries |  |  | 419,920 |  |  |  | 402,973 |
|  |  |  | $ | 859,067 |  |  | $ | 866,066 |
General and administrative |  | Other related parties |  | $ | 120,000 |  |  | $ | 120,756 |
expenses |  | Subsidiaries |  |  | 3,423 |  |  |  | 3,426 |
|  |  |  | $ | 123,423 |  |  | $ | 124,182 |

The sales prices and payment terms to related parties were not significantly different from those of sales to third parties. For other related party transactions, price and terms were determined in accordance with mutual agreements.

The Company leased factory and office from associates. The lease terms and prices were both determined in accordance with mutual agreements. The rental expenses were paid to associates monthly; the related expenses were both classified under manufacturing expenses.

The Company deferred the disposal gain or loss derived from sales of property, plant and equipment to related parties using equity method, and then recognized such gain or loss over the depreciable lives of the disposed assets.

| i. | Compensation of key management personnel

The compensation to directors and other key management personnel for the years ended December 31, 2019 and 2018 were as follows:

|  | Years Ended December 31
|  | 2019 |  | 2018
Short-term employee benefits |  | $ | 1,822,806 |  |  | $ | 1,906,266 |
Post-employment benefits |  |  | 2,330 |  |  |  | 3,041 |
|  | $ | 1,825,136 |  |  | $ | 1,909,307 |

The compensation to directors and other key management personnel were determined by the Compensation Committee of the Company in accordance with the individual performance and the market trends.

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3 2. | SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

Significant contingent liabilities and unrecognized commitments of the Company as of the end of the reporting period, excluding those disclosed in other notes, were as follows:

| a. | Under a technical cooperation agreement with Industrial Technology Research Institute, the R.O.C. Government or its designee approved by the Company can use up to 35% of the Company’s capacity provided the Company’s outstanding commitments to its customers are not prejudiced. The term of this agreement is for five years beginning from January 1, 1987 and is automatically renewed for successive periods of five years unless otherwise terminated by either party with one year prior notice. As of December 31, 2019, the R.O.C. Government did not invoke such right.

| b. | Under a Shareholders Agreement entered into with Philips and EDB Investments Pte Ltd. on March 30, 1999, the parties formed a joint venture company, SSMC, which is an integrated circuit foundry in Singapore. The Company’s equity interest in SSMC was 32%. Nevertheless, in September 2006, Philips spun-off its semiconductor subsidiary which was renamed as NXP B.V. Further, the Company and NXP B.V. purchased all the SSMC shares owned by EDB Investments Pte Ltd. pro rata according to the Shareholders Agreement on November 15, 2006. After the purchase, the Company and NXP B.V. currently own approximately 39% and 61% of the SSMC shares, respectively. The Company and NXP B.V. are required, in the aggregate, to purchase at least 70% of SSMC’s capacity, but the Company alone is not required to purchase more than 28% of the capacity. If any party defaults on the commitment and the capacity utilization of SSMC falls below a specific percentage of its capacity, the defaulting party is required to compensate SSMC for all related unavoidable costs. There was no default from the aforementioned commitment as of December 31, 2019.

| c. | In February 2019, Innovative Foundry Technologies LLC (“IFT”) filed a complaint in the U.S. District Court for the District of Delaware alleging that the Company and TSMC Technology Inc. infringe five U.S. patents. IFT also filed a complaint in the U.S. International Trade Commission (the “ITC”) alleging that the Company, TSMC North America, TSMC Technology Inc., and other companies infringe the same patents. The ITC instituted an investigation in March 2019. Both parties agreed to end the dispute and the ITC terminated the investigation in October 2019. The pending litigation in the U.S. District Court for the District of Delaware was dismissed at the same time.

| d. | On September 28, 2017, the Company was contacted by the European Commission (the “Commission”), which has asked us for information and documents concerning alleged anti-competitive practices in relation to semiconductor sales. We are cooperating with the Commission to provide the requested information and documents. In light of the fact that this proceeding is still in its preliminary stage, it is premature to predict how the case will proceed, the outcome of the proceeding or its impact.

| e. | The Company entered into long-term purchase agreements of material with multiple suppliers. The relative minimum purchase quantity and price are specified in the agreements.

| f. | The Company entered into a long-term purchase agreement of equipment. The relative purchase quantity and price are specified in the agreement.

| g. | The Company entered into long-term energy purchase agreements with multiple suppliers. The relative purchase period, quantity and price are specified in the agreements.

| h. | As of December 31, 2019, the Company provided endorsement guarantees of NT$2,495,400 thousand to its subsidiary, TSMC North America, in respect of providing endorsement guarantees for office leasing contract.

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3 3. | EXCHANGE RATE INFORMATION OF FOREIGN-CURRENCY FINANCIAL ASSETS AND LIABILITIES

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

|  | Foreign Currencies (In Thousands) |  | Exchange Rate (Note) |  | Carrying Amount (In Thousands)
December 31, 2019 |  |  |  |  |  |
Financial assets |  |  |  |  |  |
Monetary items |  |  |  |  |  |
USD |  | $ | 4,515,031 |  |  |  | 29.988 |  |  | $ | 135,396,753 |
EUR |  |  | 2,867 |  |  |  | 33.653 |  |  |  | 96,495 |
JPY |  |  | 71,980,350 |  |  |  | 0.2751 |  |  |  | 19,801,794 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Monetary items |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 5,874,701 |  |  |  | 29.988 |  |  |  | 176,170,537 |
EUR |  |  | 2,550,377 |  |  |  | 33.653 |  |  |  | 85,827,831 |
JPY |  |  | 100,338,589 |  |  |  | 0.2751 |  |  |  | 27,603,146 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |  |  |  |  |  |
Monetary items |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 4,527,578 |  |  |  | 30.740 |  |  |  | 139,177,748 |
EUR |  |  | 2,171 |  |  |  | 35.22 |  |  |  | 76,462 |
JPY |  |  | 235,512 |  |  |  | 0.2783 |  |  |  | 65,543 |
Non-monetary items |  |  |  |  |  |  |  |  |  |  |  |
HKD |  |  | 144,567 |  |  |  | 3.93 |  |  |  | 568,150 |
Financial liabilities |  |  |  |  |  |  |  |  |  |  |  |
Monetary items |  |  |  |  |  |  |  |  |  |  |  |
USD |  |  | 4,147,398 |  |  |  | 30.740 |  |  |  | 127,491,021 |
EUR |  |  | 471,127 |  |  |  | 35.22 |  |  |  | 16,593,099 |
JPY |  |  | 33,416,236 |  |  |  | 0.2783 |  |  |  | 9,299,738 |

| Note: | Exchange rate represents the number of N.T. dollars for which one foreign currency could be exchanged.

Please refer to the parent company only statements of comprehensive income for the total of realized and unrealized foreign exchange gain and loss for the years ended December 31, 2019 and 2018, respectively. Since there were varieties of foreign currency transactions of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.

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3 4. | SIGNIFICANT OPERATION LOSSES

On January 19, 2019, the Company discovered a wafer contamination issue in a fab in Taiwan caused by a batch of unqualified photoresist materials. After investigation, the Company immediately stopped using the unqualified materials. An estimated loss of NT$3,400,000 thousand related to this event was recognized in cost of revenue for the three months ended March 31, 2019.

The Company experienced a computer virus outbreak on August 3, 2018, which affected a number of computer systems and fab tools, and consequently impacted wafer production in Taiwan. All the impacted tools have been recovered by August 6, 2018. The Company recognized a loss of NT$2,596,046 thousand related to this incident for the three months ended September 30, 2018, which was included in cost of revenue.

3 5. | ADDITIONAL DISCLOSURES

Following are the additional disclosures required by the Securities and Futures Bureau for the Company:

| a. | Financings provided: Please see Table 1 attached;

| b. | Endorsement/guarantee provided: Please see Table 2 attached;

| c. | Marketable securities held (excluding investments in subsidiaries and associates): Please see Table 3 attached;

| d. | Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: Please see Table 4 attached;

| e. | Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: Please see Table 5 attached;

| f. | Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None;

| g. | Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Please see Table 6 attached;

| h. | Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please see Table 7 attached;

| i. | Information about the derivative financial instruments transaction: Please see Notes 7 and 8;

| j. | Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in mainland China): Please see Table 8 attached;

| k. | Information on investment in mainland China

| 1) | The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Please see Table 9 attached.

- 66 -

| 2) | Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: Please see Note 3 1.

36. | OPERATING SEGMENTS INFORMATION

The Company has provided the operating segments disclosure in the consolidated financial statements.

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TABLE 1

Taiwan Semiconductor Manufacturing Company Limited and Investees

FINANCINGS PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

No. | Financing Company | Counter-party | Financial Statement Account | Related Party | Maximum Balance for the Period (Foreign Currencies in Thousands) (Note 3) | Ending Balance (Foreign Currencies in Thousands) (Note 3) | Amount Actually Drawn (Foreign Currencies in Thousands) | Interest Rate | Nature for Financing (Note 4) | Transaction Amounts | Reason for Financing (Note 4) | Allowance for Bad Debt | Collateral | Financing Limits for Each Borrowing Company (Notes 1 and 2) | Financing Company’s Total Financing Amount Limits (Notes 1 and 2)
Item | Value
1 | TSMC China | TSMC Nanjing | Other receivables from related parties | Yes | $ (RMB (US$ | 44,497,852 7,000,000 479,000 | )& ) | $ (RMB (US$ | 38,903,568 6,000,000 436,000 | )& ) | $ (RMB (US$ | 24,102,968 5,000,000 86,000 | )& ) |  | 1.50~1.96% |  | The need for long-term financing | $ | - |  | Operating capital | $ | - |  | - | $ | - |  | $ | 57,358,467 |  | $ | 57,358,467 |
2 | TSMC Global | TSMC | Other receivables from related parties | Yes | (US$ | 44,982,000 1,500,000 | ) | (US$ | 29,988,000 1,000,000 | ) | (US$ | 29,988,000 1,000,000 | ) |  | 0.00% |  | The need for short-term financing |  | - |  | Operating capital |  | - |  | - |  | - |  |  | 397,737,270 |  |  | 397,737,270 |

Note 1: | The total amount available for lending purpose shall not exceed the net worth of TSMC China. The total amount for lending to a company for funding for a short-term period shall not exceed ten percent (10%) of the net worth of TSMC China. In addition, the total amount lendable to any one borrower shall be no more than thirty percent (30%) of the borrower’s net worth. The above restriction does not apply to the subsidiaries whose voting shares are 100% owned, directly or indirectly, by TSMC. However, the total amount lendable to any such subsidiary of TSMC shall not exceed forty percent (40%) of the net worth of TSMC China. When there is a lending for funding needs by TSMC China to TSMC, or to the subsidiaries whose voting shares are 100% owned, directly or indirectly, by TSMC, which are not located in Taiwan, the lending will not be subject to the restriction set forth in the above paragraph. Notwithstanding the foregoing, the aggregate amount available for lending to such borrowers and the total amount lendable to each of such borrowers still shall not exceed the net worth of TSMC China.

Note 2: | The total amount available for lending purpose shall not exceed the net worth of TSMC Global. The total amount for lending to a company for funding for a short-term period shall not exceed ten percent (10%) of the net worth of TSMC Global. In addition, the total amount lendable to any one borrower shall be no more than thirty percent (30%) of the borrower’s net worth. While TSMC, or its foreign subsidiaries in which TSMC directly or indirectly holds 100% of the voting shares will not be subject to this restriction, their total borrowing amount still shall not exceed the net worth of TSMC Global. Notwithstanding the foregoing, the aggregate amount for lending to Taiwan companies other than TSMC shall not exceed forty percent (40%) of the net worth of TSMC Global.

Note 3: | The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

Note 4: | The restriction of the term of each loan for funding not exceeding one year shall not apply to inter-company loans for funding between offshore subsidiaries in which the Company holds, directly or indirectly, 100% of the voting shares.

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TABLE 2

Taiwan Semiconductor Manufacturing Company Limited and Investees

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

No. | Endorsement/ Guarantee Provider | Guaranteed Party | Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Notes 1 and 2) | Maximum Balance for the Period (US$ in Thousands) (Note 3) | Ending Balance (US$ in Thousands) (Note 3) | Amount Actually Drawn (US$ in Thousands) | Amount of Endorsement/ Guarantee Collateralized by Properties | Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements | Maximum Endorsement/ Guarantee Amount Allowable (Note 2) | Guarantee Provided by Parent Company | Guarantee Provided by A Subsidiary | Guarantee Provided to Subsidiaries in Mainland China
Name | Nature of Relationship
0 | TSMC | TSMC North America | Subsidiary | $ | 405,352,531 |  | $ (US$ | 2,495,400 83,213 | ) | $ (US$ | 2,495,400 83,213 | ) | $ (US$ | 2,495,400 83,213 | ) | $ | - |  |  | 0.15% |  | $ | 405,352,531 |  | Yes | No | No

Note 1: | The total amount of the guarantee provided by TSMC to any individual entity shall not exceed ten percent (10%) of TSMC’s net worth, or the net worth of such entity. However, subsidiaries whose voting shares are 100% owned, directly or indirectly, by TSMC are not subject to the above restrictions after the approval of the Board of Directors.

Note 2: | The total amount of guarantee shall not exceed twenty-five percent (25%) of TSMC’s net worth.

Note 3: | The maximum balance for the period and ending balance represent the amounts approved by the Board of Directors.

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TABLE 3

Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES HELD

DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC | Non-publicly traded equity investments |  |  |  |  |  |  |
| United Industrial Gases Co., Ltd. | - | Financial assets at fair value through other comprehensive income |  | 21,230 |  | $ | 468,428 |  |  | 10 |  | $ | 468,428 |  |
| Shin-Etsu Handotai Taiwan Co., Ltd. | - | 〃 |  | 10,500 |  |  | 318,276 |  |  | 7 |  |  | 318,276 |  |
| Global Investment Holding Inc. | - | 〃 |  | 11,124 |  |  | 81,529 |  |  | 6 |  |  | 81,529 |  |
| W.K. Technology Fund IV | - | 〃 |  | 806 |  |  | 5,157 |  |  | 2 |  |  | 5,157 |  |
| Crimson Asia Capital | - | 〃 |  | - |  |  | 2,621 |  |  | 1 |  |  | 2,621 |  |
| Horizon Ventures Fund | - | 〃 |  | - |  |  | 1,100 |  |  | 12 |  |  | 1,100 |  |
TSMC Partners | Convertible bonds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Inpria Corporation | - | Financial assets at fair value through Profit or Loss |  | - |  | US$ | 4,127 |  |  | - |  | US$ | 4,127 |  |
| Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Shanghai Walden Venture Capital Enterprise | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 10,380 |  |  | 6 |  | US$ | 10,380 |  |
| China Walden Venture Investments II, L.P. | - | 〃 |  | - |  | US$ | 9,474 |  |  | 9 |  | US$ | 9,474 |  |
| China Walden Venture Investments III, L.P. | - | 〃 |  | - |  | US$ | 3,298 |  |  | 4 |  | US$ | 3,298 |  |
| Tela Innovations | - | 〃 |  | 10,440 |  |  | - |  |  | 25 |  |  | - |  |
| Mcube Inc. | - | 〃 |  | 6,333 |  |  | - |  |  | 12 |  |  | - |  |
TSMC Global | Corporate bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Bank of America Corp | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 46,671 |  |  | N/A |  | US$ | 46,671 |  |
| Goldman Sachs Group Inc/The | - | 〃 |  | - |  | US$ | 39,686 |  |  | N/A |  | US$ | 39,686 |  |
| Morgan Stanley | - | 〃 |  | - |  | US$ | 39,419 |  |  | N/A |  | US$ | 39,419 |  |
| Citigroup Inc | - | 〃 |  | - |  | US$ | 38,637 |  |  | N/A |  | US$ | 38,637 |  |
| AbbVie Inc | - | 〃 |  | - |  | US$ | 31,425 |  |  | N/A |  | US$ | 31,425 |  |
| JPMorgan Chase & Co | - | 〃 |  | - |  | US$ | 30,678 |  |  | N/A |  | US$ | 30,678 |  |
| AT&T Inc | - | 〃 |  | - |  | US$ | 26,140 |  |  | N/A |  | US$ | 26,140 |  |
| CVS Health Corp | - | 〃 |  | - |  | US$ | 22,242 |  |  | N/A |  | US$ | 22,242 |  |
| Bristol-Myers Squibb Co | - | 〃 |  | - |  | US$ | 21,666 |  |  | N/A |  | US$ | 21,666 |  |
| Mitsubishi UFJ Financial Group Inc | - | 〃 |  | - |  | US$ | 21,332 |  |  | N/A |  | US$ | 21,332 |  |
| Wells Fargo & Co | - | 〃 |  | - |  | US$ | 21,303 |  |  | N/A |  | US$ | 21,303 |  |
| HSBC Holdings PLC | - | 〃 |  | - |  | US$ | 20,102 |  |  | N/A |  | US$ | 20,102 |  |
| Apple Inc | - | 〃 |  | - |  | US$ | 19,886 |  |  | N/A |  | US$ | 19,886 |  |
| Sumitomo Mitsui Financial Group Inc | - | 〃 |  | - |  | US$ | 19,176 |  |  | N/A |  | US$ | 19,176 |  |
| Toronto-Dominion Bank/The | - | 〃 |  | - |  | US$ | 18,018 |  |  | N/A |  | US$ | 18,018 |  |
| Credit Agricole SA/London | - | 〃 |  | - |  | US$ | 14,904 |  |  | N/A |  | US$ | 14,904 |  |
| Verizon Communications Inc | - | 〃 |  | - |  | US$ | 14,058 |  |  | N/A |  | US$ | 14,058 |  |
| BNP Paribas SA | - | 〃 |  | - |  | US$ | 13,092 |  |  | N/A |  | US$ | 13,092 |  |
| UBS Group Funding Switzerland AG | - | 〃 |  | - |  | US$ | 12,932 |  |  | N/A |  | US$ | 12,932 |  |
| Banco Santander SA | - | 〃 |  | - |  | US$ | 12,837 |  |  | N/A |  | US$ | 12,837 |  |
| United Technologies Corp | - | 〃 |  | - |  | US$ | 12,108 |  |  | N/A |  | US$ | 12,108 |  |
| ERAC USA Finance LLC | - | 〃 |  | - |  | US$ | 11,904 |  |  | N/A |  | US$ | 11,904 |  |
| Banque Federative du Credit Mutuel SA | - | 〃 |  | - |  | US$ | 11,752 |  |  | N/A |  | US$ | 11,752 |  |

(Continued)

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Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | American International Group Inc | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 11,423 |  |  | N/A |  | US$ | 11,423 |  |
| Equifax Inc | - | 〃 |  | - |  | US$ | 11,001 |  |  | N/A |  | US$ | 11,001 |  |
| Ryder System Inc | - | 〃 |  | - |  | US$ | 10,892 |  |  | N/A |  | US$ | 10,892 |  |
| BPCE SA | - | 〃 |  | - |  | US$ | 10,887 |  |  | N/A |  | US$ | 10,887 |  |
| BAT Capital Corp | - | 〃 |  | - |  | US$ | 10,843 |  |  | N/A |  | US$ | 10,843 |  |
| Reliance Standard Life Global Funding II | - | 〃 |  | - |  | US$ | 10,682 |  |  | N/A |  | US$ | 10,682 |  |
| DTE Energy Co | - | 〃 |  | - |  | US$ | 10,681 |  |  | N/A |  | US$ | 10,681 |  |
| Hewlett Packard Enterprise Co | - | 〃 |  | - |  | US$ | 10,661 |  |  | N/A |  | US$ | 10,661 |  |
| Penske Truck Leasing Co Lp / PTL Finance Corp | - | 〃 |  | - |  | US$ | 10,612 |  |  | N/A |  | US$ | 10,612 |  |
| International Business Machines Corp | - | 〃 |  | - |  | US$ | 10,414 |  |  | N/A |  | US$ | 10,414 |  |
| Macquarie Group Ltd | - | 〃 |  | - |  | US$ | 10,344 |  |  | N/A |  | US$ | 10,344 |  |
| Mizuho Financial Group Inc | - | 〃 |  | - |  | US$ | 10,307 |  |  | N/A |  | US$ | 10,307 |  |
| Skandinaviska Enskilda Banken AB | - | 〃 |  | - |  | US$ | 9,827 |  |  | N/A |  | US$ | 9,827 |  |
| Nordea Bank Abp | - | 〃 |  | - |  | US$ | 9,458 |  |  | N/A |  | US$ | 9,458 |  |
| NextEra Energy Capital Holdings Inc | - | 〃 |  | - |  | US$ | 9,420 |  |  | N/A |  | US$ | 9,420 |  |
| SMBC Aviation Capital Finance DAC | - | 〃 |  | - |  | US$ | 9,414 |  |  | N/A |  | US$ | 9,414 |  |
| Fiserv Inc | - | 〃 |  | - |  | US$ | 9,174 |  |  | N/A |  | US$ | 9,174 |  |
| Lloyds Banking Group PLC | - | 〃 |  | - |  | US$ | 9,106 |  |  | N/A |  | US$ | 9,106 |  |
| Cox Communications Inc | - | 〃 |  | - |  | US$ | 9,062 |  |  | N/A |  | US$ | 9,062 |  |
| Western Union Co/The | - | 〃 |  | - |  | US$ | 8,991 |  |  | N/A |  | US$ | 8,991 |  |
| Tyson Foods Inc | - | 〃 |  | - |  | US$ | 8,944 |  |  | N/A |  | US$ | 8,944 |  |
| PNC Bank NA | - | 〃 |  | - |  | US$ | 8,913 |  |  | N/A |  | US$ | 8,913 |  |
| Suncorp-Metway Ltd | - | 〃 |  | - |  | US$ | 8,869 |  |  | N/A |  | US$ | 8,869 |  |
| Bank of Montreal | - | 〃 |  | - |  | US$ | 8,551 |  |  | N/A |  | US$ | 8,551 |  |
| Comcast Corp | - | 〃 |  | - |  | US$ | 8,514 |  |  | N/A |  | US$ | 8,514 |  |
| Capital One NA | - | 〃 |  | - |  | US$ | 8,484 |  |  | N/A |  | US$ | 8,484 |  |
| Midwest Connector Capital Co LLC | - | 〃 |  | - |  | US$ | 8,412 |  |  | N/A |  | US$ | 8,412 |  |
| Santander UK PLC | - | 〃 |  | - |  | US$ | 8,272 |  |  | N/A |  | US$ | 8,272 |  |
| Scentre Group Trust 1 / Scentre Group Trust 2 | - | 〃 |  | - |  | US$ | 8,248 |  |  | N/A |  | US$ | 8,248 |  |
| Metropolitan Life Global Funding I | - | 〃 |  | - |  | US$ | 8,222 |  |  | N/A |  | US$ | 8,222 |  |
| Credit Suisse AG/New York NY | - | 〃 |  | - |  | US$ | 8,031 |  |  | N/A |  | US$ | 8,031 |  |
| Athene Global Funding | - | 〃 |  | - |  | US$ | 7,999 |  |  | N/A |  | US$ | 7,999 |  |
| Societe Generale SA | - | 〃 |  | - |  | US$ | 7,825 |  |  | N/A |  | US$ | 7,825 |  |
| NatWest Markets PLC | - | 〃 |  | - |  | US$ | 7,816 |  |  | N/A |  | US$ | 7,816 |  |
| Altria Group Inc | - | 〃 |  | - |  | US$ | 7,805 |  |  | N/A |  | US$ | 7,805 |  |
| Dominion Energy Gas Holdings LLC | - | 〃 |  | - |  | US$ | 7,681 |  |  | N/A |  | US$ | 7,681 |  |
| Air Lease Corp | - | 〃 |  | - |  | US$ | 7,675 |  |  | N/A |  | US$ | 7,675 |  |
| Tencent Holdings Ltd | - | 〃 |  | - |  | US$ | 7,612 |  |  | N/A |  | US$ | 7,612 |  |
| Microsoft Corp | - | 〃 |  | - |  | US$ | 7,455 |  |  | N/A |  | US$ | 7,455 |  |
| BG Energy Capital PLC | - | 〃 |  | - |  | US$ | 7,346 |  |  | N/A |  | US$ | 7,346 |  |
| Prudential Funding LLC | - | 〃 |  | - |  | US$ | 7,333 |  |  | N/A |  | US$ | 7,333 |  |
| Fox Corp | - | 〃 |  | - |  | US$ | 7,331 |  |  | N/A |  | US$ | 7,331 |  |
| BP Capital Markets America Inc | - | 〃 |  | - |  | US$ | 7,280 |  |  | N/A |  | US$ | 7,280 |  |
| ANZ New Zealand Int'l Ltd/London | - | 〃 |  | - |  | US$ | 7,259 |  |  | N/A |  | US$ | 7,259 |  |
| Jackson National Life Global Funding | - | 〃 |  | - |  | US$ | 7,203 |  |  | N/A |  | US$ | 7,203 |  |
| Huntington Bancshares Inc/OH | - | 〃 |  | - |  | US$ | 7,160 |  |  | N/A |  | US$ | 7,160 |  |
| Shire Acquisitions Investments Ireland DAC | - | 〃 |  | - |  | US$ | 6,972 |  |  | N/A |  | US$ | 6,972 |  |
| Wells Fargo Bank NA | - | 〃 |  | - |  | US$ | 6,958 |  |  | N/A |  | US$ | 6,958 |  |
| New York Life Global Funding | - | 〃 |  | - |  | US$ | 6,947 |  |  | N/A |  | US$ | 6,947 |  |
| ING Groep NV | - | 〃 |  | - |  | US$ | 6,874 |  |  | N/A |  | US$ | 6,874 |  |
| Kinder Morgan Energy Partners LP | - | 〃 |  | - |  | US$ | 6,842 |  |  | N/A |  | US$ | 6,842 |  |
| SunTrust Bank/Atlanta GA | - | 〃 |  | - |  | US$ | 6,680 |  |  | N/A |  | US$ | 6,680 |  |

(Continued)

- 71 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Daimler Finance North America LLC | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 6,536 |  |  | N/A |  | US$ | 6,536 |  |
| Regions Financial Corp | - | 〃 |  | - |  | US$ | 6,384 |  |  | N/A |  | US$ | 6,384 |  |
| Credit Suisse Group Funding Guernsey Ltd | - | 〃 |  | - |  | US$ | 6,344 |  |  | N/A |  | US$ | 6,344 |  |
| General Dynamics Corp | - | 〃 |  | - |  | US$ | 6,297 |  |  | N/A |  | US$ | 6,297 |  |
| Anheuser-Busch InBev Worldwide Inc | - | 〃 |  | - |  | US$ | 6,276 |  |  | N/A |  | US$ | 6,276 |  |
| DNB Bank ASA | - | 〃 |  | - |  | US$ | 6,252 |  |  | N/A |  | US$ | 6,252 |  |
| American Express Co | - | 〃 |  | - |  | US$ | 6,239 |  |  | N/A |  | US$ | 6,239 |  |
| AIG Global Funding | - | 〃 |  | - |  | US$ | 6,199 |  |  | N/A |  | US$ | 6,199 |  |
| Panasonic Corp | - | 〃 |  | - |  | US$ | 6,104 |  |  | N/A |  | US$ | 6,104 |  |
| Canadian Imperial Bank of Commerce | - | 〃 |  | - |  | US$ | 6,036 |  |  | N/A |  | US$ | 6,036 |  |
| Reckitt Benckiser Treasury Services PLC | - | 〃 |  | - |  | US$ | 6,029 |  |  | N/A |  | US$ | 6,029 |  |
| Fortive Corp | - | 〃 |  | - |  | US$ | 6,025 |  |  | N/A |  | US$ | 6,025 |  |
| Royal Bank of Canada | - | 〃 |  | - |  | US$ | 6,010 |  |  | N/A |  | US$ | 6,010 |  |
| Macquarie Bank Ltd | - | 〃 |  | - |  | US$ | 5,983 |  |  | N/A |  | US$ | 5,983 |  |
| Analog Devices Inc | - | 〃 |  | - |  | US$ | 5,969 |  |  | N/A |  | US$ | 5,969 |  |
| Bank of Nova Scotia/The | - | 〃 |  | - |  | US$ | 5,958 |  |  | N/A |  | US$ | 5,958 |  |
| WPP Finance 2010 | - | 〃 |  | - |  | US$ | 5,927 |  |  | N/A |  | US$ | 5,927 |  |
| Capital One Financial Corp | - | 〃 |  | - |  | US$ | 5,848 |  |  | N/A |  | US$ | 5,848 |  |
| Roper Technologies Inc | - | 〃 |  | - |  | US$ | 5,717 |  |  | N/A |  | US$ | 5,717 |  |
| Intesa Sanpaolo SpA | - | 〃 |  | - |  | US$ | 5,678 |  |  | N/A |  | US$ | 5,678 |  |
| Barclays Bank PLC | - | 〃 |  | - |  | US$ | 5,645 |  |  | N/A |  | US$ | 5,645 |  |
| Alabama Power Co | - | 〃 |  | - |  | US$ | 5,623 |  |  | N/A |  | US$ | 5,623 |  |
| Anheuser-Busch InBev Finance Inc | - | 〃 |  | - |  | US$ | 5,618 |  |  | N/A |  | US$ | 5,618 |  |
| Shell International Finance BV | - | 〃 |  | - |  | US$ | 5,595 |  |  | N/A |  | US$ | 5,595 |  |
| Bayer US Finance II LLC | - | 〃 |  | - |  | US$ | 5,510 |  |  | N/A |  | US$ | 5,510 |  |
| Cigna Corp | - | 〃 |  | - |  | US$ | 5,475 |  |  | N/A |  | US$ | 5,475 |  |
| Sompo International Holdings Ltd | - | 〃 |  | - |  | US$ | 5,275 |  |  | N/A |  | US$ | 5,275 |  |
| Takeda Pharmaceutical Co Ltd | - | 〃 |  | - |  | US$ | 5,245 |  |  | N/A |  | US$ | 5,245 |  |
| Laboratory Corp of America Holdings | - | 〃 |  | - |  | US$ | 5,230 |  |  | N/A |  | US$ | 5,230 |  |
| Lloyds Bank PLC | - | 〃 |  | - |  | US$ | 5,202 |  |  | N/A |  | US$ | 5,202 |  |
| CNA Financial Corp | - | 〃 |  | - |  | US$ | 5,173 |  |  | N/A |  | US$ | 5,173 |  |
| Cooperatieve Rabobank UA | - | 〃 |  | - |  | US$ | 5,124 |  |  | N/A |  | US$ | 5,124 |  |
| BMW US Capital LLC | - | 〃 |  | - |  | US$ | 5,112 |  |  | N/A |  | US$ | 5,112 |  |
| Saudi Arabian Oil Co | - | 〃 |  | - |  | US$ | 5,096 |  |  | N/A |  | US$ | 5,096 |  |
| BB&T Corp | - | 〃 |  | - |  | US$ | 5,041 |  |  | N/A |  | US$ | 5,041 |  |
| Thermo Fisher Scientific Inc | - | 〃 |  | - |  | US$ | 5,029 |  |  | N/A |  | US$ | 5,029 |  |
| Five Corners Funding Trust | - | 〃 |  | - |  | US$ | 4,888 |  |  | N/A |  | US$ | 4,888 |  |
| Enel Finance International NV | - | 〃 |  | - |  | US$ | 4,888 |  |  | N/A |  | US$ | 4,888 |  |
| Vodafone Group PLC | - | 〃 |  | - |  | US$ | 4,807 |  |  | N/A |  | US$ | 4,807 |  |
| Credit Suisse Group AG | - | 〃 |  | - |  | US$ | 4,737 |  |  | N/A |  | US$ | 4,737 |  |
| Standard Chartered PLC | - | 〃 |  | - |  | US$ | 4,717 |  |  | N/A |  | US$ | 4,717 |  |
| Principal Life Global Funding II | - | 〃 |  | - |  | US$ | 4,693 |  |  | N/A |  | US$ | 4,693 |  |
| American Express Credit Corp | - | 〃 |  | - |  | US$ | 4,676 |  |  | N/A |  | US$ | 4,676 |  |
| NiSource Inc | - | 〃 |  | - |  | US$ | 4,583 |  |  | N/A |  | US$ | 4,583 |  |
| ABN AMRO Bank NV | - | 〃 |  | - |  | US$ | 4,574 |  |  | N/A |  | US$ | 4,574 |  |
| Svenska Handelsbanken AB | - | 〃 |  | - |  | US$ | 4,529 |  |  | N/A |  | US$ | 4,529 |  |
| Sempra Energy | - | 〃 |  | - |  | US$ | 4,476 |  |  | N/A |  | US$ | 4,476 |  |
| Keurig Dr Pepper Inc | - | 〃 |  | - |  | US$ | 4,463 |  |  | N/A |  | US$ | 4,463 |  |
| Eversource Energy | - | 〃 |  | - |  | US$ | 4,456 |  |  | N/A |  | US$ | 4,456 |  |
| Welltower Inc | - | 〃 |  | - |  | US$ | 4,444 |  |  | N/A |  | US$ | 4,444 |  |
| Fifth Third Bancorp | - | 〃 |  | - |  | US$ | 4,398 |  |  | N/A |  | US$ | 4,398 |  |
| Truist Bank | - | 〃 |  | - |  | US$ | 4,353 |  |  | N/A |  | US$ | 4,353 |  |

(Continued)

- 72 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Westpac Banking Corp | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 4,350 |  |  | N/A |  | US$ | 4,350 |  |
| Marriott International Inc/MD | - | 〃 |  | - |  | US$ | 4,334 |  |  | N/A |  | US$ | 4,334 |  |
| Duke Energy Corp | - | 〃 |  | - |  | US$ | 4,262 |  |  | N/A |  | US$ | 4,262 |  |
| Verisk Analytics Inc | - | 〃 |  | - |  | US$ | 4,200 |  |  | N/A |  | US$ | 4,200 |  |
| Husky Energy Inc | - | 〃 |  | - |  | US$ | 4,182 |  |  | N/A |  | US$ | 4,182 |  |
| Exelon Corp | - | 〃 |  | - |  | US$ | 4,087 |  |  | N/A |  | US$ | 4,087 |  |
| CenterPoint Energy Inc | - | 〃 |  | - |  | US$ | 4,052 |  |  | N/A |  | US$ | 4,052 |  |
| Intercontinental Exchange Inc | - | 〃 |  | - |  | US$ | 4,043 |  |  | N/A |  | US$ | 4,043 |  |
| Alimentation Couche-Tard Inc | - | 〃 |  | - |  | US$ | 4,003 |  |  | N/A |  | US$ | 4,003 |  |
| HCP Inc | - | 〃 |  | - |  | US$ | 3,989 |  |  | N/A |  | US$ | 3,989 |  |
| European Bank for Reconstruction & Development | - | 〃 |  | - |  | US$ | 3,973 |  |  | N/A |  | US$ | 3,973 |  |
| GE Capital International Funding Co Unlimited Co | - | 〃 |  | - |  | US$ | 3,953 |  |  | N/A |  | US$ | 3,953 |  |
| Citizens Bank NA/Providence RI | - | 〃 |  | - |  | US$ | 3,912 |  |  | N/A |  | US$ | 3,912 |  |
| BOC Aviation Ltd | - | 〃 |  | - |  | US$ | 3,901 |  |  | N/A |  | US$ | 3,901 |  |
| Volkswagen Group of America Finance LLC | - | 〃 |  | - |  | US$ | 3,896 |  |  | N/A |  | US$ | 3,896 |  |
| Nationwide Building Society | - | 〃 |  | - |  | US$ | 3,836 |  |  | N/A |  | US$ | 3,836 |  |
| MPLX LP | - | 〃 |  | - |  | US$ | 3,795 |  |  | N/A |  | US$ | 3,795 |  |
| Monongahela Power Co | - | 〃 |  | - |  | US$ | 3,717 |  |  | N/A |  | US$ | 3,717 |  |
| Asian Development Bank | - | 〃 |  | - |  | US$ | 3,628 |  |  | N/A |  | US$ | 3,628 |  |
| Charles Schwab Corp/The | - | 〃 |  | - |  | US$ | 3,524 |  |  | N/A |  | US$ | 3,524 |  |
| Dominion Energy Inc | - | 〃 |  | - |  | US$ | 3,488 |  |  | N/A |  | US$ | 3,488 |  |
| Commonwealth Bank of Australia | - | 〃 |  | - |  | US$ | 3,421 |  |  | N/A |  | US$ | 3,421 |  |
| KeyBank NA/Cleveland OH | - | 〃 |  | - |  | US$ | 3,324 |  |  | N/A |  | US$ | 3,324 |  |
| WEC Energy Group Inc | - | 〃 |  | - |  | US$ | 3,293 |  |  | N/A |  | US$ | 3,293 |  |
| General Electric Co | - | 〃 |  | - |  | US$ | 3,250 |  |  | N/A |  | US$ | 3,250 |  |
| Walt Disney Co/The | - | 〃 |  | - |  | US$ | 3,246 |  |  | N/A |  | US$ | 3,246 |  |
| ONE Gas Inc | - | 〃 |  | - |  | US$ | 3,224 |  |  | N/A |  | US$ | 3,224 |  |
| Boeing Co/The | - | 〃 |  | - |  | US$ | 3,214 |  |  | N/A |  | US$ | 3,214 |  |
| Nutrien Ltd | - | 〃 |  | - |  | US$ | 3,188 |  |  | N/A |  | US$ | 3,188 |  |
| Hyundai Capital America | - | 〃 |  | - |  | US$ | 3,187 |  |  | N/A |  | US$ | 3,187 |  |
| Inter-American Development Bank | - | 〃 |  | - |  | US$ | 3,168 |  |  | N/A |  | US$ | 3,168 |  |
| AutoZone Inc | - | 〃 |  | - |  | US$ | 3,167 |  |  | N/A |  | US$ | 3,167 |  |
| People's United Financial Inc | - | 〃 |  | - |  | US$ | 3,117 |  |  | N/A |  | US$ | 3,117 |  |
| Textron Inc | - | 〃 |  | - |  | US$ | 3,072 |  |  | N/A |  | US$ | 3,072 |  |
| McKesson Corp | - | 〃 |  | - |  | US$ | 3,071 |  |  | N/A |  | US$ | 3,071 |  |
| Zions Bancorp NA | - | 〃 |  | - |  | US$ | 3,070 |  |  | N/A |  | US$ | 3,070 |  |
| Ameren Corp | - | 〃 |  | - |  | US$ | 3,049 |  |  | N/A |  | US$ | 3,049 |  |
| Rockwell Collins Inc | - | 〃 |  | - |  | US$ | 3,040 |  |  | N/A |  | US$ | 3,040 |  |
| Oncor Electric Delivery Co LLC | - | 〃 |  | - |  | US$ | 3,038 |  |  | N/A |  | US$ | 3,038 |  |
| DuPont de Nemours Inc | - | 〃 |  | - |  | US$ | 3,037 |  |  | N/A |  | US$ | 3,037 |  |
| Xcel Energy Inc | - | 〃 |  | - |  | US$ | 3,015 |  |  | N/A |  | US$ | 3,015 |  |
| Duke Energy Florida LLC | - | 〃 |  | - |  | US$ | 3,002 |  |  | N/A |  | US$ | 3,002 |  |
| Cooperatieve Rabobank UA/NY | - | 〃 |  | - |  | US$ | 2,980 |  |  | N/A |  | US$ | 2,980 |  |
| Canadian Natural Resources Ltd | - | 〃 |  | - |  | US$ | 2,921 |  |  | N/A |  | US$ | 2,921 |  |
| Reynolds American Inc | - | 〃 |  | - |  | US$ | 2,921 |  |  | N/A |  | US$ | 2,921 |  |
| Danske Bank A/S | - | 〃 |  | - |  | US$ | 2,903 |  |  | N/A |  | US$ | 2,903 |  |
| MUFG Union Bank NA | - | 〃 |  | - |  | US$ | 2,893 |  |  | N/A |  | US$ | 2,893 |  |
| RELX Capital Inc | - | 〃 |  | - |  | US$ | 2,875 |  |  | N/A |  | US$ | 2,875 |  |
| Barrick Gold Corp | - | 〃 |  | - |  | US$ | 2,862 |  |  | N/A |  | US$ | 2,862 |  |
| Royal Bank of Scotland Group PLC | - | 〃 |  | - |  | US$ | 2,848 |  |  | N/A |  | US$ | 2,848 |  |
| Compass Bank | - | 〃 |  | - |  | US$ | 2,794 |  |  | N/A |  | US$ | 2,794 |  |
| Ventas Realty LP | - | 〃 |  | - |  | US$ | 2,771 |  |  | N/A |  | US$ | 2,771 |  |

(Continued)

- 73 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Dow Chemical Co/The | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 2,740 |  |  | N/A |  | US$ | 2,740 |  |
| Public Service Enterprise Group Inc | - | 〃 |  | - |  | US$ | 2,728 |  |  | N/A |  | US$ | 2,728 |  |
| Nuveen Finance LLC | - | 〃 |  | - |  | US$ | 2,717 |  |  | N/A |  | US$ | 2,717 |  |
| John Deere Capital Corp | - | 〃 |  | - |  | US$ | 2,698 |  |  | N/A |  | US$ | 2,698 |  |
| Quest Diagnostics Inc | - | 〃 |  | - |  | US$ | 2,695 |  |  | N/A |  | US$ | 2,695 |  |
| Huntington National Bank/The | - | 〃 |  | - |  | US$ | 2,668 |  |  | N/A |  | US$ | 2,668 |  |
| Newcrest Finance Pty Ltd | - | 〃 |  | - |  | US$ | 2,668 |  |  | N/A |  | US$ | 2,668 |  |
| Enterprise Products Operating LLC | - | 〃 |  | - |  | US$ | 2,622 |  |  | N/A |  | US$ | 2,622 |  |
| Deutsche Telekom International Finance BV | - | 〃 |  | - |  | US$ | 2,615 |  |  | N/A |  | US$ | 2,615 |  |
| Exelon Generation Co LLC | - | 〃 |  | - |  | US$ | 2,601 |  |  | N/A |  | US$ | 2,601 |  |
| AvalonBay Communities Inc | - | 〃 |  | - |  | US$ | 2,564 |  |  | N/A |  | US$ | 2,564 |  |
| GlaxoSmithKline Capital PLC | - | 〃 |  | - |  | US$ | 2,555 |  |  | N/A |  | US$ | 2,555 |  |
| Seven & i Holdings Co Ltd | - | 〃 |  | - |  | US$ | 2,550 |  |  | N/A |  | US$ | 2,550 |  |
| UBS Group AG | - | 〃 |  | - |  | US$ | 2,540 |  |  | N/A |  | US$ | 2,540 |  |
| Barclays PLC | - | 〃 |  | - |  | US$ | 2,527 |  |  | N/A |  | US$ | 2,527 |  |
| Entergy Corp | - | 〃 |  | - |  | US$ | 2,527 |  |  | N/A |  | US$ | 2,527 |  |
| Delta Air Lines 2007-1 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 2,524 |  |  | N/A |  | US$ | 2,524 |  |
| 3M Co | - | 〃 |  | - |  | US$ | 2,507 |  |  | N/A |  | US$ | 2,507 |  |
| Simon Property Group LP | - | 〃 |  | - |  | US$ | 2,494 |  |  | N/A |  | US$ | 2,494 |  |
| Ventas Realty LP / Ventas Capital Corp | - | 〃 |  | - |  | US$ | 2,450 |  |  | N/A |  | US$ | 2,450 |  |
| Northrop Grumman Corp | - | 〃 |  | - |  | US$ | 2,435 |  |  | N/A |  | US$ | 2,435 |  |
| Berkshire Hathaway Energy Co | - | 〃 |  | - |  | US$ | 2,424 |  |  | N/A |  | US$ | 2,424 |  |
| Baidu Inc | - | 〃 |  | - |  | US$ | 2,374 |  |  | N/A |  | US$ | 2,374 |  |
| Berkshire Hathaway Inc | - | 〃 |  | - |  | US$ | 2,373 |  |  | N/A |  | US$ | 2,373 |  |
| Anthem Inc | - | 〃 |  | - |  | US$ | 2,352 |  |  | N/A |  | US$ | 2,352 |  |
| Eastman Chemical Co | - | 〃 |  | - |  | US$ | 2,307 |  |  | N/A |  | US$ | 2,307 |  |
| NBCUniversal Media LLC | - | 〃 |  | - |  | US$ | 2,269 |  |  | N/A |  | US$ | 2,269 |  |
| Cintas Corp No 2 | - | 〃 |  | - |  | US$ | 2,244 |  |  | N/A |  | US$ | 2,244 |  |
| Marathon Petroleum Corp | - | 〃 |  | - |  | US$ | 2,242 |  |  | N/A |  | US$ | 2,242 |  |
| Aetna Inc | - | 〃 |  | - |  | US$ | 2,235 |  |  | N/A |  | US$ | 2,235 |  |
| Unum Group | - | 〃 |  | - |  | US$ | 2,219 |  |  | N/A |  | US$ | 2,219 |  |
| National Bank of Canada | - | 〃 |  | - |  | US$ | 2,209 |  |  | N/A |  | US$ | 2,209 |  |
| PSEG Power LLC | - | 〃 |  | - |  | US$ | 2,193 |  |  | N/A |  | US$ | 2,193 |  |
| Southern California Edison Co | - | 〃 |  | - |  | US$ | 2,175 |  |  | N/A |  | US$ | 2,175 |  |
| QUALCOMM Inc | - | 〃 |  | - |  | US$ | 2,164 |  |  | N/A |  | US$ | 2,164 |  |
| US Bank NA/Cincinnati OH | - | 〃 |  | - |  | US$ | 2,163 |  |  | N/A |  | US$ | 2,163 |  |
| Lincoln National Corp | - | 〃 |  | - |  | US$ | 2,162 |  |  | N/A |  | US$ | 2,162 |  |
| American Airlines 2013-2 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 2,159 |  |  | N/A |  | US$ | 2,159 |  |
| Suncor Energy Inc | - | 〃 |  | - |  | US$ | 2,122 |  |  | N/A |  | US$ | 2,122 |  |
| ASB Bank Ltd | - | 〃 |  | - |  | US$ | 2,120 |  |  | N/A |  | US$ | 2,120 |  |
| Ingersoll-Rand Luxembourg Finance SA | - | 〃 |  | - |  | US$ | 2,099 |  |  | N/A |  | US$ | 2,099 |  |
| San Diego Gas & Electric Co | - | 〃 |  | - |  | US$ | 2,092 |  |  | N/A |  | US$ | 2,092 |  |
| Woolworths Group Ltd | - | 〃 |  | - |  | US$ | 2,072 |  |  | N/A |  | US$ | 2,072 |  |
| WR Berkley Corp | - | 〃 |  | - |  | US$ | 2,045 |  |  | N/A |  | US$ | 2,045 |  |
| AstraZeneca PLC | - | 〃 |  | - |  | US$ | 2,041 |  |  | N/A |  | US$ | 2,041 |  |
| US Bancorp | - | 〃 |  | - |  | US$ | 2,028 |  |  | N/A |  | US$ | 2,028 |  |
| Pricoa Global Funding I | - | 〃 |  | - |  | US$ | 2,015 |  |  | N/A |  | US$ | 2,015 |  |
| Oracle Corp | - | 〃 |  | - |  | US$ | 2,004 |  |  | N/A |  | US$ | 2,004 |  |
| CK Hutchison International 16 Ltd | - | 〃 |  | - |  | US$ | 1,984 |  |  | N/A |  | US$ | 1,984 |  |
| Avangrid Inc | - | 〃 |  | - |  | US$ | 1,960 |  |  | N/A |  | US$ | 1,960 |  |
| Bank of New York Mellon Corp/The | - | 〃 |  | - |  | US$ | 1,956 |  |  | N/A |  | US$ | 1,956 |  |
| Kinder Morgan Inc/DE | - | 〃 |  | - |  | US$ | 1,949 |  |  | N/A |  | US$ | 1,949 |  |

(Continued)

- 74 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | CenterPoint Energy Resources Corp | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 1,918 |  |  | N/A |  | US$ | 1,918 |  |
| Australia & New Zealand Banking Group Ltd/New York NY | - | 〃 |  | - |  | US$ | 1,906 |  |  | N/A |  | US$ | 1,906 |  |
| Kroger Co/The | - | 〃 |  | - |  | US$ | 1,904 |  |  | N/A |  | US$ | 1,904 |  |
| BP Capital Markets PLC | - | 〃 |  | - |  | US$ | 1,900 |  |  | N/A |  | US$ | 1,900 |  |
| Sydney Airport Finance Co Pty Ltd | - | 〃 |  | - |  | US$ | 1,886 |  |  | N/A |  | US$ | 1,886 |  |
| Bank of New Zealand | - | 〃 |  | - |  | US$ | 1,866 |  |  | N/A |  | US$ | 1,866 |  |
| Discover Bank | - | 〃 |  | - |  | US$ | 1,831 |  |  | N/A |  | US$ | 1,831 |  |
| WestRock RKT LLC | - | 〃 |  | - |  | US$ | 1,791 |  |  | N/A |  | US$ | 1,791 |  |
| Philip Morris International Inc | - | 〃 |  | - |  | US$ | 1,772 |  |  | N/A |  | US$ | 1,772 |  |
| McCormick & Co Inc/MD | - | 〃 |  | - |  | US$ | 1,760 |  |  | N/A |  | US$ | 1,760 |  |
| Equinor ASA | - | 〃 |  | - |  | US$ | 1,751 |  |  | N/A |  | US$ | 1,751 |  |
| General Mills Inc | - | 〃 |  | - |  | US$ | 1,744 |  |  | N/A |  | US$ | 1,744 |  |
| Public Service Co of Oklahoma | - | 〃 |  | - |  | US$ | 1,741 |  |  | N/A |  | US$ | 1,741 |  |
| PPL Capital Funding Inc | - | 〃 |  | - |  | US$ | 1,722 |  |  | N/A |  | US$ | 1,722 |  |
| Wisconsin Public Service Corp | - | 〃 |  | - |  | US$ | 1,711 |  |  | N/A |  | US$ | 1,711 |  |
| ITC Holdings Corp | - | 〃 |  | - |  | US$ | 1,670 |  |  | N/A |  | US$ | 1,670 |  |
| Spectra Energy Partners LP | - | 〃 |  | - |  | US$ | 1,661 |  |  | N/A |  | US$ | 1,661 |  |
| Toyota Industries Corp | - | 〃 |  | - |  | US$ | 1,657 |  |  | N/A |  | US$ | 1,657 |  |
| Mondelez International Holdings Netherlands BV | - | 〃 |  | - |  | US$ | 1,650 |  |  | N/A |  | US$ | 1,650 |  |
| Southern Co/The | - | 〃 |  | - |  | US$ | 1,643 |  |  | N/A |  | US$ | 1,643 |  |
| Walgreens Boots Alliance Inc | - | 〃 |  | - |  | US$ | 1,630 |  |  | N/A |  | US$ | 1,630 |  |
| Brookfield Finance Inc | - | 〃 |  | - |  | US$ | 1,604 |  |  | N/A |  | US$ | 1,604 |  |
| UnitedHealth Group Inc | - | 〃 |  | - |  | US$ | 1,601 |  |  | N/A |  | US$ | 1,601 |  |
| LyondellBasell Industries NV | - | 〃 |  | - |  | US$ | 1,593 |  |  | N/A |  | US$ | 1,593 |  |
| Xylem Inc/NY | - | 〃 |  | - |  | US$ | 1,572 |  |  | N/A |  | US$ | 1,572 |  |
| Suntory Holdings Ltd | - | 〃 |  | - |  | US$ | 1,572 |  |  | N/A |  | US$ | 1,572 |  |
| Nestle Holdings Inc | - | 〃 |  | - |  | US$ | 1,559 |  |  | N/A |  | US$ | 1,559 |  |
| CK Hutchison International 19 Ltd | - | 〃 |  | - |  | US$ | 1,538 |  |  | N/A |  | US$ | 1,538 |  |
| NTT Finance Corp | - | 〃 |  | - |  | US$ | 1,525 |  |  | N/A |  | US$ | 1,525 |  |
| Trust F/1401 | - | 〃 |  | - |  | US$ | 1,523 |  |  | N/A |  | US$ | 1,523 |  |
| Activision Blizzard Inc | - | 〃 |  | - |  | US$ | 1,517 |  |  | N/A |  | US$ | 1,517 |  |
| Public Service Electric & Gas Co | - | 〃 |  | - |  | US$ | 1,516 |  |  | N/A |  | US$ | 1,516 |  |
| KEB Hana Bank | - | 〃 |  | - |  | US$ | 1,504 |  |  | N/A |  | US$ | 1,504 |  |
| Guardian Life Global Funding | - | 〃 |  | - |  | US$ | 1,502 |  |  | N/A |  | US$ | 1,502 |  |
| Sinopec Group Overseas Development 2015 Ltd | - | 〃 |  | - |  | US$ | 1,501 |  |  | N/A |  | US$ | 1,501 |  |
| Georgia Power Co | - | 〃 |  | - |  | US$ | 1,500 |  |  | N/A |  | US$ | 1,500 |  |
| Mastercard Inc | - | 〃 |  | - |  | US$ | 1,496 |  |  | N/A |  | US$ | 1,496 |  |
| Realty Income Corp | - | 〃 |  | - |  | US$ | 1,496 |  |  | N/A |  | US$ | 1,496 |  |
| AIA Group Ltd | - | 〃 |  | - |  | US$ | 1,488 |  |  | N/A |  | US$ | 1,488 |  |
| Protective Life Global Funding | - | 〃 |  | - |  | US$ | 1,461 |  |  | N/A |  | US$ | 1,461 |  |
| Prudential Financial Inc | - | 〃 |  | - |  | US$ | 1,458 |  |  | N/A |  | US$ | 1,458 |  |
| HSBC Bank PLC | - | 〃 |  | - |  | US$ | 1,438 |  |  | N/A |  | US$ | 1,438 |  |
| Westlake Chemical Corp | - | 〃 |  | - |  | US$ | 1,432 |  |  | N/A |  | US$ | 1,432 |  |
| Texas Eastern Transmission LP | - | 〃 |  | - |  | US$ | 1,415 |  |  | N/A |  | US$ | 1,415 |  |
| Daiwa Securities Group Inc | - | 〃 |  | - |  | US$ | 1,412 |  |  | N/A |  | US$ | 1,412 |  |
| Citizens Financial Group Inc | - | 〃 |  | - |  | US$ | 1,410 |  |  | N/A |  | US$ | 1,410 |  |
| CNOOC Curtis Funding No 1 Pty Ltd | - | 〃 |  | - |  | US$ | 1,390 |  |  | N/A |  | US$ | 1,390 |  |
| Baker Hughes a GE Co LLC / Baker Hughes Co-Obligor Inc | - | 〃 |  | - |  | US$ | 1,387 |  |  | N/A |  | US$ | 1,387 |  |
| Pernod Ricard SA | - | 〃 |  | - |  | US$ | 1,357 |  |  | N/A |  | US$ | 1,357 |  |
| Ameriprise Financial Inc | - | 〃 |  | - |  | US$ | 1,355 |  |  | N/A |  | US$ | 1,355 |  |
| Essex Portfolio LP | - | 〃 |  | - |  | US$ | 1,343 |  |  | N/A |  | US$ | 1,343 |  |
| Ontario Teachers' Cadillac Fairview Properties Trust | - | 〃 |  | - |  | US$ | 1,326 |  |  | N/A |  | US$ | 1,326 |  |

(Continued)

- 75 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Entergy Arkansas LLC | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 1,315 |  |  | N/A |  | US$ | 1,315 |  |
| JPMorgan Chase Bank NA | - | 〃 |  | - |  | US$ | 1,304 |  |  | N/A |  | US$ | 1,304 |  |
| Interpublic Group of Cos Inc/The | - | 〃 |  | - |  | US$ | 1,289 |  |  | N/A |  | US$ | 1,289 |  |
| American Electric Power Co Inc | - | 〃 |  | - |  | US$ | 1,274 |  |  | N/A |  | US$ | 1,274 |  |
| Santander UK Group Holdings PLC | - | 〃 |  | - |  | US$ | 1,228 |  |  | N/A |  | US$ | 1,228 |  |
| State Street Corp | - | 〃 |  | - |  | US$ | 1,201 |  |  | N/A |  | US$ | 1,201 |  |
| Cardinal Health Inc | - | 〃 |  | - |  | US$ | 1,201 |  |  | N/A |  | US$ | 1,201 |  |
| Aviation Capital Group LLC | - | 〃 |  | - |  | US$ | 1,193 |  |  | N/A |  | US$ | 1,193 |  |
| Sprint Spectrum Co LLC / Sprint Spectrum Co II LLC / Sprint Spectrum Co III LLC | - | 〃 |  | - |  | US$ | 1,192 |  |  | N/A |  | US$ | 1,192 |  |
| UDR Inc | - | 〃 |  | - |  | US$ | 1,190 |  |  | N/A |  | US$ | 1,190 |  |
| Regions Bank/Birmingham AL | - | 〃 |  | - |  | US$ | 1,178 |  |  | N/A |  | US$ | 1,178 |  |
| Magellan Midstream Partners LP | - | 〃 |  | - |  | US$ | 1,162 |  |  | N/A |  | US$ | 1,162 |  |
| Johnson Controls International plc | - | 〃 |  | - |  | US$ | 1,149 |  |  | N/A |  | US$ | 1,149 |  |
| Cleveland Electric Illuminating Co/The | - | 〃 |  | - |  | US$ | 1,144 |  |  | N/A |  | US$ | 1,144 |  |
| TransCanada PipeLines Ltd | - | 〃 |  | - |  | US$ | 1,140 |  |  | N/A |  | US$ | 1,140 |  |
| APT Pipelines Ltd | - | 〃 |  | - |  | US$ | 1,139 |  |  | N/A |  | US$ | 1,139 |  |
| National Australia Bank Ltd/New York | - | 〃 |  | - |  | US$ | 1,135 |  |  | N/A |  | US$ | 1,135 |  |
| Manulife Financial Corp | - | 〃 |  | - |  | US$ | 1,122 |  |  | N/A |  | US$ | 1,122 |  |
| WP Carey Inc | - | 〃 |  | - |  | US$ | 1,068 |  |  | N/A |  | US$ | 1,068 |  |
| CMS Energy Corp | - | 〃 |  | - |  | US$ | 1,053 |  |  | N/A |  | US$ | 1,053 |  |
| Alexandria Real Estate Equities Inc | - | 〃 |  | - |  | US$ | 1,051 |  |  | N/A |  | US$ | 1,051 |  |
| Union Pacific Corp | - | 〃 |  | - |  | US$ | 1,042 |  |  | N/A |  | US$ | 1,042 |  |
| Baltimore Gas & Electric Co | - | 〃 |  | - |  | US$ | 1,037 |  |  | N/A |  | US$ | 1,037 |  |
| Cigna Holding Co | - | 〃 |  | - |  | US$ | 1,033 |  |  | N/A |  | US$ | 1,033 |  |
| DH Europe Finance II Sarl | - | 〃 |  | - |  | US$ | 1,026 |  |  | N/A |  | US$ | 1,026 |  |
| Weyerhaeuser Co | - | 〃 |  | - |  | US$ | 1,026 |  |  | N/A |  | US$ | 1,026 |  |
| Entergy Mississippi LLC | - | 〃 |  | - |  | US$ | 1,024 |  |  | N/A |  | US$ | 1,024 |  |
| Toyota Motor Credit Corp | - | 〃 |  | - |  | US$ | 1,020 |  |  | N/A |  | US$ | 1,020 |  |
| Continental Airlines 2012-1 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 1,020 |  |  | N/A |  | US$ | 1,020 |  |
| Loews Corp | - | 〃 |  | - |  | US$ | 1,019 |  |  | N/A |  | US$ | 1,019 |  |
| Amazon.com Inc | - | 〃 |  | - |  | US$ | 1,018 |  |  | N/A |  | US$ | 1,018 |  |
| Toyota Motor Finance Netherlands BV | - | 〃 |  | - |  | US$ | 1,011 |  |  | N/A |  | US$ | 1,011 |  |
| Corp Nacional del Cobre de Chile | - | 〃 |  | - |  | US$ | 1,011 |  |  | N/A |  | US$ | 1,011 |  |
| Republic Services Inc | - | 〃 |  | - |  | US$ | 1,009 |  |  | N/A |  | US$ | 1,009 |  |
| Commonwealth Edison Co | - | 〃 |  | - |  | US$ | 1,007 |  |  | N/A |  | US$ | 1,007 |  |
| Kimco Realty Corp | - | 〃 |  | - |  | US$ | 1,007 |  |  | N/A |  | US$ | 1,007 |  |
| African Development Bank | - | 〃 |  | - |  | US$ | 1,003 |  |  | N/A |  | US$ | 1,003 |  |
| UBS AG/Stamford CT | - | 〃 |  | - |  | US$ | 1,001 |  |  | N/A |  | US$ | 1,001 |  |
| Gilead Sciences Inc | - | 〃 |  | - |  | US$ | 998 |  |  | N/A |  | US$ | 998 |  |
| MetLife Inc | - | 〃 |  | - |  | US$ | 996 |  |  | N/A |  | US$ | 996 |  |
| BBVA USA | - | 〃 |  | - |  | US$ | 992 |  |  | N/A |  | US$ | 992 |  |
| British Airways 2013-1 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 988 |  |  | N/A |  | US$ | 988 |  |
| Marsh & McLennan Cos Inc | - | 〃 |  | - |  | US$ | 979 |  |  | N/A |  | US$ | 979 |  |
| Georgia-Pacific LLC | - | 〃 |  | - |  | US$ | 925 |  |  | N/A |  | US$ | 925 |  |
| Mitsubishi UFJ Lease & Finance Co Ltd | - | 〃 |  | - |  | US$ | 906 |  |  | N/A |  | US$ | 906 |  |
| Lockheed Martin Corp | - | 〃 |  | - |  | US$ | 905 |  |  | N/A |  | US$ | 905 |  |
| MassMutual Global Funding II | - | 〃 |  | - |  | US$ | 903 |  |  | N/A |  | US$ | 903 |  |
| CA Inc | - | 〃 |  | - |  | US$ | 900 |  |  | N/A |  | US$ | 900 |  |
| CBS Corp | - | 〃 |  | - |  | US$ | 887 |  |  | N/A |  | US$ | 887 |  |
| Coca-Cola Femsa SAB de CV | - | 〃 |  | - |  | US$ | 878 |  |  | N/A |  | US$ | 878 |  |
| CNOOC Finance 2011 Ltd | - | 〃 |  | - |  | US$ | 866 |  |  | N/A |  | US$ | 866 |  |
| Viterra Inc | - | 〃 |  | - |  | US$ | 843 |  |  | N/A |  | US$ | 843 |  |

(Continued)

- 76 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | ONEOK Partners LP | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 824 |  |  | N/A |  | US$ | 824 |  |
| Sinopec Capital 2013 Ltd | - | 〃 |  | - |  | US$ | 814 |  |  | N/A |  | US$ | 814 |  |
| Nationwide Financial Services Inc | - | 〃 |  | - |  | US$ | 779 |  |  | N/A |  | US$ | 779 |  |
| AXIS Specialty Finance LLC | - | 〃 |  | - |  | US$ | 762 |  |  | N/A |  | US$ | 762 |  |
| PayPal Holdings Inc | - | 〃 |  | - |  | US$ | 755 |  |  | N/A |  | US$ | 755 |  |
| Pinnacle West Capital Corp | - | 〃 |  | - |  | US$ | 751 |  |  | N/A |  | US$ | 751 |  |
| Warner Media LLC | - | 〃 |  | - |  | US$ | 742 |  |  | N/A |  | US$ | 742 |  |
| BNZ International Funding Ltd/London | - | 〃 |  | - |  | US$ | 724 |  |  | N/A |  | US$ | 724 |  |
| BAE Systems Holdings Inc | - | 〃 |  | - |  | US$ | 705 |  |  | N/A |  | US$ | 705 |  |
| Phillips 66 | - | 〃 |  | - |  | US$ | 705 |  |  | N/A |  | US$ | 705 |  |
| Southern California Gas Co | - | 〃 |  | - |  | US$ | 704 |  |  | N/A |  | US$ | 704 |  |
| Aon Corp | - | 〃 |  | - |  | US$ | 665 |  |  | N/A |  | US$ | 665 |  |
| Digital Realty Trust LP | - | 〃 |  | - |  | US$ | 657 |  |  | N/A |  | US$ | 657 |  |
| Ohio Power Co | - | 〃 |  | - |  | US$ | 636 |  |  | N/A |  | US$ | 636 |  |
| Fifth Third Bank/Cincinnati OH | - | 〃 |  | - |  | US$ | 635 |  |  | N/A |  | US$ | 635 |  |
| OneBeacon US Holdings Inc | - | 〃 |  | - |  | US$ | 627 |  |  | N/A |  | US$ | 627 |  |
| Norfolk Southern Railway Co | - | 〃 |  | - |  | US$ | 621 |  |  | N/A |  | US$ | 621 |  |
| RBC USA Holdco Corp | - | 〃 |  | - |  | US$ | 614 |  |  | N/A |  | US$ | 614 |  |
| Aptiv Corp | - | 〃 |  | - |  | US$ | 609 |  |  | N/A |  | US$ | 609 |  |
| Toledo Edison Co/The | - | 〃 |  | - |  | US$ | 609 |  |  | N/A |  | US$ | 609 |  |
| Pioneer Natural Resources Co | - | 〃 |  | - |  | US$ | 608 |  |  | N/A |  | US$ | 608 |  |
| American Water Capital Corp | - | 〃 |  | - |  | US$ | 603 |  |  | N/A |  | US$ | 603 |  |
| Nissan Motor Acceptance Corp | - | 〃 |  | - |  | US$ | 600 |  |  | N/A |  | US$ | 600 |  |
| Evergy Inc | - | 〃 |  | - |  | US$ | 593 |  |  | N/A |  | US$ | 593 |  |
| ViacomCBS Inc | - | 〃 |  | - |  | US$ | 588 |  |  | N/A |  | US$ | 588 |  |
| Duke Energy Progress LLC | - | 〃 |  | - |  | US$ | 575 |  |  | N/A |  | US$ | 575 |  |
| Swedbank AB | - | 〃 |  | - |  | US$ | 575 |  |  | N/A |  | US$ | 575 |  |
| Continental Airlines 2007-1 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 572 |  |  | N/A |  | US$ | 572 |  |
| ABC Inc | - | 〃 |  | - |  | US$ | 550 |  |  | N/A |  | US$ | 550 |  |
| Juniper Networks Inc | - | 〃 |  | - |  | US$ | 541 |  |  | N/A |  | US$ | 541 |  |
| Amgen Inc | - | 〃 |  | - |  | US$ | 541 |  |  | N/A |  | US$ | 541 |  |
| Ingersoll-Rand Global Holding Co Ltd | - | 〃 |  | - |  | US$ | 530 |  |  | N/A |  | US$ | 530 |  |
| Aflac Inc | - | 〃 |  | - |  | US$ | 525 |  |  | N/A |  | US$ | 525 |  |
| Regency Centers Corp | - | 〃 |  | - |  | US$ | 521 |  |  | N/A |  | US$ | 521 |  |
| salesforce.com Inc | - | 〃 |  | - |  | US$ | 519 |  |  | N/A |  | US$ | 519 |  |
| TTX Co | - | 〃 |  | - |  | US$ | 511 |  |  | N/A |  | US$ | 511 |  |
| Nomura Holdings Inc | - | 〃 |  | - |  | US$ | 504 |  |  | N/A |  | US$ | 504 |  |
| Hanwha Energy USA Holdings Corp | - | 〃 |  | - |  | US$ | 502 |  |  | N/A |  | US$ | 502 |  |
| PNC Financial Services Group Inc/The | - | 〃 |  | - |  | US$ | 502 |  |  | N/A |  | US$ | 502 |  |
| Caterpillar Financial Services Corp | - | 〃 |  | - |  | US$ | 502 |  |  | N/A |  | US$ | 502 |  |
| Danone SA | - | 〃 |  | - |  | US$ | 500 |  |  | N/A |  | US$ | 500 |  |
| National Oilwell Varco Inc | - | 〃 |  | - |  | US$ | 495 |  |  | N/A |  | US$ | 495 |  |
| Duke Energy Carolinas LLC | - | 〃 |  | - |  | US$ | 465 |  |  | N/A |  | US$ | 465 |  |
| BAT International Finance PLC | - | 〃 |  | - |  | US$ | 462 |  |  | N/A |  | US$ | 462 |  |
| United Overseas Bank Ltd | - | 〃 |  | - |  | US$ | 462 |  |  | N/A |  | US$ | 462 |  |
| Narragansett Electric Co/The | - | 〃 |  | - |  | US$ | 452 |  |  | N/A |  | US$ | 452 |  |
| Duke Realty LP | - | 〃 |  | - |  | US$ | 425 |  |  | N/A |  | US$ | 425 |  |
| Liberty Property LP | - | 〃 |  | - |  | US$ | 417 |  |  | N/A |  | US$ | 417 |  |
| Boston Properties LP | - | 〃 |  | - |  | US$ | 413 |  |  | N/A |  | US$ | 413 |  |
| Newmont Goldcorp Corp | - | 〃 |  | - |  | US$ | 408 |  |  | N/A |  | US$ | 408 |  |
| Eaton Electric Holdings LLC | - | 〃 |  | - |  | US$ | 406 |  |  | N/A |  | US$ | 406 |  |
| Comerica Bank | - | 〃 |  | - |  | US$ | 405 |  |  | N/A |  | US$ | 405 |  |

(Continued)

- 77 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Southern Power Co | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 404 |  |  | N/A |  | US$ | 404 |  |
| Canadian Pacific Railway Co | - | 〃 |  | - |  | US$ | 400 |  |  | N/A |  | US$ | 400 |  |
| Fidelity National Information Services Inc | - | 〃 |  | - |  | US$ | 399 |  |  | N/A |  | US$ | 399 |  |
| AXA Equitable Holdings Inc | - | 〃 |  | - |  | US$ | 393 |  |  | N/A |  | US$ | 393 |  |
| Metropolitan Edison Co | - | 〃 |  | - |  | US$ | 388 |  |  | N/A |  | US$ | 388 |  |
| StanCorp Financial Group Inc | - | 〃 |  | - |  | US$ | 386 |  |  | N/A |  | US$ | 386 |  |
| Principal Financial Group Inc | - | 〃 |  | - |  | US$ | 359 |  |  | N/A |  | US$ | 359 |  |
| Continental Airlines 2000-1 Class A-1 Pass Through Trust | - | 〃 |  | - |  | US$ | 312 |  |  | N/A |  | US$ | 312 |  |
| Chubb INA Holdings Inc | - | 〃 |  | - |  | US$ | 308 |  |  | N/A |  | US$ | 308 |  |
| America Movil SAB de CV | - | 〃 |  | - |  | US$ | 307 |  |  | N/A |  | US$ | 307 |  |
| Alibaba Group Holding Ltd | - | 〃 |  | - |  | US$ | 306 |  |  | N/A |  | US$ | 306 |  |
| CommonSpirit Health | - | 〃 |  | - |  | US$ | 303 |  |  | N/A |  | US$ | 303 |  |
| Schlumberger Finance Canada Ltd | - | 〃 |  | - |  | US$ | 300 |  |  | N/A |  | US$ | 300 |  |
| Manufacturers & Traders Trust Co | - | 〃 |  | - |  | US$ | 300 |  |  | N/A |  | US$ | 300 |  |
| Eli Lilly & Co | - | 〃 |  | - |  | US$ | 299 |  |  | N/A |  | US$ | 299 |  |
| Home Depot Inc/The | - | 〃 |  | - |  | US$ | 284 |  |  | N/A |  | US$ | 284 |  |
| Southern Natural Gas Co LLC / Southern Natural Issuing Corp | - | 〃 |  | - |  | US$ | 282 |  |  | N/A |  | US$ | 282 |  |
| Archer-Daniels-Midland Co | - | 〃 |  | - |  | US$ | 258 |  |  | N/A |  | US$ | 258 |  |
| Bank of America NA | - | 〃 |  | - |  | US$ | 257 |  |  | N/A |  | US$ | 257 |  |
| Grupo Bimbo SAB de CV | - | 〃 |  | - |  | US$ | 252 |  |  | N/A |  | US$ | 252 |  |
| Aon PLC | - | 〃 |  | - |  | US$ | 248 |  |  | N/A |  | US$ | 248 |  |
| Telstra Corp Ltd | - | 〃 |  | - |  | US$ | 209 |  |  | N/A |  | US$ | 209 |  |
| US Airways 2013-1 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 209 |  |  | N/A |  | US$ | 209 |  |
| Halliburton Co | - | 〃 |  | - |  | US$ | 208 |  |  | N/A |  | US$ | 208 |  |
| Waste Management Inc | - | 〃 |  | - |  | US$ | 207 |  |  | N/A |  | US$ | 207 |  |
| QNB Finance Ltd | - | 〃 |  | - |  | US$ | 207 |  |  | N/A |  | US$ | 207 |  |
| WestRock MWV LLC | - | 〃 |  | - |  | US$ | 201 |  |  | N/A |  | US$ | 201 |  |
| Glencore Funding LLC | - | 〃 |  | - |  | US$ | 200 |  |  | N/A |  | US$ | 200 |  |
| Nucor Corp | - | 〃 |  | - |  | US$ | 185 |  |  | N/A |  | US$ | 185 |  |
| American Airlines 2011-1 Class A Pass Through Trust | - | 〃 |  | - |  | US$ | 111 |  |  | N/A |  | US$ | 111 |  |
| Wells Fargo & Co | - | Financial assets at amortized cost |  | - |  | US$ | 160,098 |  |  | N/A |  | US$ | 161,794 |  |
| JPMorgan Chase & Co. | - | 〃 |  | - |  | US$ | 84,967 |  |  | N/A |  | US$ | 85,578 |  |
| Industrial and Commercial Bank of China | - | 〃 |  | - |  | US$ | 9,996 |  |  | N/A |  | US$ | 10,022 |  |
| Government bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| United States Treasury Note/Bond | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 419,942 |  |  | N/A |  | US$ | 419,942 |  |
| Abu Dhabi Government International Bond | - | 〃 |  | - |  | US$ | 3,501 |  |  | N/A |  | US$ | 3,501 |  |
| United States Treasury Inflation Indexed Bonds | - | 〃 |  | - |  | US$ | 2,830 |  |  | N/A |  | US$ | 2,830 |  |
| Qatar Government International Bond | - | 〃 |  | - |  | US$ | 1,372 |  |  | N/A |  | US$ | 1,372 |  |
| Agency bonds/Agency mortgage-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Freddie Mac Multifamily Structured Pass Through Certificates | - | Financial assets at fair value through Profit or Loss |  | - |  | US$ | 1,365 |  |  | N/A |  | US$ | 1,365 |  |
| Fannie Mae Pool | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 761,352 |  |  | N/A |  | US$ | 761,352 |  |
| Fannie Mae REMICS | - | 〃 |  | - |  | US$ | 176,379 |  |  | N/A |  | US$ | 176,379 |  |
| Freddie Mac REMICS | - | 〃 |  | - |  | US$ | 164,994 |  |  | N/A |  | US$ | 164,994 |  |
| Freddie Mac Gold Pool | - | 〃 |  | - |  | US$ | 164,081 |  |  | N/A |  | US$ | 164,081 |  |
| Ginnie Mae II Pool | - | 〃 |  | - |  | US$ | 152,833 |  |  | N/A |  | US$ | 152,833 |  |
| Freddie Mac Pool | - | 〃 |  | - |  | US$ | 129,835 |  |  | N/A |  | US$ | 129,835 |  |
| Fannie Mae or Freddie Mac | - | 〃 |  | - |  | US$ | 56,856 |  |  | N/A |  | US$ | 56,856 |  |
| Government National Mortgage Association | - | 〃 |  | - |  | US$ | 54,891 |  |  | N/A |  | US$ | 54,891 |  |
| Ginnie Mae | - | 〃 |  | - |  | US$ | 33,108 |  |  | N/A |  | US$ | 33,108 |  |

(Continued)

- 78 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Fannie Mae-Aces | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 21,409 |  |  | N/A |  | US$ | 21,409 |  |
| Freddie Mac Strips | - | 〃 |  | - |  | US$ | 3,041 |  |  | N/A |  | US$ | 3,041 |  |
| Federal Home Loan Bank Discount Notes | - | 〃 |  | - |  | US$ | 2,696 |  |  | N/A |  | US$ | 2,696 |  |
| Freddie Mac Multifamily Structured Pass Through Certificates | - | 〃 |  | - |  | US$ | 2,160 |  |  | N/A |  | US$ | 2,160 |  |
| Korea Hydro & Nuclear Power Co Ltd | - | 〃 |  | - |  | US$ | 1,970 |  |  | N/A |  | US$ | 1,970 |  |
| Federal Farm Credit Banks Funding Corp | - | 〃 |  | - |  | US$ | 1,099 |  |  | N/A |  | US$ | 1,099 |  |
| Denver City & County Housing Authority | - | 〃 |  | - |  | US$ | 996 |  |  | N/A |  | US$ | 996 |  |
| Ginnie Mae I Pool | - | 〃 |  | - |  | US$ | 970 |  |  | N/A |  | US$ | 970 |  |
| FHLMC-GNMA | - | 〃 |  | - |  | US$ | 860 |  |  | N/A |  | US$ | 860 |  |
| Oregon Health & Science University | - | 〃 |  | - |  | US$ | 789 |  |  | N/A |  | US$ | 789 |  |
| NCUA Guaranteed Notes Trust 2010-R2 | - | 〃 |  | - |  | US$ | 668 |  |  | N/A |  | US$ | 668 |  |
| FRESB 2019-SB61 Mortgage Trust | - | 〃 |  | - |  | US$ | 667 |  |  | N/A |  | US$ | 667 |  |
| Freddie Mac Non Gold Pool | - | 〃 |  | - |  | US$ | 499 |  |  | N/A |  | US$ | 499 |  |
| FRESB 2019-SB60 Mortgage Trust | - | 〃 |  | - |  | US$ | 415 |  |  | N/A |  | US$ | 415 |  |
| NCUA Guaranteed Notes Trust 2010-R1 | - | 〃 |  | - |  | US$ | 222 |  |  | N/A |  | US$ | 222 |  |
| Fannie Mae Benchmark REMIC | - | 〃 |  | - |  | US$ | 116 |  |  | N/A |  | US$ | 116 |  |
| Asset-backed securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Hyundai Auto Receivables Trust 2017-A | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 9,925 |  |  | N/A |  | US$ | 9,925 |  |
| Citibank Credit Card Issuance Trust | - | 〃 |  | - |  | US$ | 7,321 |  |  | N/A |  | US$ | 7,321 |  |
| Citigroup Commercial Mortgage Trust 2014-GC21 | - | 〃 |  | - |  | US$ | 7,036 |  |  | N/A |  | US$ | 7,036 |  |
| CGDBB Commercial Mortgage Trust 2017-BIOC | - | 〃 |  | - |  | US$ | 6,845 |  |  | N/A |  | US$ | 6,845 |  |
| Benchmark 2019-B11 Mortgage Trust | - | 〃 |  | - |  | US$ | 6,248 |  |  | N/A |  | US$ | 6,248 |  |
| Ford Credit Auto Owner Trust 2017-A | - | 〃 |  | - |  | US$ | 6,084 |  |  | N/A |  | US$ | 6,084 |  |
| Wells Fargo Commercial Mortgage Trust 2016-C35 | - | 〃 |  | - |  | US$ | 6,075 |  |  | N/A |  | US$ | 6,075 |  |
| UBS-Barclays Commercial Mortgage Trust 2012-C2 | - | 〃 |  | - |  | US$ | 6,070 |  |  | N/A |  | US$ | 6,070 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2016-C29 | - | 〃 |  | - |  | US$ | 6,041 |  |  | N/A |  | US$ | 6,041 |  |
| Ford Credit Auto Owner Trust 2016-REV1 | - | 〃 |  | - |  | US$ | 6,022 |  |  | N/A |  | US$ | 6,022 |  |
| CD 2019-CD8 Mortgage Trust | - | 〃 |  | - |  | US$ | 5,924 |  |  | N/A |  | US$ | 5,924 |  |
| Wells Fargo Commercial Mortgage Trust 2019-C53 | - | 〃 |  | - |  | US$ | 5,678 |  |  | N/A |  | US$ | 5,678 |  |
| WFRBS Commercial Mortgage Trust 2013-C13 | - | 〃 |  | - |  | US$ | 5,648 |  |  | N/A |  | US$ | 5,648 |  |
| BBCMS 2018-TALL Mortgage Trust | - | 〃 |  | - |  | US$ | 5,472 |  |  | N/A |  | US$ | 5,472 |  |
| COMM 2015-CCRE24 Mortgage Trust | - | 〃 |  | - |  | US$ | 5,238 |  |  | N/A |  | US$ | 5,238 |  |
| Hyundai Auto Lease Securitization Trust 2018-A | - | 〃 |  | - |  | US$ | 5,079 |  |  | N/A |  | US$ | 5,079 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2016-C30 | - | 〃 |  | - |  | US$ | 5,030 |  |  | N/A |  | US$ | 5,030 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2013-C10 | - | 〃 |  | - |  | US$ | 5,012 |  |  | N/A |  | US$ | 5,012 |  |
| Ford Credit Auto Owner Trust 2015-REV1 | - | 〃 |  | - |  | US$ | 4,922 |  |  | N/A |  | US$ | 4,922 |  |
| MRCD 2019-MARK Mortgage Trust | - | 〃 |  | - |  | US$ | 4,705 |  |  | N/A |  | US$ | 4,705 |  |
| BANK 2019-BNK22 | - | 〃 |  | - |  | US$ | 4,518 |  |  | N/A |  | US$ | 4,518 |  |
| Hyundai Auto Receivables Trust 2016-B | - | 〃 |  | - |  | US$ | 4,502 |  |  | N/A |  | US$ | 4,502 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2013-C7 | - | 〃 |  | - |  | US$ | 4,263 |  |  | N/A |  | US$ | 4,263 |  |
| Mercedes-Benz Auto Lease Trust 2019-B | - | 〃 |  | - |  | US$ | 4,241 |  |  | N/A |  | US$ | 4,241 |  |
| JPMBB Commercial Mortgage Securities Trust 2015-C28 | - | 〃 |  | - |  | US$ | 4,180 |  |  | N/A |  | US$ | 4,180 |  |
| Hyundai Auto Receivables Trust 2016-A | - | 〃 |  | - |  | US$ | 4,178 |  |  | N/A |  | US$ | 4,178 |  |
| GM Financial Consumer Automobile Receivables Trust 2018-1 | - | 〃 |  | - |  | US$ | 4,164 |  |  | N/A |  | US$ | 4,164 |  |
| UBS Commercial Mortgage Trust 2018-C10 | - | 〃 |  | - |  | US$ | 4,163 |  |  | N/A |  | US$ | 4,163 |  |
| JPMCC Commercial Mortgage Securities Trust 2017-JP7 | - | 〃 |  | - |  | US$ | 4,151 |  |  | N/A |  | US$ | 4,151 |  |
| BANK 2017-BNK6 | - | 〃 |  | - |  | US$ | 4,107 |  |  | N/A |  | US$ | 4,107 |  |
| BANK 2017-BNK5 | - | 〃 |  | - |  | US$ | 4,104 |  |  | N/A |  | US$ | 4,104 |  |
| BANK 2019-BNK17 | - | 〃 |  | - |  | US$ | 4,099 |  |  | N/A |  | US$ | 4,099 |  |
| BX Commercial Mortgage Trust 2018-IND | - | 〃 |  | - |  | US$ | 3,992 |  |  | N/A |  | US$ | 3,992 |  |
| American Express Credit Account Master Trust | - | 〃 |  | - |  | US$ | 3,804 |  |  | N/A |  | US$ | 3,804 |  |

(Continued)

- 79 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | Enterprise Fleet Financing 2019-2 LLC | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 3,763 |  |  | N/A |  | US$ | 3,763 |  |
| Barclays Commercial Mortgage Trust 2019-C5 | - | 〃 |  | - |  | US$ | 3,720 |  |  | N/A |  | US$ | 3,720 |  |
| Citigroup Commercial Mortgage Trust 2019-C7 | - | 〃 |  | - |  | US$ | 3,685 |  |  | N/A |  | US$ | 3,685 |  |
| BANK 2019-BNK23 | - | 〃 |  | - |  | US$ | 3,640 |  |  | N/A |  | US$ | 3,640 |  |
| JP Morgan Chase Commercial Mortgage Securities Trust 2012-LC9 | - | 〃 |  | - |  | US$ | 3,381 |  |  | N/A |  | US$ | 3,381 |  |
| UBS-Barclays Commercial Mortgage Trust 2013-C6 | - | 〃 |  | - |  | US$ | 3,327 |  |  | N/A |  | US$ | 3,327 |  |
| GS Mortgage Securities Trust 2012-GC6 | - | 〃 |  | - |  | US$ | 3,194 |  |  | N/A |  | US$ | 3,194 |  |
| Ford Credit Auto Lease Trust 2019-B | - | 〃 |  | - |  | US$ | 3,122 |  |  | N/A |  | US$ | 3,122 |  |
| Toyota Auto Receivables 2017-A Owner Trust | - | 〃 |  | - |  | US$ | 3,108 |  |  | N/A |  | US$ | 3,108 |  |
| Nissan Auto Lease Trust 2017-B | - | 〃 |  | - |  | US$ | 3,072 |  |  | N/A |  | US$ | 3,072 |  |
| UBS-Barclays Commercial Mortgage Trust 2012-C3 | - | 〃 |  | - |  | US$ | 3,061 |  |  | N/A |  | US$ | 3,061 |  |
| Toyota Auto Receivables 2018-D Owner Trust | - | 〃 |  | - |  | US$ | 3,059 |  |  | N/A |  | US$ | 3,059 |  |
| J.P. Morgan Chase Commercial Mortgage Securities Trust 2016-WIKI | - | 〃 |  | - |  | US$ | 3,020 |  |  | N/A |  | US$ | 3,020 |  |
| Wells Fargo Commercial Mortgage Trust 2017-C40 | - | 〃 |  | - |  | US$ | 3,017 |  |  | N/A |  | US$ | 3,017 |  |
| Citigroup Commercial Mortgage Trust 2016-P5 | - | 〃 |  | - |  | US$ | 3,008 |  |  | N/A |  | US$ | 3,008 |  |
| GS Mortgage Securities Corp Trust 2018-RIVR | - | 〃 |  | - |  | US$ | 3,003 |  |  | N/A |  | US$ | 3,003 |  |
| GM Financial Consumer Automobile Receivables Trust 2017-2 | - | 〃 |  | - |  | US$ | 2,995 |  |  | N/A |  | US$ | 2,995 |  |
| Morgan Stanley Capital I Trust 2017-H1 | - | 〃 |  | - |  | US$ | 2,966 |  |  | N/A |  | US$ | 2,966 |  |
| Hyundai Auto Receivables Trust 2018-A | - | 〃 |  | - |  | US$ | 2,915 |  |  | N/A |  | US$ | 2,915 |  |
| Nissan Auto Lease Trust 2019-B | - | 〃 |  | - |  | US$ | 2,885 |  |  | N/A |  | US$ | 2,885 |  |
| Citigroup Commercial Mortgage Trust 2016-C3 | - | 〃 |  | - |  | US$ | 2,760 |  |  | N/A |  | US$ | 2,760 |  |
| GS Mortgage Securities Trust 2013-GCJ12 | - | 〃 |  | - |  | US$ | 2,660 |  |  | N/A |  | US$ | 2,660 |  |
| GS Mortgage Securities Trust 2011-GC3 | - | 〃 |  | - |  | US$ | 2,626 |  |  | N/A |  | US$ | 2,626 |  |
| BANK 2019-BNK24 | - | 〃 |  | - |  | US$ | 2,606 |  |  | N/A |  | US$ | 2,606 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2012-C6 | - | 〃 |  | - |  | US$ | 2,536 |  |  | N/A |  | US$ | 2,536 |  |
| ARI Fleet Lease Trust 2019-A | - | 〃 |  | - |  | US$ | 2,408 |  |  | N/A |  | US$ | 2,408 |  |
| Nissan Auto Lease Trust 2019-A | - | 〃 |  | - |  | US$ | 2,350 |  |  | N/A |  | US$ | 2,350 |  |
| UBS Commercial Mortgage Trust 2018-C11 | - | 〃 |  | - |  | US$ | 2,179 |  |  | N/A |  | US$ | 2,179 |  |
| Morgan Stanley Capital I Trust 2018-H3 | - | 〃 |  | - |  | US$ | 2,134 |  |  | N/A |  | US$ | 2,134 |  |
| BENCHMARK 2018-B4 | - | 〃 |  | - |  | US$ | 2,125 |  |  | N/A |  | US$ | 2,125 |  |
| COMM 2013-CCRE12 Mortgage Trust | - | 〃 |  | - |  | US$ | 2,112 |  |  | N/A |  | US$ | 2,112 |  |
| Ford Credit Auto Owner Trust 2019-A | - | 〃 |  | - |  | US$ | 2,088 |  |  | N/A |  | US$ | 2,088 |  |
| Citigroup Commercial Mortgage Trust 2017-P8 | - | 〃 |  | - |  | US$ | 2,059 |  |  | N/A |  | US$ | 2,059 |  |
| JPMDB Commercial Mortgage Securities Trust 2017-C7 | - | 〃 |  | - |  | US$ | 2,044 |  |  | N/A |  | US$ | 2,044 |  |
| WFRBS Commercial Mortgage Trust 2013-C17 | - | 〃 |  | - |  | US$ | 2,044 |  |  | N/A |  | US$ | 2,044 |  |
| JPMBB Commercial Mortgage Securities Trust 2014-C19 | - | 〃 |  | - |  | US$ | 2,032 |  |  | N/A |  | US$ | 2,032 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2016-C31 | - | 〃 |  | - |  | US$ | 2,027 |  |  | N/A |  | US$ | 2,027 |  |
| GM Financial Consumer Automobile 2017-1 | - | 〃 |  | - |  | US$ | 2,001 |  |  | N/A |  | US$ | 2,001 |  |
| COMM 2014-CCRE17 Mortgage Trust | - | 〃 |  | - |  | US$ | 2,000 |  |  | N/A |  | US$ | 2,000 |  |
| GS Mortgage Securities Trust 2014-GC22 | - | 〃 |  | - |  | US$ | 1,961 |  |  | N/A |  | US$ | 1,961 |  |
| Mercedes-Benz Auto Lease Trust 2018-B | - | 〃 |  | - |  | US$ | 1,961 |  |  | N/A |  | US$ | 1,961 |  |
| GS Mortgage Securities Trust 2015-GC34 | - | 〃 |  | - |  | US$ | 1,905 |  |  | N/A |  | US$ | 1,905 |  |
| Chesapeake Funding II LLC | - | 〃 |  | - |  | US$ | 1,903 |  |  | N/A |  | US$ | 1,903 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2013-C8 | - | 〃 |  | - |  | US$ | 1,831 |  |  | N/A |  | US$ | 1,831 |  |
| Citigroup Commercial Mortgage Trust 2015-GC35 | - | 〃 |  | - |  | US$ | 1,791 |  |  | N/A |  | US$ | 1,791 |  |
| Morgan Stanley Capital I Trust 2019-H6 | - | 〃 |  | - |  | US$ | 1,772 |  |  | N/A |  | US$ | 1,772 |  |
| GM Financial Automobile Leasing Trust 2019-1 | - | 〃 |  | - |  | US$ | 1,647 |  |  | N/A |  | US$ | 1,647 |  |
| JPMBB Commercial Mortgage Securities Trust 2013-C12 | - | 〃 |  | - |  | US$ | 1,544 |  |  | N/A |  | US$ | 1,544 |  |
| Wells Fargo Commercial Mortgage Trust 2015-LC20 | - | 〃 |  | - |  | US$ | 1,498 |  |  | N/A |  | US$ | 1,498 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2015-C24 | - | 〃 |  | - |  | US$ | 1,492 |  |  | N/A |  | US$ | 1,492 |  |
| Citigroup Commercial Mortgage Trust 2015-GC27 | - | 〃 |  | - |  | US$ | 1,458 |  |  | N/A |  | US$ | 1,458 |  |

(Continued)

- 80 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | WFRBS Commercial Mortgage Trust 2013-C14 | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 1,454 |  |  | N/A |  | US$ | 1,454 |  |
| GS Mortgage Securities Trust 2014-GC24 | - | 〃 |  | - |  | US$ | 1,452 |  |  | N/A |  | US$ | 1,452 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2013-C12 | - | 〃 |  | - |  | US$ | 1,438 |  |  | N/A |  | US$ | 1,438 |  |
| Honda Auto Receivables 2017-3 Owner Trust | - | 〃 |  | - |  | US$ | 1,425 |  |  | N/A |  | US$ | 1,425 |  |
| Wells Fargo Commercial Mortgage Trust 2016-C36 | - | 〃 |  | - |  | US$ | 1,403 |  |  | N/A |  | US$ | 1,403 |  |
| Benchmark 2019-B14 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,381 |  |  | N/A |  | US$ | 1,381 |  |
| Hertz Fleet Lease Funding LP | - | 〃 |  | - |  | US$ | 1,372 |  |  | N/A |  | US$ | 1,372 |  |
| Hyundai Auto Receivables Trust 2019-B | - | 〃 |  | - |  | US$ | 1,286 |  |  | N/A |  | US$ | 1,286 |  |
| Wells Fargo Commercial Mortgage Trust 2012-LC5 | - | 〃 |  | - |  | US$ | 1,268 |  |  | N/A |  | US$ | 1,268 |  |
| COMM 2013-LC6 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,238 |  |  | N/A |  | US$ | 1,238 |  |
| GS Mortgage Securities Trust 2019-GSA1 | - | 〃 |  | - |  | US$ | 1,233 |  |  | N/A |  | US$ | 1,233 |  |
| GS Mortgage Securities Corp II | - | 〃 |  | - |  | US$ | 1,226 |  |  | N/A |  | US$ | 1,226 |  |
| GM Financial Automobile Leasing Trust 2019-4 | - | 〃 |  | - |  | US$ | 1,194 |  |  | N/A |  | US$ | 1,194 |  |
| JPMDB Commercial Mortgage Securities Trust 2016-C2 | - | 〃 |  | - |  | US$ | 1,192 |  |  | N/A |  | US$ | 1,192 |  |
| Benchmark 2019-B9 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,160 |  |  | N/A |  | US$ | 1,160 |  |
| Morgan Stanley Capital I Trust 2016-UB11 | - | 〃 |  | - |  | US$ | 1,105 |  |  | N/A |  | US$ | 1,105 |  |
| JPMCC Commercial Mortgage Securities Trust 2017-JP5 | - | 〃 |  | - |  | US$ | 1,073 |  |  | N/A |  | US$ | 1,073 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2013-C13 | - | 〃 |  | - |  | US$ | 1,048 |  |  | N/A |  | US$ | 1,048 |  |
| UBS-Barclays Commercial Mortgage Trust 2013-C5 | - | 〃 |  | - |  | US$ | 1,032 |  |  | N/A |  | US$ | 1,032 |  |
| COMM 2015-PC1 Mortgage Trust | - | 〃 |  | - |  | US$ | 1,032 |  |  | N/A |  | US$ | 1,032 |  |
| WFRBS Commercial Mortgage Trust 2011-C4 | - | 〃 |  | - |  | US$ | 1,027 |  |  | N/A |  | US$ | 1,027 |  |
| Ford Credit Auto Lease Trust 2019-A | - | 〃 |  | - |  | US$ | 1,013 |  |  | N/A |  | US$ | 1,013 |  |
| BMW Vehicle Lease Trust 2019-1 | - | 〃 |  | - |  | US$ | 1,012 |  |  | N/A |  | US$ | 1,012 |  |
| Ford Credit Auto Owner Trust 2017-REV1 | - | 〃 |  | - |  | US$ | 1,012 |  |  | N/A |  | US$ | 1,012 |  |
| Benchmark 2019-B15 Mortgage Trust | - | 〃 |  | - |  | US$ | 998 |  |  | N/A |  | US$ | 998 |  |
| BBCMS MORTGAGE TRUST 2017-C1 | - | 〃 |  | - |  | US$ | 998 |  |  | N/A |  | US$ | 998 |  |
| Citigroup Commercial Mortgage Trust 2013-GC11 | - | 〃 |  | - |  | US$ | 959 |  |  | N/A |  | US$ | 959 |  |
| Citigroup Commercial Mortgage Trust 2014-GC23 | - | 〃 |  | - |  | US$ | 951 |  |  | N/A |  | US$ | 951 |  |
| COMM 2012-CCRE5 Mortgage Trust | - | 〃 |  | - |  | US$ | 918 |  |  | N/A |  | US$ | 918 |  |
| Cantor Commercial Real Estate Lending 2019-CF1 | - | 〃 |  | - |  | US$ | 916 |  |  | N/A |  | US$ | 916 |  |
| 280 Park Avenue 2017-280P Mortgage Trust | - | 〃 |  | - |  | US$ | 830 |  |  | N/A |  | US$ | 830 |  |
| GM Financial Automobile Leasing Trust 2019-2 | - | 〃 |  | - |  | US$ | 823 |  |  | N/A |  | US$ | 823 |  |
| Ford Credit Auto Lease Trust | - | 〃 |  | - |  | US$ | 798 |  |  | N/A |  | US$ | 798 |  |
| GM Financial Automobile Leasing Trust 2018-1 | - | 〃 |  | - |  | US$ | 759 |  |  | N/A |  | US$ | 759 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2015-C20 | - | 〃 |  | - |  | US$ | 759 |  |  | N/A |  | US$ | 759 |  |
| GM Financial Consumer Automobile Receivables Trust 2018-2 | - | 〃 |  | - |  | US$ | 756 |  |  | N/A |  | US$ | 756 |  |
| Toyota Auto Receivables 2016-B Owner Trust | - | 〃 |  | - |  | US$ | 741 |  |  | N/A |  | US$ | 741 |  |
| COMM 2015-CCRE22 Mortgage Trust | - | 〃 |  | - |  | US$ | 720 |  |  | N/A |  | US$ | 720 |  |
| Wells Fargo Commercial Mortgage Trust 2015-NXS3 | - | 〃 |  | - |  | US$ | 703 |  |  | N/A |  | US$ | 703 |  |
| Wells Fargo Commercial Mortgage Trust 2015-C28 | - | 〃 |  | - |  | US$ | 702 |  |  | N/A |  | US$ | 702 |  |
| COMM 2013-CCRE8 Mortgage Trust | - | 〃 |  | - |  | US$ | 701 |  |  | N/A |  | US$ | 701 |  |
| CFCRE Commercial Mortgage Trust 2011-C1 | - | 〃 |  | - |  | US$ | 696 |  |  | N/A |  | US$ | 696 |  |
| GM Financial Automobile Leasing Trust 2019-3 | - | 〃 |  | - |  | US$ | 650 |  |  | N/A |  | US$ | 650 |  |
| Mercedes-Benz Auto Lease Trust 2019-A | - | 〃 |  | - |  | US$ | 620 |  |  | N/A |  | US$ | 620 |  |
| JP Morgan Chase Commercial Mortgage Securities Trust 2012-WLDN | - | 〃 |  | - |  | US$ | 603 |  |  | N/A |  | US$ | 603 |  |
| JPMDB Commercial Mortgage Securities Trust 2019-COR6 | - | 〃 |  | - |  | US$ | 597 |  |  | N/A |  | US$ | 597 |  |
| Citigroup Commercial Mortgage Trust 2014-GC19 | - | 〃 |  | - |  | US$ | 576 |  |  | N/A |  | US$ | 576 |  |
| DBUBS 2011-LC2 Mortgage Trust | - | 〃 |  | - |  | US$ | 510 |  |  | N/A |  | US$ | 510 |  |
| CD 2016-CD2 Mortgage Trust | - | 〃 |  | - |  | US$ | 506 |  |  | N/A |  | US$ | 506 |  |
| Nissan Auto Receivables 2019-C Owner Trust | - | 〃 |  | - |  | US$ | 485 |  |  | N/A |  | US$ | 485 |  |
| Mercedes-Benz Auto Lease Trust 2018-A | - | 〃 |  | - |  | US$ | 482 |  |  | N/A |  | US$ | 482 |  |
| GS Mortgage Securities Trust 2014-GC26 | - | 〃 |  | - |  | US$ | 465 |  |  | N/A |  | US$ | 465 |  |

(Continued)

- 81 -

Held Company Name | Marketable Securities Type and Name | Relationship with the Company | Financial Statement Account | December 31, 2019 | Note
Shares/Units (In Thousands) | Carrying Value (Foreign Currencies in Thousands) | Percentage of Ownership (%) | Fair Value (Foreign Currencies in Thousands)
TSMC Global | GM Financial Consumer Automobile Receivables Trust 2019-3 | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 443 |  |  | N/A |  | US$ | 443 |  |
| Hyundai Auto Lease Securitization Trust 2017-C | - | 〃 |  | - |  | US$ | 410 |  |  | N/A |  | US$ | 410 |  |
| WFRBS Commercial Mortgage Trust 2014-C25 | - | 〃 |  | - |  | US$ | 408 |  |  | N/A |  | US$ | 408 |  |
| Ford Credit Auto Lease Trust 2017-B | - | 〃 |  | - |  | US$ | 380 |  |  | N/A |  | US$ | 380 |  |
| Hyundai Auto Receivables Trust 2015-C | - | 〃 |  | - |  | US$ | 365 |  |  | N/A |  | US$ | 365 |  |
| GM Financial Automobile Leasing Trust 2018-2 | - | 〃 |  | - |  | US$ | 351 |  |  | N/A |  | US$ | 351 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2012-C5 | - | 〃 |  | - |  | US$ | 350 |  |  | N/A |  | US$ | 350 |  |
| COMM 2015-CCRE26 Mortgage Trust | - | 〃 |  | - |  | US$ | 349 |  |  | N/A |  | US$ | 349 |  |
| GM Financial Automobile Leasing Trust 2018-3 | - | 〃 |  | - |  | US$ | 339 |  |  | N/A |  | US$ | 339 |  |
| JPMBB Commercial Mortgage Securities Trust 2015-C31 | - | 〃 |  | - |  | US$ | 325 |  |  | N/A |  | US$ | 325 |  |
| Ford Credit Auto Owner Trust 2017-B | - | 〃 |  | - |  | US$ | 301 |  |  | N/A |  | US$ | 301 |  |
| Toyota Auto Receivables 2018-B Owner Trust | - | 〃 |  | - |  | US$ | 283 |  |  | N/A |  | US$ | 283 |  |
| BMW Vehicle Lease Trust 2017-2 | - | 〃 |  | - |  | US$ | 189 |  |  | N/A |  | US$ | 189 |  |
| COMM 2015-DC1 Mortgage Trust | - | 〃 |  | - |  | US$ | 180 |  |  | N/A |  | US$ | 180 |  |
| Wells Fargo Commercial Mortgage Trust 2015-NXS1 | - | 〃 |  | - |  | US$ | 103 |  |  | N/A |  | US$ | 103 |  |
| Wells Fargo Commercial Mortgage Trust 2015-SG1 | - | 〃 |  | - |  | US$ | 100 |  |  | N/A |  | US$ | 100 |  |
| COMM 2014-CCRE15 Mortgage Trust | - | 〃 |  | - |  | US$ | 46 |  |  | N/A |  | US$ | 46 |  |
| Nissan Auto Receivables 2016-B Owner Trust | - | 〃 |  | - |  | US$ | 36 |  |  | N/A |  | US$ | 36 |  |
| WFRBS Commercial Mortgage Trust 2011-C5 | - | 〃 |  | - |  | US$ | 31 |  |  | N/A |  | US$ | 31 |  |
| GS Mortgage Securities Trust 2010-C2 | - | 〃 |  | - |  | US$ | 21 |  |  | N/A |  | US$ | 21 |  |
| Morgan Stanley Bank of America Merrill Lynch Trust 2014-C18 | - | 〃 |  | - |  | US$ | 20 |  |  | N/A |  | US$ | 20 |  |
| GS Mortgage Securities Trust 2010-C1 | - | 〃 |  | - |  | US$ | 9 |  |  | N/A |  | US$ | 9 |  |
| Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Primavera Capital Fund II L.P. | - | Financial assets at fair value through other comprehensive income |  | - |  | US$ | 78,403 |  |  | 4 |  | US$ | 78,403 |  |
VTAF II | Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Sentelic | - | Financial assets at fair value through other comprehensive income |  | 1,019 |  | US$ | 1,307 |  |  | 4 |  | US$ | 1,307 |  |
| Aether Systems, Inc. | - | 〃 |  | 1,085 |  | US$ | 362 |  |  | 20 |  | US$ | 362 |  |
| 5V Technologies, Inc. | - | 〃 |  | 4 |  |  | - |  |  | 2 |  |  | - |  |
VTAF III | Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| LiquidLeds Lighting Corp. | - | Financial assets at fair value through other comprehensive income |  | 1,952 |  | US$ | 800 |  |  | 14 |  | US$ | 800 |  |
| Neoconix, Inc. | - | 〃 |  | 4,147 |  | US$ | 174 |  |  | - |  | US$ | 174 |  |
Growth Fund | Non-publicly traded equity investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Innovium, Inc. | - | Financial assets at fair value through other comprehensive income |  | 230 |  | US$ | 1,560 |  |  | - |  | US$ | 1,560 |  |
| Innovium, Inc. | - | 〃 |  | 221 |  | US$ | 1,501 |  |  | - |  | US$ | 1,501 |  |
| CNEX Labs, Inc. | - | 〃 |  | 237 |  | US$ | 775 |  |  | - |  | US$ | 775 |  |
| Astera Labs, Inc. | - | 〃 |  | 127 |  | US$ | 250 |  |  | - |  | US$ | 250 |  |

(Concluded)

- 82 -

TABLE 4

Taiwan Semiconductor Manufacturing Company Limited and Investees

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name | Marketable Securities Type and Name | Financial Statement Account | Counter-party | Nature of Relationship | Beginning Balance | Acquisition | Disposal | Ending Balance (Note)
Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Carrying Value | Gain/Loss on Disposal | Shares/Units (In Thousands) | Amount
TSMC | Commercial paper |  |  |  |  |  |  |  |  |  |  |  |  |
| Taiwan Power Company | Financial assets at amortized cost | - | - |  | 180 |  | $ | 1,795,261 |  |  | - |  | $ | - |  |  | 180 |  | $ | 1,800,000 |  | $ | 1,800,000 |  | $ | - |  |  | - |  | $ | - |
| CPC Corporation, Taiwan | 〃 | - | - |  | 50 |  |  | 498,837 |  |  | - |  |  | - |  |  | 50 |  |  | 500,000 |  |  | 50,000 |  |  | - |  |  | - |  |  | - |
| Publicly traded stocks |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Semiconductor Manufacturing International Corporation | Financial assets at fair value through other comprehensive income | - | - |  | 21,105 |  |  | 568,150 |  |  | - |  |  | - |  |  | 21,105 |  |  | 775,282 |  |  | 522,975 |  |  | 252,307 |  |  | - |  |  | - |
TSMC Global | Corporate bond |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Bank of America Corp | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 44,755 |  |  | - |  | US$ | 26,624 |  |  | - |  | US$ | 26,924 |  | US$ | 26,897 |  | US$ | 27 |  |  | - |  | US$ | 46,084 |
| Citigroup Inc | 〃 | - | - |  | - |  | US$ | 28,602 |  |  | - |  | US$ | 27,307 |  |  | - |  | US$ | 21,481 |  | US$ | 21,386 |  | US$ | 95 |  |  | - |  | US$ | 35,512 |
| AbbVie Inc | 〃 | - | - |  | - |  | US$ | 11,504 |  |  | - |  | US$ | 36,780 |  |  | - |  | US$ | 17,687 |  | US$ | 17,576 |  | US$ | 111 |  |  | - |  | US$ | 31,425 |
| AT&T Inc | 〃 | - | - |  | - |  | US$ | 23,123 |  |  | - |  | US$ | 16,412 |  |  | - |  | US$ | 14,343 |  | US$ | 14,218 |  | US$ | 125 |  |  | - |  | US$ | 26,140 |
| Goldman Sachs Group Inc/The | 〃 | - | - |  | - |  | US$ | 17,619 |  |  | - |  | US$ | 12,935 |  |  | - |  | US$ | 5,709 |  | US$ | 5,703 |  | US$ | 6 |  |  | - |  | US$ | 25,789 |
| CVS Health Corp | 〃 | - | - |  | - |  | US$ | 27,238 |  |  | - |  | US$ | 25,647 |  |  | - |  | US$ | 31,861 |  | US$ | 31,310 |  | US$ | 551 |  |  | - |  | US$ | 22,242 |
| Bristol-Myers Squibb Co | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 25,338 |  |  | - |  | US$ | 4,409 |  | US$ | 4,342 |  | US$ | 67 |  |  | - |  | US$ | 21,666 |
| Mitsubishi UFJ Financial Group Inc | 〃 | - | - |  | - |  | US$ | 9,547 |  |  | - |  | US$ | 13,962 |  |  | - |  | US$ | 2,670 |  | US$ | 2,646 |  | US$ | 24 |  |  | - |  | US$ | 21,332 |
| JPMorgan Chase & Co | 〃 | - | - |  | - |  | US$ | 16,577 |  |  | - |  | US$ | 14,544 |  |  | - |  | US$ | 10,973 |  | US$ | 10,974 |  | US$ | (1 | ) |  | - |  | US$ | 20,825 |
| Morgan Stanley | 〃 | - | - |  | - |  | US$ | 19,581 |  |  | - |  | US$ | 17,212 |  |  | - |  | US$ | 16,990 |  | US$ | 16,874 |  | US$ | 116 |  |  | - |  | US$ | 20,421 |
| HSBC Holdings PLC | 〃 | - | - |  | - |  | US$ | 15,571 |  |  | - |  | US$ | 13,265 |  |  | - |  | US$ | 9,205 |  | US$ | 9,074 |  | US$ | 131 |  |  | - |  | US$ | 20,102 |
| Apple Inc | 〃 | - | - |  | - |  | US$ | 12,585 |  |  | - |  | US$ | 10,796 |  |  | - |  | US$ | 3,939 |  | US$ | 3,997 |  | US$ | (58 | ) |  | - |  | US$ | 19,886 |
| Sumitomo Mitsui Financial Group Inc | 〃 | - | - |  | - |  | US$ | 10,008 |  |  | - |  | US$ | 16,956 |  |  | - |  | US$ | 8,327 |  | US$ | 8,288 |  | US$ | 39 |  |  | - |  | US$ | 19,176 |
| Toronto-Dominion Bank/The | 〃 | - | - |  | - |  | US$ | 5,000 |  |  | - |  | US$ | 17,437 |  |  | - |  | US$ | 7,765 |  | US$ | 7,669 |  | US$ | 96 |  |  | - |  | US$ | 15,017 |
| Verizon Communications Inc | 〃 | - | - |  | - |  | US$ | 15,927 |  |  | - |  | US$ | 9,920 |  |  | - |  | US$ | 12,478 |  | US$ | 12,447 |  | US$ | 31 |  |  | - |  | US$ | 14,058 |
| Wells Fargo & Co | 〃 | - | - |  | - |  | US$ | 576 |  |  | - |  | US$ | 11,967 |  |  | - |  | US$ | 813 |  | US$ | 815 |  | US$ | (2 | ) |  | - |  | US$ | 11,864 |
| Morgan Stanley | 〃 | - | - |  | - |  | US$ | 8,928 |  |  | - |  | US$ | 10,113 |  |  | - |  | US$ | 7,610 |  | US$ | 7,463 |  | US$ | 147 |  |  | - |  | US$ | 11,837 |
| Banque Federative du Credit Mutuel SA | 〃 | - | - |  | - |  | US$ | 4,028 |  |  | - |  | US$ | 11,726 |  |  | - |  | US$ | 4,096 |  | US$ | 4,088 |  | US$ | 8 |  |  | - |  | US$ | 11,752 |
| American International Group Inc | 〃 | - | - |  | - |  | US$ | 10,737 |  |  | - |  | US$ | 10,471 |  |  | - |  | US$ | 10,247 |  | US$ | 10,213 |  | US$ | 34 |  |  | - |  | US$ | 11,423 |
| Equifax Inc | 〃 | - | - |  | - |  | US$ | 174 |  |  | - |  | US$ | 10,748 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 11,001 |
| Ryder System Inc | 〃 | - | - |  | - |  | US$ | 4,778 |  |  | - |  | US$ | 11,957 |  |  | - |  | US$ | 6,218 |  | US$ | 6,121 |  | US$ | 97 |  |  | - |  | US$ | 10,892 |
| International Business Machines Corp | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 13,545 |  |  | - |  | US$ | 3,265 |  | US$ | 3,266 |  | US$ | (1 | ) |  | - |  | US$ | 10,414 |
| NextEra Energy Capital Holdings Inc | 〃 | - | - |  | - |  | US$ | 4,706 |  |  | - |  | US$ | 15,881 |  |  | - |  | US$ | 11,397 |  | US$ | 11,366 |  | US$ | 31 |  |  | - |  | US$ | 9,420 |
| Fiserv Inc | 〃 | - | - |  | - |  | US$ | 1,455 |  |  | - |  | US$ | 12,324 |  |  | - |  | US$ | 4,902 |  | US$ | 4,770 |  | US$ | 132 |  |  | - |  | US$ | 9,174 |
| Comcast Corp | 〃 | - | - |  | - |  | US$ | 18,894 |  |  | - |  | US$ | 3,773 |  |  | - |  | US$ | 14,933 |  | US$ | 14,452 |  | US$ | 481 |  |  | - |  | US$ | 8,514 |
| JPMorgan Chase & Co | 〃 | - | - |  | - |  | US$ | 25,423 |  |  | - |  | US$ | 5,887 |  |  | - |  | US$ | 23,845 |  | US$ | 23,737 |  | US$ | 108 |  |  | - |  | US$ | 7,849 |
| Anheuser-Busch InBev Worldwide Inc | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 11,641 |  |  | - |  | US$ | 6,093 |  | US$ | 5,824 |  | US$ | 269 |  |  | - |  | US$ | 6,276 |
| American Express Co | 〃 | - | - |  | - |  | US$ | 4,547 |  |  | - |  | US$ | 10,414 |  |  | - |  | US$ | 9,023 |  | US$ | 8,890 |  | US$ | 133 |  |  | - |  | US$ | 6,239 |
| Walt Disney Co/The | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,719 |  |  | - |  | US$ | 7,387 |  | US$ | 7,428 |  | US$ | (41 | ) |  | - |  | US$ | 3,246 |
| Hyundai Capital America | 〃 | - | - |  | - |  | US$ | 6,644 |  |  | - |  | US$ | 8,783 |  |  | - |  | US$ | 12,403 |  | US$ | 12,333 |  | US$ | 70 |  |  | - |  | US$ | 3,187 |

(Continued)

- 83 -

Company Name | Marketable Securities Type and Name | Financial Statement Account | Counter-party | Nature of Relationship | Beginning Balance | Acquisition | Disposal | Ending Balance (Note)
Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Carrying Value | Gain/Loss on Disposal | Shares/Units (In Thousands) | Amount
TSMC Global | AXA Equitable Holdings Inc | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 5,662 |  |  | - |  | US$ | 6,917 |  |  | - |  | US$ | 12,532 |  | US$ | 12,265 |  | US$ | 267 |  |  | - |  | US$ | 393 |
| Ford Motor Credit Co LLC | 〃 | - | - |  | - |  | US$ | 10,153 |  |  | - |  | US$ | - |  |  | - |  | US$ | 10,252 |  | US$ | 10,454 |  | US$ | (202 | ) |  | - |  | US$ | - |
| European Investment Bank | 〃 | - | - |  | - |  | US$ | 3,903 |  |  | - |  | US$ | 7,177 |  |  | - |  | US$ | 11,181 |  | US$ | 11,123 |  | US$ | 58 |  |  | - |  | US$ | - |
| Wells Fargo & Co | Financial assets at amortized cost | - | - |  | - |  | US$ | 149,941 |  |  | - |  | US$ | 10,187 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 160,098 |
| JPMorgan Chase & Co. | 〃 | - | - |  | - |  | US$ | 124,948 |  |  | - |  | US$ | - |  |  | - |  | US$ | 40,000 |  | US$ | 40,000 |  | US$ | - |  |  | - |  | US$ | 84,967 |
| Goldman Sachs Group, Inc. | 〃 | - | - |  | - |  | US$ | 99,900 |  |  | - |  | US$ | - |  |  | - |  | US$ | 100,000 |  | US$ | 100,000 |  | US$ | - |  |  | - |  | US$ | - |
| Bank of Nova Scotia | 〃 | - | - |  | - |  | US$ | 49,976 |  |  | - |  | US$ | - |  |  | - |  | US$ | 50,000 |  | US$ | 50,000 |  | US$ | - |  |  | - |  | US$ | - |
| Commonwealth Bank of Australia | 〃 | - | - |  | - |  | US$ | 49,994 |  |  | - |  | US$ | - |  |  | - |  | US$ | 50,000 |  | US$ | 50,000 |  | US$ | - |  |  | - |  | US$ | - |
| Westpac Banking Corp. | 〃 | - | - |  | - |  | US$ | 99,987 |  |  | - |  | US$ | - |  |  | - |  | US$ | 100,000 |  | US$ | 100,000 |  | US$ | - |  |  | - |  | US$ | - |
| National Australia Bank | 〃 | - | - |  | - |  | US$ | 49,994 |  |  | - |  | US$ | - |  |  | - |  | US$ | 50,000 |  | US$ | 50,000 |  | US$ | - |  |  | - |  | US$ | - |
| Government bond |  |  |  |  | - |  |  |  |  |  | - |  |  |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  |
| United States Treasury Note/Bond | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 283,314 |  |  | - |  | US$ | 1,330,414 |  |  | - |  | US$ | 1,201,895 |  | US$ | 1,197,309 |  | US$ | 4,586 |  |  | - |  | US$ | 419,942 |
| United States Treasury Bill | 〃 | - | - |  | - |  | US$ | 2,248 |  |  | - |  | US$ | 30,306 |  |  | - |  | US$ | 30,583 |  | US$ | 30,575 |  | US$ | 8 |  |  | - |  | US$ | - |
| United States Cash Management Bill | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 50,193 |  |  | - |  | US$ | 50,290 |  | US$ | 50,290 |  | US$ | - |  |  | - |  | US$ | - |
| United States Treasury Floating Rate Note | 〃 | - | - |  | - |  | US$ | 68,164 |  |  | - |  | US$ | - |  |  | - |  | US$ | 68,186 |  | US$ | 68,239 |  | US$ | (53 | ) |  | - |  | US$ | - |
|  |  |  |  |  | - |  |  |  |  |  | - |  |  |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  |
| Agency bonds/Agency mortgage-backed securities |  |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fannie Mae Pool | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 43,868 |  |  | - |  | US$ | 448 |  | US$ | 460 |  | US$ | (12 | ) |  | - |  | US$ | 43,455 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 41,510 |  |  | - |  | US$ | 1,017 |  | US$ | 1,047 |  | US$ | (30 | ) |  | - |  | US$ | 40,438 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 30,338 |  |  | - |  | US$ | 917 |  | US$ | 941 |  | US$ | (24 | ) |  | - |  | US$ | 29,463 |
| GNMA II Pool MA6155 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 27,922 |  |  | - |  | US$ | 3,870 |  | US$ | 3,876 |  | US$ | (6 | ) |  | - |  | US$ | 23,932 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 24,616 |  |  | - |  | US$ | 1,759 |  | US$ | 1,855 |  | US$ | (96 | ) |  | - |  | US$ | 22,981 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 23,956 |  |  | - |  | US$ | 1,506 |  | US$ | 1,572 |  | US$ | (66 | ) |  | - |  | US$ | 22,677 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 22,063 |  |  | - |  | US$ | 1,716 |  | US$ | 1,771 |  | US$ | (55 | ) |  | - |  | US$ | 20,518 |
| FNMA TBA 30 Yr 4.5 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 466,768 |  |  | - |  | US$ | 446,909 |  | US$ | 446,629 |  | US$ | 280 |  |  | - |  | US$ | 20,165 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 21,757 |  |  | - |  | US$ | 2,297 |  | US$ | 2,329 |  | US$ | (32 | ) |  | - |  | US$ | 19,901 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 20,910 |  |  | - |  | US$ | 1,702 |  | US$ | 1,770 |  | US$ | (68 | ) |  | - |  | US$ | 19,392 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 18,806 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 18,834 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,929 |  |  | - |  | US$ | 1,965 |  | US$ | 2,050 |  | US$ | (85 | ) |  | - |  | US$ | 18,011 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 18,859 |  |  | - |  | US$ | 1,475 |  | US$ | 1,582 |  | US$ | (107 | ) |  | - |  | US$ | 17,529 |
| FNMA TBA 30 Yr 4 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 251,219 |  |  | - |  | US$ | 233,880 |  | US$ | 233,875 |  | US$ | 5 |  |  | - |  | US$ | 17,372 |
| GNMA II Pool MA6090 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 17,117 |  |  | - |  | US$ | 155 |  | US$ | 161 |  | US$ | (6 | ) |  | - |  | US$ | 16,840 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,605 |  |  | - |  | US$ | 3,315 |  | US$ | 3,436 |  | US$ | (121 | ) |  | - |  | US$ | 16,230 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 16,126 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 16,122 |
| GNMA II TBA 30 Yr 3 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 206,260 |  |  | - |  | US$ | 191,534 |  | US$ | 191,171 |  | US$ | 363 |  |  | - |  | US$ | 15,095 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 15,995 |  |  | - |  | US$ | 1,319 |  | US$ | 1,349 |  | US$ | (30 | ) |  | - |  | US$ | 14,828 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 17,665 |  |  | - |  | US$ | 3,584 |  | US$ | 3,755 |  | US$ | (171 | ) |  | - |  | US$ | 13,966 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 13,217 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 13,261 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 14,044 |  |  | - |  | US$ | 1,004 |  | US$ | 1,028 |  | US$ | (24 | ) |  | - |  | US$ | 13,152 |
| GNMA II Pool MA5264 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 16,635 |  |  | - |  | US$ | 3,686 |  | US$ | 3,832 |  | US$ | (146 | ) |  | - |  | US$ | 12,793 |
| Freddie Mac Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 12,611 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 12,628 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 13,778 |  |  | - |  | US$ | 1,615 |  | US$ | 1,636 |  | US$ | (21 | ) |  | - |  | US$ | 12,480 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 12,394 |  |  | - |  | US$ | 148 |  | US$ | 158 |  | US$ | (10 | ) |  | - |  | US$ | 12,281 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 14,112 |  |  | - |  | US$ | 2,091 |  | US$ | 2,197 |  | US$ | (106 | ) |  | - |  | US$ | 11,962 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 12,515 |  |  | - |  | US$ | 1,472 |  | US$ | 1,497 |  | US$ | (25 | ) |  | - |  | US$ | 11,248 |
| GNMA II TBA 30 Yr 3.5 | 〃 | - | - |  | - |  | US$ | 1,157 |  |  | - |  | US$ | 270,651 |  |  | - |  | US$ | 261,544 |  | US$ | 261,292 |  | US$ | 252 |  |  | - |  | US$ | 10,517 |

(Continued)

- 84 -

Company Name | Marketable Securities Type and Name | Financial Statement Account | Counter-party | Nature of Relationship | Beginning Balance | Acquisition | Disposal | Ending Balance (Note)
Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Carrying Value | Gain/Loss on Disposal | Shares/Units (In Thousands) | Amount
TSMC Global | Fannie Mae | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | 1,889 |  |  | - |  | US$ | 10,203 |  |  | - |  | US$ | 1,938 |  | US$ | 1,918 |  | US$ | 20 |  |  | - |  | US$ | 10,258 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,110 |  |  | - |  | US$ | 38 |  | US$ | 39 |  | US$ | (1 | ) |  | - |  | US$ | 10,057 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,205 |  |  | - |  | US$ | 471 |  | US$ | 486 |  | US$ | (15 | ) |  | - |  | US$ | 9,703 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 11,094 |  |  | - |  | US$ | 1,529 |  | US$ | 1,594 |  | US$ | (65 | ) |  | - |  | US$ | 9,596 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,064 |  |  | - |  | US$ | 642 |  | US$ | 652 |  | US$ | (10 | ) |  | - |  | US$ | 9,384 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,212 |  |  | - |  | US$ | 1,100 |  | US$ | 1,118 |  | US$ | (18 | ) |  | - |  | US$ | 9,306 |
| FNMA TBA 30 Yr 3.5 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 622,622 |  |  | - |  | US$ | 613,991 |  | US$ | 613,385 |  | US$ | 606 |  |  | - |  | US$ | 9,259 |
| Fannie Mae | 〃 | - | - |  | - |  | US$ | 9,370 |  |  | - |  | US$ | 9,467 |  |  | - |  | US$ | 10,271 |  | US$ | 10,267 |  | US$ | 4 |  |  | - |  | US$ | 8,700 |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 28,050 |  |  | - |  | US$ | 19,505 |  | US$ | 19,498 |  | US$ | 7 |  |  | - |  | US$ | 8,538 |
| GNMA II TBA 30 Yr 4.5 | 〃 | - | - |  | - |  | US$ | 587 |  |  | - |  | US$ | 37,238 |  |  | - |  | US$ | 30,291 |  | US$ | 30,323 |  | US$ | (32 | ) |  | - |  | US$ | 7,496 |
| Fannie Mae-Aces | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 11,110 |  |  | - |  | US$ | 4,196 |  | US$ | 4,077 |  | US$ | 119 |  |  | - |  | US$ | 7,112 |
| Fannie Mae | 〃 | - | - |  | - |  | US$ | 11,146 |  |  | - |  | US$ | 6,657 |  |  | - |  | US$ | 11,945 |  | US$ | 11,922 |  | US$ | 23 |  |  | - |  | US$ | 6,200 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 21,042 |  |  | - |  | US$ | 16,462 |  | US$ | 16,381 |  | US$ | 81 |  |  | - |  | US$ | 4,705 |
| FNMA TBA 30 Yr 5 | 〃 | - | - |  | - |  | US$ | 24,761 |  |  | - |  | US$ | 112,529 |  |  | - |  | US$ | 133,871 |  | US$ | 133,727 |  | US$ | 144 |  |  | - |  | US$ | 3,603 |
| FNMA TBA 15 Yr 3 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 142,803 |  |  | - |  | US$ | 138,801 |  | US$ | 138,711 |  | US$ | 90 |  |  | - |  | US$ | 3,073 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 23,067 |  |  | - |  | US$ | 20,672 |  | US$ | 20,453 |  | US$ | 219 |  |  | - |  | US$ | 2,673 |
| Fannie Mae-Aces | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,910 |  |  | - |  | US$ | 18,513 |  | US$ | 17,849 |  | US$ | 664 |  |  | - |  | US$ | 2,181 |
| FNMA TBA 30 Yr 3 | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 274,335 |  |  | - |  | US$ | 272,691 |  | US$ | 272,314 |  | US$ | 377 |  |  | - |  | US$ | 2,028 |
| FNMA Pool BM4493 | 〃 | - | - |  | - |  | US$ | 16,915 |  |  | - |  | US$ | 1,795 |  |  | - |  | US$ | 17,390 |  | US$ | 17,262 |  | US$ | 128 |  |  | - |  | US$ | 1,588 |
| Freddie Mac Multifamily Structured Pass Through Certificates | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 33,864 |  |  | - |  | US$ | 33,705 |  | US$ | 32,603 |  | US$ | 1,102 |  |  | - |  | US$ | 1,321 |
| Government National Mortgage Association | 〃 | - | - |  | - |  | US$ | 16,485 |  |  | - |  | US$ | 860 |  |  | - |  | US$ | 17,209 |  | US$ | 16,942 |  | US$ | 267 |  |  | - |  | US$ | 763 |
| Government National Mortgage Association | 〃 | - | - |  | - |  | US$ | 10,590 |  |  | - |  | US$ | 665 |  |  | - |  | US$ | 10,652 |  | US$ | 10,728 |  | US$ | (76 | ) |  | - |  | US$ | 640 |
| Fannie Mae or Freddie Mac | 〃 | - | - |  | - |  | US$ | 360 |  |  | - |  | US$ | 11,135 |  |  | - |  | US$ | 11,138 |  | US$ | 11,127 |  | US$ | 11 |  |  | - |  | US$ | 367 |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,951 |  |  | - |  | US$ | 20,336 |  | US$ | 19,929 |  | US$ | 407 |  |  | - |  | US$ | - |
| Government National Mortgage Association | 〃 | - | - |  | - |  | US$ | 15,253 |  |  | - |  | US$ | - |  |  | - |  | US$ | 15,929 |  | US$ | 15,671 |  | US$ | 258 |  |  | - |  | US$ | - |
| Government National Mortgage Association | 〃 | - | - |  | - |  | US$ | 12,897 |  |  | - |  | US$ | - |  |  | - |  | US$ | 13,248 |  | US$ | 13,269 |  | US$ | (21 | ) |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 11,390 |  |  | - |  | US$ | 11,544 |  | US$ | 11,369 |  | US$ | 175 |  |  | - |  | US$ | - |
| Freddie Mac Multifamily Structured Pass Through Certificates | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 9,824 |  |  | - |  | US$ | 10,426 |  | US$ | 9,819 |  | US$ | 607 |  |  | - |  | US$ | - |
| FED HM LN PC Pool G61603 | 〃 | - | - |  | - |  | US$ | 25,515 |  |  | - |  | US$ | - |  |  | - |  | US$ | 25,966 |  | US$ | 25,627 |  | US$ | 339 |  |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,788 |  |  | - |  | US$ | 19,817 |  | US$ | 19,783 |  | US$ | 34 |  |  | - |  | US$ | - |
| Freddie Mac Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,993 |  |  | - |  | US$ | 20,102 |  | US$ | 19,993 |  | US$ | 109 |  |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 31,117 |  |  | - |  | US$ | 30,924 |  | US$ | 31,115 |  | US$ | (191 | ) |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 19,999 |  |  | - |  | US$ | 20,332 |  | US$ | 19,982 |  | US$ | 350 |  |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 14,988 |  |  | - |  | US$ | 15,037 |  | US$ | 14,987 |  | US$ | 50 |  |  | - |  | US$ | - |
| FNMA Pool BM4495 | 〃 | - | - |  | - |  | US$ | 27,324 |  |  | - |  | US$ | - |  |  | - |  | US$ | 28,065 |  | US$ | 27,635 |  | US$ | 430 |  |  | - |  | US$ | - |
| FED HM LN PC Pool G61592 | 〃 | - | - |  | - |  | US$ | 21,507 |  |  | - |  | US$ | - |  |  | - |  | US$ | 21,673 |  | US$ | 21,448 |  | US$ | 225 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 23,009 |  |  | - |  | US$ | 23,035 |  | US$ | 23,003 |  | US$ | 32 |  |  | - |  | US$ | - |
| FED HM LN PC Pool G61654 | 〃 | - | - |  | - |  | US$ | 18,555 |  |  | - |  | US$ | - |  |  | - |  | US$ | 18,883 |  | US$ | 18,606 |  | US$ | 277 |  |  | - |  | US$ | - |
| GNMA II Pool MA5468 | 〃 | - | - |  | - |  | US$ | 17,490 |  |  | - |  | US$ | - |  |  | - |  | US$ | 17,460 |  | US$ | 17,591 |  | US$ | (131 | ) |  | - |  | US$ | - |
| Fannie Mae-Aces | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,575 |  |  | - |  | US$ | 11,022 |  | US$ | 10,560 |  | US$ | 462 |  |  | - |  | US$ | - |
| FNMA Pool CA2169 | 〃 | - | - |  | - |  | US$ | 13,859 |  |  | - |  | US$ | - |  |  | - |  | US$ | 13,966 |  | US$ | 13,892 |  | US$ | 74 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | 9,743 |  |  | - |  | US$ | - |  |  | - |  | US$ | 9,881 |  | US$ | 10,148 |  | US$ | (267 | ) |  | - |  | US$ | - |
| FED HM LN PC Pool G61553 | 〃 | - | - |  | - |  | US$ | 15,045 |  |  | - |  | US$ | - |  |  | - |  | US$ | 15,177 |  | US$ | 15,109 |  | US$ | 68 |  |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 10,296 |  |  | - |  | US$ | 10,337 |  | US$ | 10,289 |  | US$ | 48 |  |  | - |  | US$ | - |
| FHLMC TBA 30 Yr 3 | 〃 | - | - |  | - |  | US$ | 15 |  |  | - |  | US$ | 51,813 |  |  | - |  | US$ | 52,028 |  | US$ | 51,828 |  | US$ | 200 |  |  | - |  | US$ | - |
| FNMA TBA 15 Yr 3.5 | 〃 | - | - |  | - |  | US$ | 2,020 |  |  | - |  | US$ | 48,272 |  |  | - |  | US$ | 50,364 |  | US$ | 50,283 |  | US$ | 81 |  |  | - |  | US$ | - |

(Continued)

- 85 -

Company Name | Marketable Securities Type and Name | Financial Statement Account | Counter-party | Nature of Relationship | Beginning Balance | Acquisition | Disposal | Ending Balance (Note)
Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Shares/Units (In Thousands) | Amount | Carrying Value | Gain/Loss on Disposal | Shares/Units (In Thousands) | Amount
TSMC Global | Fannie Mae or Freddie Mac | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 13,314 |  |  | - |  | US$ | 13,301 |  | US$ | 13,314 |  | US$ | (13 | ) |  | - |  | US$ | - |
| Fannie Mae or Freddie Mac | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 76,846 |  |  | - |  | US$ | 76,925 |  | US$ | 76,846 |  | US$ | 79 |  |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 16,687 |  |  | - |  | US$ | 16,832 |  | US$ | 16,668 |  | US$ | 164 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 24,951 |  |  | - |  | US$ | 25,391 |  | US$ | 24,902 |  | US$ | 489 |  |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 14,610 |  |  | - |  | US$ | 14,728 |  | US$ | 14,594 |  | US$ | 134 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 61,366 |  |  | - |  | US$ | 61,130 |  | US$ | 61,332 |  | US$ | (202 | ) |  | - |  | US$ | - |
| GNMA II TBA 30 Yr 5 |  | - | - |  | - |  | US$ | 12,209 |  |  | - |  | US$ | 38,655 |  |  | - |  | US$ | 50,926 |  | US$ | 50,878 |  | US$ | 48 |  |  | - |  | US$ | - |
| FNMA Pool CA2352 | 〃 | - | - |  | - |  | US$ | 25,130 |  |  | - |  | US$ | - |  |  | - |  | US$ | 25,161 |  | US$ | 25,104 |  | US$ | 57 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 15,430 |  |  | - |  | US$ | 15,615 |  | US$ | 15,461 |  | US$ | 154 |  |  | - |  | US$ | - |
| GNMA II TBA 30 Yr 4 | 〃 | - | - |  | - |  | US$ | 2,129 |  |  | - |  | US$ | 61,671 |  |  | - |  | US$ | 63,840 |  | US$ | 63,791 |  | US$ | 49 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 21,932 |  |  | - |  | US$ | 22,196 |  | US$ | 21,977 |  | US$ | 219 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | 40,059 |  |  | - |  | US$ | - |  |  | - |  | US$ | 41,005 |  | US$ | 41,421 |  | US$ | (416 | ) |  | - |  | US$ | - |
| FNMA Pool BM1948 | 〃 | - | - |  | - |  | US$ | 26,046 |  |  | - |  | US$ | - |  |  | - |  | US$ | 26,835 |  | US$ | 26,938 |  | US$ | (103 | ) |  | - |  | US$ | - |
| Freddie Mac Gold Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 15,441 |  |  | - |  | US$ | 15,631 |  | US$ | 15,460 |  | US$ | 171 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 16,982 |  |  | - |  | US$ | 17,040 |  | US$ | 16,958 |  | US$ | 82 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 12,893 |  |  | - |  | US$ | 13,190 |  | US$ | 12,889 |  | US$ | 301 |  |  | - |  | US$ | - |
| Fannie Mae Pool | 〃 | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 26,015 |  |  | - |  | US$ | 26,560 |  | US$ | 26,015 |  | US$ | 545 |  |  | - |  | US$ | - |
| FNMA PooL BM4681 | 〃 | - | - |  | - |  | US$ | 31,784 |  |  | - |  | US$ | - |  |  | - |  | US$ | 32,259 |  | US$ | 31,819 |  | US$ | 440 |  |  | - |  | US$ | - |
| Freddie Mac Multifamily Structured Pass Through Certificates | 〃 | - | - |  | - |  | US$ | 513 |  |  | - |  | US$ | 10,877 |  |  | - |  | US$ | 11,560 |  | US$ | 11,380 |  | US$ | 180 |  |  | - |  | US$ | - |
|  |  |  |  |  | - |  |  |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Asset-backed securities |  |  |  |  |  |  |  |  |  |  | - |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Hyundai Auto Receivables Trust | Financial assets at fair value through other comprehensive income | - | - |  | - |  | US$ | - |  |  | - |  | US$ | 9,921 |  |  | - |  | US$ | - |  | US$ | - |  | US$ | - |  |  | - |  | US$ | 9,925 |
| Citibank Credit Card Issuance Trust | 〃 | - | - |  | - |  | US$ | 68,487 |  |  | - |  | US$ | 2,693 |  |  | - |  | US$ | 64,194 |  | US$ | 64,146 |  | US$ | 48 |  |  | - |  | US$ | 7,321 |
| American Express Credit Account Master Trust | 〃 | - | - |  | - |  | US$ | 27,285 |  |  | - |  | US$ | 1,300 |  |  | - |  | US$ | 26,647 |  | US$ | 26,678 |  | US$ | (31 | ) |  | - |  | US$ | 2,070 |
| American Express Credit Account Master Trust | 〃 | - | - |  | - |  | US$ | 8,861 |  |  | - |  | US$ | 2,055 |  |  | - |  | US$ | 10,143 |  | US$ | 10,116 |  | US$ | 27 |  |  | - |  | US$ | 865 |
| Discover Card Execution Note Trust | 〃 | - | - |  | - |  | US$ | 37,495 |  |  | - |  | US$ | 868 |  |  | - |  | US$ | 38,510 |  | US$ | 38,529 |  | US$ | (19 | ) |  | - |  | US$ | - |
| Ford Credit Floorplan Master Owner Trust A | 〃 | - | - |  | - |  | US$ | 26,702 |  |  | - |  | US$ | - |  |  | - |  | US$ | 26,696 |  | US$ | 26,748 |  | US$ | (52 | ) |  | - |  | US$ | - |
| Chase Issuance Trust | 〃 | - | - |  | - |  | US$ | 43,604 |  |  | - |  | US$ | - |  |  | - |  | US$ | 43,763 |  | US$ | 43,697 |  | US$ | 66 |  |  | - |  | US$ | - |

Note: | The ending balance includes the amortization of premium/discount on bonds investments, share of profits/losses of investees and other related adjustment.

(Concluded)

- 86 -

T ABLE 5

Taiwan Semiconductor Manufacturing Company Limited and Investees

ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counter-party | Nature of Relationships | Prior Transaction of Related Counter-party | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Fab | September 11, 2018 to August 12, 2019 | $ | 1,008,210 |  | Monthly settlement by the construction progress and acceptance | KEDGE Construction Co., Ltd. | - | N/A | N/A | N/A | N/A | Price comparison and price negotiation | Manufacturing purpose | None
| Fab | March 25, 2019 |  | 888,800 |  | Monthly settlement by the construction progress and acceptance | PAN ASIA Corp. | - | N/A | N/A | N/A | N/A | Price comparison and price negotiation | Manufacturing purpose | None
| Fab | June 27, 2019 to October 2, 2019 |  | 348,935 |  | Based on the terms in the purchase order | Fu Tsu Construction Co., Ltd. | - | N/A | N/A | N/A | N/A | Price comparison and price negotiation | Manufacturing purpose | None
| Fab | November 12, 2019 |  | 74,800,000 |  | Based on the terms in the purchase order | 72 counterparties, including: | - | N/A | N/A | N/A | N/A | Price comparison and price negotiation | Manufacturing purpose | None
|  |  |  |  |  |  | Lead-Fu Industrials Corporation |  |  |  |  |  |  |  |
|  |  |  |  |  |  | San Fu Chemical Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Chenfull International Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Shihlin Electric & Engineering Corporation |  |  |  |  |  |  |  |
|  |  |  |  |  |  | TASA Construction Corporation |  |  |  |  |  |  |  |
|  |  |  |  |  |  | China Steel Structure Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Capital Machinery Limited |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Fu Tsu Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Mandartech Interiors Inc. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Techgo Industrial Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Ovivo Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Cica-Huntek Chemical Technology Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Cheng Deh Fire Protection Industrial Corp. |  |  |  |  |  |  |  |
|  |  |  |  |  |  | Zhao-Cheng Corp. |  |  |  |  |  |  |  |

(Continued)

- 87 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counter-party | Nature of Relationships | Prior Transaction of Related Counter-party | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Fab |  |  |  | JJmr-Clean-Air Solution Tech.Services Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Mega Union Technology Incorporated |  |  |  |  |  |  |  |
|  |  |  |  | Am-Power Machine International Enterprise Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Marketech International Corp. |  |  |  |  |  |  |  |
|  |  |  |  | ABB Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Siemens Limited |  |  |  |  |  |  |  |
|  |  |  |  | Hueng Luei Process Industry Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Jusun Instruments Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Weltall Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Allis Electric Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Air Liquide Far Eastern Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | L&K Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Hsieh Kun Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Taiwan Puritic Corp. |  |  |  |  |  |  |  |
|  |  |  |  | Solomon Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Exyte Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Pan Asia (Engineers & Constructors) Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Evergreen Steel Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Atlas Copco Taiwan Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Trusval Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Yangtech Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Schneider Electric Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Chun Yuan Steel Industry Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Yankey Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ying Pao Technology Inc. |  |  |  |  |  |  |  |
|  |  |  |  | Swift Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Chen Yuan International Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Uangyih-Tech Industrial Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kedge Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Taiwan Gleno Enterprise Co., Ltd. |  |  |  |  |  |  |  |

(Continued)

- 88 -

Company Name | Types of Property | Transaction Date | Transaction Amount (Foreign Currencies in Thousands) | Payment Term | Counter-party | Nature of Relationships | Prior Transaction of Related Counter-party | Price Reference | Purpose of Acquisition | Other Terms
Owner | Relationships | Transfer Date | Amount
TSMC | Fab |  |  |  | Unelectra International Corp. |  |  |  |  |  |  |  |
|  |  |  |  | JG Environmental Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Fortune Electric Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Desiccant Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Organo Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Ingersoll-Rand Southeast Asia (Pte) Ltd. Taiwan Branch (Singapore) |  |  |  |  |  |  |  |
|  |  |  |  | Da-Cin Construction Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Wholetech System Hitech Limited |  |  |  |  |  |  |  |
|  |  |  |  | United Integrated Services Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Hantech Engineering Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Kinetics Technology Corporation |  |  |  |  |  |  |  |
|  |  |  |  | Versum Materials Taiwan Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Confederate Technology Co., Ltd. |  |  |  |  |  |  |  |
|  |  |  |  | Atlas Technology Corp. |  |  |  |  |  |  |  |
|  |  |  |  | Accudevice Co., Ltd. |  |  |  |  |  |  |  |

(Concluded)

- 89 -

TABLE 6

Taiwan Semiconductor Manufacturing Company Limited and Investees

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name | Related Party | Nature of Relationships | Transaction Details | Abnormal Transaction | Notes/Accounts Payable or Receivable | Note
Purchases/ Sales | Amount (Foreign Currencies in Thousands) | % to Total | Payment Terms | Unit Price | Payment Terms | Ending Balance (Foreign Currencies in Thousands) | % to Total
TSMC | TSMC North America | Subsidiary | Sales | $ | 636,441,507 |  |  | 58 |  | Net 30 days from invoice date (Note) |  | - |  | (Note) | $ | 81,732,281 |  |  | 62 |  |
| GUC | Associate | Sales |  | 4,024,495 |  |  | - |  | Net 30 days from the end of the month of when invoice is issued |  | - |  | - |  | 458,292 |  |  | - |  |
| TSMC Nanjing | Subsidiary | Purchases |  | 16,970,404 |  |  | 18 |  | Net 30 days from the end of the month of when invoice is issued |  | - |  | - |  | (1,266,002 | ) |  | 3 |  |
| TSMC China | Subsidiary | Purchases |  | 16,584,706 |  |  | 17 |  | Net 30 days from the end of the month of when invoice is issued |  | - |  | - |  | (1,538,971 | ) |  | 4 |  |
| WaferTech | Indirect subsidiary | Purchases |  | 6,864,201 |  |  | 7 |  | Net 30 days from the end of the month of when invoice is issued |  | - |  | - |  | (1,097,625 | ) |  | 3 |  |
| SSMC | Associate | Purchases |  | 3,208,817 |  |  | 4 |  | Net 30 days from the end of the month of when invoice is issued |  | - |  | - |  | (487,944 | ) |  | 1 |  |
| VIS | Associate | Purchases |  | 3,092,600 |  |  | 3 |  | Net 30 days from the end of the month of when invoice is issued |  | - |  | - |  | (153,977 | ) |  | - |  |
TSMC North America | GUC | Associate of TSMC | Sales |  | 1,628,944 |  |  | - |  | Net 30 days from invoice date |  | - |  | - |  | 283,472 |  |  | - |  |
|  |  |  | (US$ | 52,821 | ) |  |  |  |  |  |  |  |  | (US$ | 9,453 | ) |  |  |  |
VisEra Tech | Xintec | Associate of TSMC | Sales |  | 571,537 |  |  | 17 |  | Net 30 days from the end of the month of when invoice is issued |  |  |  |  |  | 120,172 |  |  | 18 |  |

Note：The tenor is 30 days from TSMC’s invoice date or determined by the payment terms granted to its clients by TSMC North America.

- 90 -

TABLE 7

Taiwan Semiconductor Manufacturing Company Limited and Investees

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Company Name | Related Party | Nature of Relationships | Ending Balance (Foreign Currencies in Thousands) | Turnover Days (Note 1) | Overdue | Amounts Received in Subsequent Period | Allowance for Bad Debts
Amount | Action Taken
TSMC | TSMC North America | Subsidiary | $ | 82,535,007 |  | 48 | $ | 1,109,577 |  | - | $ | 30,688,822 |  | $ | - |
| TSMC Nanjing | Subsidiary |  | 101,559 |  | Note 2 |  | - |  | - |  | - |  |  | - |
| GUC | Associate |  | 458,292 |  | 38 |  | 32,753 |  | - |  | 32,753 |  |  | - |
TSMC North America | GUC | Associate of TSMC | (US$ | 284,674 9,493 | ) | 45 | (US$ | 24,377 813 | ) | - | (US$ | 24,377 813 | ) |  | - |
TSMC China | TSMC Nanjing | The same parent company |  | 24,200,839 |  | Note 2 |  | - |  | - |  | - |  |  | - |
|  |  | (RMB | 5,621,827 | ) |  |  |  |  |  |  |  |  |  |  |
| TSMC | Parent company |  | 1,538,971 |  | 32 |  | - |  | - |  | - |  |  | - |
|  |  | (RMB | 357,502 | ) |  |  |  |  |  |  |  |  |  |  |
TSMC Nanjing | TSMC | Parent company |  | 1,266,002 |  | 19 |  | - |  | - |  | - |  |  | - |
|  |  | (RMB | 294,092 | ) |  |  |  |  |  |  |  |  |  |  |
VisEra Tech | Xintec | Associate of TSMC |  | 120,172 |  | 36 |  | - |  | - |  | - |  |  | - |
TSMC Technology | TSMC | The ultimate parent of the Company | (US$ | 249,993 8,336 | ) | Note 2 |  | - |  | - |  | - |  |  | - |
WaferTech | TSMC | The ultimate parent of the Company | (US$ | 1,097,625 36,602 | ) | 59 | (US$ | 598,169 19,947 | ) | - | (US$ | 598,169 19,947 | ) |  | - |

Note 1：The calculation of turnover days excludes other receivables from related parties.

Note 2：The ending balance is primarily consisted of other receivables, which is not applicable for the calculation of turnover days.

- 91 -

TABLE 8

Taiwan Semiconductor Manufacturing Company Limited and Investees

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA)

FOR THE YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investor Company | Investee Company | Location | Main Businesses and Products | Original Investment Amount | Balance as of December 31, 2019 | Net Income (Losses) of the Investee (Foreign Currencies in Thousands) | Share of Profits/Losses of Investee (Note 1) (Foreign Currencies in Thousands) | Note
December 31, 2019 (Foreign Currencies in Thousands) | December 31, 2018 (Foreign Currencies in Thousands) | Shares (In Thousands) | Percentage of Ownership | Carrying Value (Foreign Currencies in Thousands)
TSMC | TSMC Global | Tortola, British Virgin Islands | Investment activities | $ | 355,162,309 |  | $ | 355,162,309 |  |  | 11 |  |  | 100 |  | $ | 397,737,270 |  | $ | 11,592,187 |  | $ | 11,592,187 |  | Subsidiary
| TSMC Partners | Tortola, British Virgin Islands | Investing in companies involved in the design, manufacture, and other related business in the semiconductor industry and other investment activities |  | 31,456,130 |  |  | 31,456,130 |  |  | 988,268 |  |  | 100 |  |  | 53,388,267 |  |  | 2,202,709 |  |  | 2,202,709 |  | Subsidiary
| VIS | Hsin-Chu, Taiwan | Manufacturing, selling, packaging, testing and computer-aided design of integrated circuits and other semiconductor devices and the manufacturing and design service of masks |  | 10,180,677 |  |  | 10,180,677 |  |  | 464,223 |  |  | 28 |  |  | 9,027,572 |  |  | 5,860,497 |  |  | 1,654,799 |  | Associate
| SSMC | Singapore | Manufacturing and selling of integrated circuits and other semiconductor devices |  | 5,120,028 |  |  | 5,120,028 |  |  | 314 |  |  | 39 |  |  | 6,502,174 |  |  | 2,286,743 |  |  | 887,028 |  | Associate
| TSMC North America | San Jose, California, U.S.A | Selling and marketing of integrated circuits and other semiconductor devices |  | 333,718 |  |  | 333,718 |  |  | 11,000 |  |  | 100 |  |  | 4,569,825 |  |  | 416,366 |  |  | 416,366 |  | Subsidiary
| VisEra Tech | Hsin-Chu, Taiwan | Engaged in manufacturing electronic spare parts and in researching, developing, designing, manufacturing, selling, packaging and testing of color filter |  | 5,005,171 |  |  | 5,005,171 |  |  | 253,120 |  |  | 87 |  |  | 4,541,741 |  |  | 613,841 |  |  | 533,656 |  | Subsidiary
| Xintec | Taoyuan, Taiwan | Wafer level chip size packaging and wafer level post passivation interconnection service |  | 1,988,317 |  |  | 1,988,317 |  |  | 111,282 |  |  | 41 |  |  | 1,846,145 |  |  | 181,978 |  |  | 75,329 |  | Associate
| GUC | Hsin-Chu, Taiwan | Researching, developing, manufacturing, testing and marketing of integrated circuits |  | 386,568 |  |  | 386,568 |  |  | 46,688 |  |  | 35 |  |  | 1,284,377 |  |  | 633,467 |  |  | 220,700 |  | Associate
| TSMC Europe | Amsterdam, the Netherlands | Customer service and supporting activities |  | 15,749 |  |  | 15,749 |  |  | - |  |  | 100 |  |  | 462,479 |  |  | 37,621 |  |  | 37,621 |  | Subsidiary
| VTAF III | Cayman Islands | Investing in new start-up technology companies |  | 1,318,846 |  |  | 1,308,244 |  |  | - |  |  | 98 |  |  | 231,504 |  |  | 1,191 |  |  | 1,168 |  | Subsidiary
| TSMC Japan | Yokohama, Japan | Customer service and supporting activities |  | 83,760 |  |  | 83,760 |  |  | 6 |  |  | 100 |  |  | 142,620 |  |  | 3,254 |  |  | 3,254 |  | Subsidiary
| VTAF II | Cayman Islands | Investing in new start-up technology companies |  | 260,300 |  |  | 278,800 |  |  | - |  |  | 98 |  |  | 75,095 |  |  | (3,409 | ) |  | (3,340 | ) | Subsidiary
| TSMC Korea | Seoul, Korea | Customer service and supporting activities |  | 13,656 |  |  | 13,656 |  |  | 80 |  |  | 100 |  |  | 40,727 |  |  | 2,196 |  |  | 2,196 |  | Subsidiary
| TSMC Solar Europe GmbH | Hamburg, Germany | Selling of solar related products and providing customer service |  | - |  |  | 25,266 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  | Subsidiary
TSMC Partners | TSMC Development | Delaware, U.S.A | Investing in companies involved in the manufacturing related business in the semiconductor industry | (US$ | 17,601,121 586,939 | ) | (US$ | 17,601,121 586,939 | ) |  | - |  |  | 100 |  | (US$ | 29,825,099 994,568 | ) | (US$ | 1,338,673 43,339 | ) |  | Note2 |  | Subsidiary
| TSMC Technology | Delaware, U.S.A | Engineering support activities |  | 428,289 |  |  | 428,289 |  |  | - |  |  | 100 |  |  | 670,538 |  |  | 100,661 |  |  | Note2 |  | Subsidiary
|  |  |  | (US$ | 14,282 | ) | (US$ | 14,282 | ) |  |  |  |  |  |  | (US$ | 22,360 | ) | (US$ | 3,264 | ) |  |  |  |
| TSMC Canada | Ontario, Canada | Engineering support activities |  | 68,972 |  |  | 68,972 |  |  | 2,300 |  |  | 100 |  |  | 239,150 |  |  | 30,494 |  |  | Note2 |  | Subsidiary
|  |  |  | (US$ | 2,300 | ) | (US$ | 2,300 | ) |  |  |  |  |  |  | (US$ | 7,975 | ) | (US$ | 987 | ) |  |  |  |
| ISDF | Cayman Islands | Investing in new start-up technology companies |  | - |  |  | 14,250 |  |  | 583 |  |  | 97 |  |  | - |  |  | 10 |  |  | Note2 |  | Subsidiary
|  |  |  |  |  |  | (US$ | 475 | ) |  |  |  |  |  |  |  |  |  | (US$ | - | ) |  |  |  |
| ISDF II | Cayman Islands | Investing in new start-up technology companies |  | - |  |  | - |  |  | 9,299 |  |  | 97 |  |  | - |  |  | - |  |  | Note2 |  | Subsidiary
VTAF III | Growth Fund | Cayman Islands | Investing in new start-up technology companies |  | 75,083 |  |  | 64,587 |  |  | - |  |  | 100 |  |  | 124,648 |  |  | (1,351 | ) |  | Note2 |  | Subsidiary
|  |  |  | (US$ | 2,504 | ) | (US$ | 2,154 | ) |  |  |  |  |  |  | (US$ | 4,157 | ) | (US$ | (44 | ) |  |  |  |
| Mutual-Pak | New Taipei, Taiwan | Manufacturing of electronic parts, wholesaling and retailing of electronic materials, and researching, developing and testing of RFID | (US$ | 47,781 1,593 | ) | (US$ | 47,781 1,593 | ) |  | 4,693 |  |  | 28 |  | (US$ | 38,520 1,285 | ) | (US$ | 20,941 671 | ) |  | Note2 |  | Associate

(Continued)

- 92 -

Investor Company | Investee Company | Location | Main Businesses and Products | Original Investment Amount | Balance as of December 31, 2019 | Net Income (Losses) of the Investee (Foreign Currencies in Thousands) | Share of Profits/Losses of Investee (Note 1) (Foreign Currencies in Thousands) | Note
December 31, 2019 (Foreign Currencies in Thousands) | December 31, 2018 (Foreign Currencies in Thousands) | Shares (In Thousands) | Percentage of Ownership | Carrying Value (Foreign Currencies in Thousands)
TSMC Development | WaferTech | Washington, U.S.A | Manufacturing, selling and testing of integrated circuits and other semiconductor devices | $ | - |  | $ | - |  |  | 293,637 |  |  | 100 |  | (US$ | 4,402,646 146,814 | ) | (US$ | 843,483 27,326 | ) | Note 2 | Subsidiary

Note 1: | The share of profits/losses of investee includes the effect of unrealized gross profit on intercompany transactions. |

Note 2: | The share of profits/losses of the investee company is not reflected herein as such amount is already included in the share of profits/losses of the investor company. |

(Concluded)

- 93 -

TABLE 9

Taiwan Semiconductor Manufacturing Company Limited and Investees

INFORMATION ON INVESTMENT IN MAINLAND CHINA

FOR YEAR ENDED DECEMBER 31, 2019

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Investee Company | Main Businesses and Products | Total Amount of Paid-in Capital (RMB in Thousands) | Method of Investment | Accumulated Outflow of Investment from Taiwan as of January 1, 2019 (US$ in Thousands) | Investment Flows | Accumulated Outflow of Investment from Taiwan as of December 31, 2019 (US$ in Thousands) | Net Income (Losses) of the Investee Company | Percentage of Ownership | Share of Profits/Losses | Carrying Amount as of December 31, 2019 | Accumulated Inward Remittance of Earnings as of December 31, 2019
Outflow (US$ in Thousands) | Inflow
TSMC China | Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices | $ (RMB | 18,939,667 4,502,080 | ) | Note 1 | $ (US$ | 18,939,667 596,000 | ) | $ | - |  | $ | - |  | $ (US$ | 18,939,667 596,000 | ) | $ | 4,037,216 |  |  | 100% |  | $ | 4,070,094 (Note 2 | ) | $ | 57,289,154 |  | $ | - |
TSMC Nanjing | Manufacturing, selling, testing and computer-aided design of integrated circuits and other semiconductor devices | (RMB | 30,521,412 6,650,119 | ) | Note 1 | (US$ | 30,521,412 1,000,000 | ) |  | - |  |  | - |  | (US$ | 30,521,412 1,000,000 | ) |  | 1,289,672 |  |  | 100% |  |  | 1,213,021 (Note 2 | ) |  | 21,364,939 |  |  | - |

Accumulated Investment in Mainland China as of December 31, 2019 (US$ in Thousands) | Investment Amounts Authorized by Investment Commission, MOEA (US$ in Thousands) | Upper Limit on Investment
$ (US$ | 49,461,079 1,596,000 | ) | $ (US$ | 119,412,667 3,596,000 | ) | $ | 973,257,256 (Note 3 | )

Note 1: | TSMC directly invested US$596,000 thousand in TSMC China and US$1,000,000 thousands in TSMC Nanjing.

Note 2: | Amount was recognized based on the audited financial statements.

Note 3: | The upper limit on investment in mainland China is determined by sixty percent (60%) of the Company’s consolidated net worth.

- 94 -

THE CONTENTS OF STATEMENTS OF major
accountING ITEMS

item |  | statement INDEX
Major Accounting Items in Assets, Liabilities and Equity |  |
Statement of Cash and Cash Equivalents |  | 1
Statement of Notes and Accounts Receivable, Net |  | 2
Statement of Receivables from Related Parties |  | 3
Statement of Inventories |  | 4
Statement of Changes in Investments Accounted for Using Equity Method |  | 5
Statement of Changes in Property, Plant and Equipment |  | Note 12
Statement of Changes in Accumulated Depreciation and Accumulated Impairment of Property, Plant and Equipment |  | Note 12
STATEMENT OF Changes in RIGHT-OF-USE ASSETS |  | 6
Statement of Changes in Intangible Assets |  | Note 14
Statement of Guarantee deposits |  | Note 18
Statement of Deferred Income Tax Assets / LIABILITIES |  | Note 25
Statement of Short-term Loans |  | 7
STATEMENT OF ACCOUNTS PAYABLES |  | 8
Statement of Payables to Related Parties |  | 9
Statement of Payables to Contractors and Equipment Suppliers |  | 10
STATEMENT OF LEASE LIABILITIES |  | 11
Statement of Accrued Expenses and Other Current Liabilities |  | 12
Statement of Bonds Payable |  | 13
Major Accounting Items in Profit or Loss |  |
Statement of net revEnue |  | 14
Statement of Cost of revEnue |  | 15
Statement of Operating Expenses |  | 16
Statement of Finance Costs |  | Note 23
Statement of Labor, Depreciation and Amortization by function |  | 17

- 95 -

STATEMENT 1

Taiwan Semiconductor Manufacturing Company Limited

Statement of Cash and cash Equivalents

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item |  | Description |  | Amount
Cash |  |  |  |
Petty cash |  |  |  | $ | 460 |
Cash in banks |  |  |  |  |  |
Checking accounts and demand deposits |  |  |  |  | 5,497,624 |
Foreign currency deposits |  | Including US$385,487 thousand @29.988, JPY3,439,861 thousand @0.2751 and EUR2,327 thousand @33.653 |  |  | 12,584,607 |
Time deposits |  | From 2019.10.01 to 2020.10.14, interest rates at 0.19%-2.40%, including NT$115,277,800 thousand and US$269,781 thousand @29.988 |  |  | 123,368,007 |
Total |  |  |  | $ | 141,450,698 |

- 96 -

STATEMENT 2

Taiwan Semiconductor Manufacturing Company Limited

Statement of Notes and Accounts Receivable, Net

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Client Name |  | Amount
Client A |  | $ | 20,435,306 |
Client B |  |  | 4,419,372 |
Client C |  |  | 3,914,138 |
Client D |  |  | 3,375,702 |
Others (Note) |  |  | 17,299,460 |
|  |  | 49,443,978 |
Less: Loss allowance |  |  | (319,045 | )
Total |  | $ | 49,124,933 |

Note: | The amount of individual client included in others does not exceed 5% of the account balance.

- 97 -

STATEMENT 3

Taiwan Semiconductor Manufacturing Company Limited

Statement of Receivables from Related Parties

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Client Name |  | Amount
TSMC North America |  | $ | 81,732,281 |
Others (Note) |  |  | 462,220 |
Total |  | $ | 82,194,501 |

N ote: | The amount of individual client included in others does not exceed 5% of the account balance.

- 98 -

STATEMENT 4

Taiwan Semiconductor Manufacturing Company Limited

Statement of Inventories

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

|  | Amount
Item |  | Cost |  | Net Realizable Value
Finished goods |  | $ | 8,533,179 |  |  | $ | 25,069,823 |
Work in process |  |  | 49,268,466 |  |  |  | 236,694,719 |
Raw materials |  |  | 15,046,116 |  |  |  | 14,064,902 |
Supplies and spare parts |  |  | 3,416,090 |  |  |  | 3,591,225 |
Total |  | $ | 76,263,851 |  |  | $ | 279,420,669 |

- 99 -

STATEMENT 5

Taiwan Semiconductor Manufacturing Company Limited

Statement of Changes in Investments Accounted for Using Equity Method

FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

|  |  |  |  |  |  |  |  |  |  |  |  |  | Increase |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  | (Decrease) |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  | in Using the |  |  |  |  |  |  |  | Market Value or |  |
|  | Balance, January 1, 2019 |  | Additions in Investment |  | Decrease in Investment |  | Equity Method |  | Balance, December 31, 2019 |  | Net Assets Value |  |
|  | Shares |  |  |  | Shares |  |  |  | Shares |  |  |  | Amount |  | Shares |  |  |  |  |  | Unit Price |  |  |  |
Investees |  | (In Thousands) |  | Amount |  | (In Thousands) |  | Amount |  | (In Thousands) |  | Amount |  | (Note 2) |  | (In Thousands) |  | % |  | Amount |  | (NT$) |  | Total Amount |  | Collateral
Stocks |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
TSMC Global |  |  | 11 |  |  | $ | 393,577,931 |  |  |  | - |  |  | $ | - |  |  |  | - |  |  | $ | - |  |  | $ | 4,159,339 |  |  |  | 11 |  |  |  | 100 |  |  | $ | 397,737,270 |  |  |  |  |  |  | $ | 397,737,270 |  |  | Nil
TSMC Partners |  |  | 988,268 |  |  |  | 52,339,094 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,049,173 |  |  |  | 988,268 |  |  |  | 100 |  |  |  | 53,388,267 |  |  |  |  |  |  |  | 53,455,518 |  |  | Nil
VIS |  |  | 464,223 |  |  |  | 9,006,126 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 21,446 |  |  |  | 464,223 |  |  |  | 28 |  |  |  | 9,027,572 |  |  | $ | 79 (Note 1 | ) |  |  | 36,812,923 |  |  | Nil
SSMC |  |  | 314 |  |  |  | 5,772,815 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 729,359 |  |  |  | 314 |  |  |  | 39 |  |  |  | 6,502,174 |  |  |  |  |  |  |  | 6,288,190 |  |  | Nil
TSMC North America |  |  | 11,000 |  |  |  | 4,269,393 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 300,432 |  |  |  | 11,000 |  |  |  | 100 |  |  |  | 4,569,825 |  |  |  |  |  |  |  | 4,569,825 |  |  | Nil
VisEra Tech |  |  | 253,120 |  |  |  | 4,531,929 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 9,812 |  |  |  | 253,120 |  |  |  | 87 |  |  |  | 4,541,741 |  |  |  |  |  |  |  | 4,508,249 |  |  | Nil
Xintec |  |  | 111,282 |  |  |  | 1,764,607 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 81,538 |  |  |  | 111,282 |  |  |  | 41 |  |  |  | 1,846,145 |  |  |  | 81 (Note 1 | ) |  |  | 8,958,195 |  |  | Nil
GUC |  |  | 46,688 |  |  |  | 1,299,423 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15,046 | ) |  |  | 46,688 |  |  |  | 35 |  |  |  | 1,284,377 |  |  |  | 241 (Note 1 | ) |  |  | 11,251,774 |  |  | Nil
TSMC Europe |  |  | - |  |  |  | 445,828 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 16,651 |  |  |  | - |  |  |  | 100 |  |  |  | 462,479 |  |  |  |  |  |  |  | 462,479 |  |  | Nil
TSMC Japan |  |  | 6 |  |  |  | 141,136 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,484 |  |  |  | 6 |  |  |  | 100 |  |  |  | 142,620 |  |  |  |  |  |  |  | 142,620 |  |  | Nil
TSMC Korea |  |  | 80 |  |  |  | 40,966 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (239 | ) |  |  | 80 |  |  |  | 100 |  |  |  | 40,727 |  |  |  |  |  |  |  | 40,727 |  |  | Nil
TSMC Solar Europe GmbH |  |  | 1 |  |  |  | (20,106 | ) |  |  | - |  |  |  | - |  |  |  | (1 | ) |  |  | - |  |  |  | 20,106 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |  |  |  | - |  |  | Nil
Subtotal |  |  |  |  |  |  | 473,169,142 |  |  |  |  |  |  |  | - |  |  |  |  |  |  |  | - |  |  |  | 6,354,257 |  |  |  |  |  |  |  |  |  |  |  | 479,543,197 |  |  |  |  |  |  |  | 524,227,770 |  |  |
Capital |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
TSMC China |  |  | - |  |  |  | 55,466,911 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,822,243 |  |  |  | - |  |  |  | 100 |  |  |  | 57,289,154 |  |  |  |  |  |  |  | 57,358,467 |  |  | Nil
TSMC Nanjing |  |  | - |  |  |  | 20,601,413 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 763,526 |  |  |  | - |  |  |  | 100 |  |  |  | 21,364,939 |  |  |  |  |  |  |  | 21,408,850 |  |  | Nil
VTAF III |  |  | - |  |  |  | 194,660 |  |  |  | - |  |  |  | 10,602 |  |  |  | - |  |  |  | - |  |  |  | 26,242 |  |  |  | - |  |  |  | 98 |  |  |  | 231,504 |  |  |  |  |  |  |  | 208,227 |  |  | Nil
VTAF II |  |  | - |  |  |  | 128,758 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (18,500 | ) |  |  | (35,163 | ) |  |  | - |  |  |  | 98 |  |  |  | 75,095 |  |  |  |  |  |  |  | 68,848 |  |  | Nil
Subtotal |  |  |  |  |  |  | 76,391,742 |  |  |  |  |  |  |  | 10,602 |  |  |  |  |  |  |  | (18,500 | ) |  |  | 2,576,848 |  |  |  |  |  |  |  |  |  |  |  | 78,960,692 |  |  |  |  |  |  |  | 79,044,392 |  |  |
Total |  |  |  |  |  | $ | 549,560,884 |  |  |  |  |  |  | $ | 10,602 |  |  |  |  |  |  | $ | (18,500 | ) |  | $ | 8,931,105 |  |  |  |  |  |  |  |  |  |  | $ | 558,503,889 |  |  |  |  |  |  | $ | 603,272,162 |  |  |

Note 1: | The unit price is calculated by closing price of the Taipei Exchange or the TWSE as of December 31,2019.

Note 2: | Mainly including share of profit or loss of subsidiaries and associates, share of other comprehensive income of subsidiaries and associates, cash dividends received from subsidiaries and associates, liquidation amount of subsidiaries and associates, etc.

- 100 -

STATEMENT 6

Taiwan Semiconductor Manufacturing Company Limited

Statement of CHANGE IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Item |  | Land |  | Buildings |  | Machinery and Equipment |  | Office Equipment |  | Total |  | Remark
Cost |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2019 |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  |
Adjustments arising from initial application of accounting standards |  |  | 14,825,426 |  |  |  | 429,023 |  |  |  | 2,559,303 |  |  |  | 17,505 |  |  |  | 17,831,257 |  |  |
Additions |  |  | 536,552 |  |  |  | 88,403 |  |  |  | - |  |  |  | 14,924 |  |  |  | 639,879 |  |  |
Deductions |  |  | (593,427 | ) |  |  | (8,717 | ) |  |  | - |  |  |  | (1,865 | ) |  |  | (604,009 | ) |  |
Transfers out of right-of-use assets |  |  | - |  |  |  | - |  |  |  | (619,779 | ) |  |  | - |  |  |  | (619,779 | ) |  |
Balance at December 31, 2019 |  | $ | 14,768,551 |  |  | $ | 508,709 |  |  | $ | 1,939,524 |  |  | $ | 30,564 |  |  | $ | 17,247,348 |  |  |
Accumulated depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2019 |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  |
Additions |  |  | 944,052 |  |  |  | 105,873 |  |  |  | 1,184,374 |  |  |  | 10,154 |  |  |  | 2,244,453 |  |  |
Deductions |  |  | (5,700 | ) |  |  | - |  |  |  | - |  |  |  | (766 | ) |  |  | (6,466 | ) |  |
Transfers out of right-of-use assets |  |  | - |  |  |  | - |  |  |  | (20,659 | ) |  |  | - |  |  |  | (20,659 | ) |  |
Balance at December 31, 2019 |  | $ | 938,352 |  |  | $ | 105,873 |  |  | $ | 1,163,715 |  |  | $ | 9,388 |  |  | $ | 2,217,328 |  |  |
Carrying amounts at December 31, 2019 |  | $ | 13,830,199 |  |  | $ | 402,836 |  |  | $ | 775,809 |  |  | $ | 21,176 |  |  | $ | 15,030,020 |  |  |

- 101 -

STATEMENT 7

Taiwan Semiconductor Manufacturing Company Limited

Statement of Short-term Loans

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Type |  | Balance, End of Year |  | Contract Period |  | Range of Interest Rates (%) |  | Loan Commitments |  | Collateral |  | Remark
Unsecured loans |  |  |  |  |  |  |  |  |  |  |  |
Crédit Agricole CIB |  | $ | 25,071,485 |  |  | 2019.09.27-2020.05.25 |  |  | 0.01 |  |  | USD | 1,100,000 |  |  | Nil |  | -
Bank of America |  |  | 14,994,000 |  |  | 2019.11.19-2020.01.14 |  |  | 2.16 |  |  | USD | 600,000 |  |  | Nil |  | -
DBS |  |  | 14,840,973 |  |  | 2019.10.30-2020.04.07 |  |  | 0.01 |  |  | USD | 500,000 |  |  | Nil |  | -
Sumitomo Mitsui Banking Corporation |  |  | 13,194,720 |  |  | 2019.11.08-2020.01.13 |  |  | 2.19-2.20 |  |  | USD | 500,000 |  |  | Nil |  | -
Megabank |  |  | 10,495,800 |  |  | 2019.11.06-2020.01.06 |  |  | 2.08-2.10 |  |  | TWD | 12,000,000 |  |  | Nil |  | -
ING Bank N.V. |  |  | 7,538,272 |  |  | 2019.12.27-2020.05.25 |  |  | 0.01 |  |  | USD | 1,000,000 |  |  | Nil |  | -
Standard Chartered Bank |  |  | 7,497,000 |  |  | 2019.12.04-2020.01.06 |  |  | 2.08 |  |  | USD | 450,000 |  |  | Nil |  | -
First Commercial Bank |  |  | 6,597,360 |  |  | 2019.11.08-2020.01.08 |  |  | 2.15 |  |  | TWD | 9,000,000 |  |  | Nil |  | -
JPMorgan Chase Bank N.A. |  |  | 5,697,720 |  |  | 2019.11.27-2020.01.09 |  |  | 2.22 |  |  | USD | 200,000 |  |  | Nil |  | -
Citibank Taiwan |  |  | 4,198,320 |  |  | 2019.11.08-2020.01.10 |  |  | 2.15 |  |  | USD | 145,000 |  |  | Nil |  | -
Hua Nan Commercial Bank Ltd. |  |  | 3,598,560 |  |  | 2019.12.05-2020.01.06 |  |  | 2.1 |  |  | TWD | 4,000,000 |  |  | Nil |  | -
BNP Paribas Taiwan |  |  | 1,799,280 |  |  | 2019.11.19-2020.01.13 |  |  | 2.16 |  |  | USD | 75,000 |  |  | Nil |  | -
Citibank Taipei |  |  | 1,499,400 |  |  | 2019.11.08-2020.01.07 |  |  | 2.15 |  |  | USD | 555,000 |  |  | Nil |  | -
The Bank of Tokyo-Mitsubishi UFJ, Ltd. |  |  | 1,499,400 |  |  | 2019.11.27-2020.01.09 |  |  | 2.22 |  |  | USD | 300,000 |  |  | Nil |  | -
Subtotal |  |  | 118,522,290 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Related parties |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
TSMC Global |  |  | 29,988,000 |  |  | 2019.07.18-2020.07.17 |  |  | - |  |  | USD | 1,000,000 |  |  | Nil |  | -
Total |  | $ | 148,510,290 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

- 102 -

STATEMENT 8

Taiwan Semiconductor Manufacturing Company Limited

Statement of ACCOUNTS Payables

December 31, 2019

(In Thousands of New Taiwan Dollars)

Accounts payables was NT$36,029,135 thousands. The amount of individual vendor does not exceed 5% of the account balance.

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STATEMENT 9

Taiwan Semiconductor Manufacturing Company Limited

Statement of Payables to Related Parties

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Vendor Name |  | Amount
TSMC China |  | $ | 1,538,971 |
TSMC Nanjing |  |  | 1,266,002 |
WaferTech |  |  | 1,097,625 |
Xintec |  |  | 736,747 |
SSMC |  |  | 487,944 |
Others (Note) |  |  | 589,346 |
Total |  | $ | 5,716,635 |

Note: | The amount of individual vendor in others does not exceed 5% of the account balance.

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STATEMENT 10

Taiwan Semiconductor Manufacturing Company Limited

Statement of Payables to Contractors and Equipment Suppliers

December 31, 2019

(In Thousands of New Taiwan Dollars)

Vendor Name |  |  |  | Amount
Vendor A |  |  |  | $ | 30,277,721 |
Vendor B |  |  |  |  | 23,758,769 |
Vendor C |  |  |  |  | 12,331,155 |
Vendor D |  |  |  |  | 10,909,698 |
Vendor E |  |  |  |  | 8,523,195 |
Others (Note) |  |  |  |  | 53,953,953 |
Total |  |  |  | $ | 139,754,491 |

Note: | The amount of individual vendor included in others does not exceed 5% of the account balance.

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STATEMENT 11

Taiwan Semiconductor Manufacturing Company Limited

Statement of LEASE LIABILITIES

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Item |  | Description |  | Lease Term |  | Discount Rate (%) |  | Balance, End of Year
Land |  | Mainly for the use of plants and offices |  | 2 to 22 years |  |  | 0.67-0.94 |  |  | $ | 13,882,035 |
Buildings |  | Mainly for the use of offices |  | 2 to 6 years |  |  | 0.67-0.71 |  |  |  | 397,849 |
Machinery and equipment |  | For operation use |  | 2 years |  |  | 3.24 |  |  |  | 842,185 |
Office equipment |  | For operation use |  | 1 to 3 years |  |  | 0.64-0.71 |  |  |  | 21,750 |
|  |  |  |  |  |  |  |  |  |  | 15,143,819 |
Less: Current portion |  |  |  |  |  |  |  |  |  |  | (1,843,556 | )
Noncurrent portion |  |  |  |  |  |  |  |  |  | $ | 13,300,263 |

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STATEMENT 12

Taiwan Semiconductor Manufacturing Company Limited

Statement of Accrued Expenses and Other Current Liabilities

DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Item |  | Amount
Refund liability |  | $ | 17,673,937 |
Contract liabilities |  |  | 4,095,915 |
Utilities |  |  | 2,758,347 |
Others (Note) |  |  | 18,583,433 |
Total |  | $ | 43,111,632 |

Note: | The amount of each item in others does not exceed 5% of the account balance.

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STATEMENT 1 3

Taiwan Semiconductor Manufacturing Company Limited

Statement of Bonds Payable

December 31, 2019

(In Thousands of New Taiwan Dollars)

|  |  |  |  |  |  |  |  |  | Amount |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Balance, |  |  |  |
|  |  |  |  |  | Interest |  | Coupon |  |  |  | Repayment |  | End of Year |  |  |  |
Bonds Name |  | Trustee |  | Issuance Date |  | Payment Date |  | Rate (%) |  | Total Amount |  | paid |  | (Carrying Value) |  | Repayment |  | Collateral
Domestic unsecured bonds-100-2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- B |  | Mega International Commercial Bank Co., Ltd. |  | 2012.01.11 |  | On 01.11 annually |  |  | 1.46 |  |  | $ | 7,000,000 |  |  | $ | 7,000,000 |  |  | $ | - |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-101-1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- B |  | Mega International Commercial Bank Co., Ltd. |  | 2012.08.02 |  | On 08.02 annually |  |  | 1.40 |  |  |  | 9,000,000 |  |  |  | 9,000,000 |  |  |  | - |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-101-2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- B |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2012.09.26 |  | On 09.26 annually |  |  | 1.39 |  |  |  | 9,000,000 |  |  |  | 9,000,000 |  |  |  | - |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-101-3 |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2012.10.09 |  | On 10.09 annually |  |  | 1.53 |  |  |  | 4,400,000 |  |  |  | - |  |  |  | 4,400,000 |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-101-4 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- B |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.01.04 |  | On 01.04 annually |  |  | 1.35 |  |  |  | 10,000,000 |  |  |  | - |  |  |  | 10,000,000 |  |  | Bullet repayment |  | Nil
- C |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.01.04 |  | On 01.04 annually |  |  | 1.49 |  |  |  | 3,000,000 |  |  |  | - |  |  |  | 3,000,000 |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-102-1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- B |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.02.06 |  | On 02.06 annually |  |  | 1.38 |  |  |  | 11,600,000 |  |  |  | - |  |  |  | 11,600,000 |  |  | Bullet repayment |  | Nil
- C |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.02.06 |  | On 02.06 annually |  |  | 1.50 |  |  |  | 3,600,000 |  |  |  | - |  |  |  | 3,600,000 |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-102-2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- A |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.07.16 |  | On 07.16 annually |  |  | 1.50 |  |  |  | 10,200,000 |  |  |  | - |  |  |  | 10,200,000 |  |  | Bullet repayment |  | Nil
- B |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.07.16 |  | On 07.16 annually |  |  | 1.70 |  |  |  | 3,500,000 |  |  |  | - |  |  |  | 3,500,000 |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-102-3 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- B |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.08.09 |  | On 08.09 annually |  |  | 1.52 |  |  |  | 8,500,000 |  |  |  | 8,500,000 |  |  |  | - |  |  | Bullet repayment |  | Nil
Domestic unsecured bonds-102-4 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
- C |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.09.25 |  | On 09.25 annually |  |  | 1.60 |  |  |  | 1,400,000 |  |  |  | 1,400,000 |  |  |  | - |  |  | Bullet repayment |  | Nil
- D |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.09.25 |  | On 09.25 annually |  |  | 1.85 |  |  |  | 2,600,000 |  |  |  | - |  |  |  | 2,600,000 |  |  | Bullet repayment |  | Nil
- E |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.09.25 |  | On 09.25 annually |  |  | 2.05 |  |  |  | 5,400,000 |  |  |  | - |  |  |  | 5,400,000 |  |  | Bullet repayment |  | Nil
- F |  | Taipei Fubon Commercial Bank Co., Ltd. |  | 2013.09.25 |  | On 09.25 annually |  |  | 2.10 |  |  |  | 2,600,000 |  |  |  | - |  |  |  | 2,600,000 |  |  | Bullet repayment |  | Nil
TOTAL |  |  |  |  |  |  |  |  |  |  |  | $ | 91,800,000 |  |  | $ | 34,900,000 |  |  |  | 56,900,000 |  |  |  |  |
Less: current portion |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (31,800,000 | ) |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 25,100,000 |  |  |  |  |

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ST ATEMENT 1 4

Taiwan Semiconductor Manufacturing Company Limited

Statement of NET REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

Item |  | Shipments (Piece) (Note) |  | Amount
Wafer |  |  | 10,050,665 |  |  | $ | 921,095,318 |
Other |  |  |  |  |  |  | 138,551,475 |
Net revenue |  |  |  |  |  | $ | 1,059,646,793 |

Note: | 12-inch equivalent wafers.

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STATEMENT 1 5

Taiwan Semiconductor Manufacturing Company Limited

Statement of Cost of Revenue

FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Item |  | Amount
Raw materials used |  |
Balance, beginning of year |  | $ | 14,110,534 |
Raw material purchased |  |  | 46,165,054 |
Raw materials, end of year |  |  | (15,046,116 | )
Transferred to manufacturing or operating expenses |  |  | (8,192,083 | )
Others |  |  | (247,853 | )
Subtotal |  |  | 36,789,536 |
Direct labor |  |  | 13,679,542 |
Manufacturing expenses |  |  | 473,793,547 |
Manufacturing cost |  |  | 524,262,625 |
Work in process, beginning of year |  |  | 70,405,998 |
Work in process, end of year |  |  | (49,268,466 | )
Transferred to manufacturing or operating expenses |  |  | (24,537,651 | )
Cost of finished goods |  |  | 520,862,506 |
Finished goods, beginning of year |  |  | 10,920,351 |
Finished goods purchased |  |  | 49,626,845 |
Finished goods, end of year |  |  | (8,533,179 | )
Transferred to manufacturing or operating expenses |  |  | (12,000,597 | )
Scrapped |  |  | (308,304 | )
Subtotal |  |  | 560,567,622 |
Others |  |  | 18,939,425 |
Total |  | $ | 579,507,047 |

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STATEMENT 1 6

Taiwan Semiconductor Manufacturing Company Limited

Statement of Operating Expenses

FOR THE YEAR ENDED DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars)

Item |  | Research and Development Expenses |  | General and Administrative Expenses |  | Selling Expenses
Payroll and related expense |  | $ | 28,605,548 |  |  | $ | 7,310,041 |  |  | $ | 2,141,162 |
Depreciation expense |  |  | 23,129,545 |  |  |  | 1,113,860 |  |  |  | 42,164 |
Consumables |  |  | 22,820,487 |  |  |  | 363,967 |  |  |  | 619 |
Repair and maintenance expense |  |  | 4,429,076 |  |  |  | 1,228,740 |  |  |  | 441 |
Service fee |  |  | 19,426 |  |  |  | 2,101,536 |  |  |  | 14,681 |
Management fees of the Science Park Administration |  |  | - |  |  |  | 1,928,907 |  |  |  | - |
Patents |  |  | - |  |  |  | 1,726,083 |  |  |  | - |
Commission |  |  | - |  |  |  | - |  |  |  | 859,045 |
Others (Note) |  |  | 11,478,733 |  |  |  | 4,580,193 |  |  |  | 173,665 |
Total |  | $ | 90,482,815 |  |  | $ | 20,353,327 |  |  | $ | 3,231,777 |

Note: | The amount of each item in others does not exceed 5% of the account balance.

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STATEMENT 1 7

Taiwan Semiconductor Manufacturing Company Limited

Statement of Labor, Depreciation and Amortization BY FUNCTION

FOR THE YEAR ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

|  | Year Ended December 31, 2019 |  | Year Ended December 31, 2018
|  |  |  |  |  | Classified as |  |  |  |  |  |  |  | Classified as |  |
|  |  |  |  |  | Other |  |  |  |  |  |  |  | Other |  |
|  |  |  | Classified as |  | Operating |  |  |  |  |  | Classified as |  | Operating |  |
|  | Classified as |  | Operating |  | Income |  |  |  | Classified as |  | Operating |  | Income |  |
|  | Cost of Revenue |  | Expenses |  | and Expenses |  | Total |  | Cost of Revenue |  | Expenses |  | and Expenses |  | Total
Labor cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salary and bonus |  | $ | 52,887,855 |  |  | $ | 34,021,777 |  |  | $ | - |  |  | $ | 86,909,632 |  |  | $ | 51,980,310 |  |  | $ | 34,454,020 |  |  | $ | - |  |  | $ | 86,434,330 |
Labor and health insurance |  |  | 2,688,910 |  |  |  | 1,828,610 |  |  |  | - |  |  |  | 4,517,520 |  |  |  | 2,691,200 |  |  |  | 1,708,463 |  |  |  | - |  |  |  | 4,399,663 |
Pension |  |  | 1,412,525 |  |  |  | 910,355 |  |  |  | - |  |  |  | 2,322,880 |  |  |  | 1,457,996 |  |  |  | 852,315 |  |  |  | - |  |  |  | 2,310,311 |
Board compensation |  |  | - |  |  |  | 376,433 |  |  |  | - |  |  |  | 376,433 |  |  |  | - |  |  |  | 378,092 |  |  |  | - |  |  |  | 378,092 |
Others |  |  | 1,513,328 |  |  |  | 919,576 |  |  |  | - |  |  |  | 2,432,904 |  |  |  | 1,604,091 |  |  |  | 878,328 |  |  |  | - |  |  |  | 2,482,419 |
|  | $ | 58,502,618 |  |  | $ | 38,056,751 |  |  | $ | - |  |  | $ | 96,559,369 |  |  | $ | 57,733,597 |  |  | $ | 38,271,218 |  |  | $ | - |  |  | $ | 96,004,815 |
|  | $ | 243,160,463 |  |  | $ | 24,285,569 |  |  | $ | 18,511 |  |  | $ | 267,464,543 |  |  | $ | 251,292,565 |  |  | $ | 23,020,118 |  |  | $ | 27,857 |  |  | $ | 274,340,540 |
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization |  | $ | 2,971,336 |  |  | $ | 2,367,550 |  |  | $ | - |  |  | $ | 5,338,886 |  |  | $ | 2,018,702 |  |  | $ | 2,334,145 |  |  | $ | - |  |  | $ | 4,352,847 |

Note 1: | For the year of 2019 and 2018, the Company had average 44,058 and 43,447 employees, respectively, which included 8 non-employee directors for both years.

Note 2: | Average labor cost for the year ended December 31, 2019 and 2018 were NT$2,183 thousand and 2,201 thousand, respectively.

Note 3: | Average salary and bonus for the year ended December 31, 2019 and 2018 were NT$1,973 thousand and 1,990 thousand, respectively. The average salary and bonus decreased by 0.85% year over year.

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