4.1. 2012-2013 Financial Statements – MediaTek & Subsidiaries

Changes that exceed 20% in the past two years and explanation for those changes:

(1) Debt ratio increased by 47% : primarily due to increase in short-term borrowings and other payables.

(2) Current ratio decreased by 26% and quick ratio decreased by 21%:primarily due to increase in current liabilities.

(3) Times interest earned increased by 33%: primarily due to increase in net income.

(4) Average inventory turnover increased by 37% and average inventory turnover (day) decreased by 25%: primarily due to increase in operating costs.

(5) Property, plant, and equipment ratio increased by 28%: primarily due to increase in operating Income.

(6) Return on total assets increased by 35%, return on equity increased by 39%, net profit margin increased by 29% , basic earnings per share increased by 60%, operating leverage decreased 28%, and pre-tax income to paid-in capital increased by 79%: primarily due to increase in operating Income, net income before income tax and net income.

(7) Cash flow ratio increased by 86% and cash flow reinvestment ratio increased by 2176%: primarily due to increase in net cash inflows from operating activities.

Note: 2008-2011 cash inflows from operating activities were in ROC GAAP.

4.2. 2009-2011 Financial Statements – MediaTek & Subsidiaries by ROC GAAP

4.3. 2012-2013 Financial Statements – Parent Company

Changes that exceed 20% in the past two years and explanation for those changes:

(1) Debt ratio increased by 34%: primarily due to increase in short-term borrowings and other payables.

(2) Times interest earned decreased by 85%: primarily due to increase in interest expenses.

(3) Average inventory turnover increased by 37%, average payment turnover increased by 30% and average inventory turnover days decreased by 27%:primarily due to increase in operating costs.

(4) Property, plant and equipment turnover increased by 54%: primarily due to increase in sales.

(5) Return on total assets increased by 38%, return on equity increased by 39%, basic earnings per share increased by 60%, operating leverage decreased by51% and pre-tax income to paid-in capital increased by 79%: primarily due to increase in operating income, net income before income tax, and net income.

(6) Cash flow ratio increased by 333%, and cash flow reinvestment ratio increased by 389%: primarily due to increase in net cash flow from operating activities.

Note: 2008-2011 cash inflows from operating activities were in ROC GAAP.

4.4. 2009-2011 Financial Statements – Parent Company by ROC GAAP

Glossary:

1. Capital Structure Analysis:

(1). Debt ratio = Total liabilities / Total assets

(2). Long-term fund to property, plant and equipment ratio = (Shareholders’equity + non-current liabilities) / Net property, plant and equipment

2. Liquidity Analysis:

(1). Current ratio = Current assets / Current liabilities

(2). Quick ratio = (Current assets – inventories – prepaid Expenses) /Current liabilities

(3). Times interest earned = Earnings before interest and taxes / Interest expenses

3. Operating Performance Analysis:

(1). Average collection turnover = Net sales / Average trade receivables

(2). Days sales outstanding = 365 / Average collection turnover

(3). Average inventory turnover = Operating costs / Average inventory

(4). Average payment turnover = operating costs / Average trade payables

(5). Average inventory turnover days = 365 / Average Inventory turnover

(6). Property, plant and equipment turnover = Net sales / Average property,plant and equipment

(7). Total assets turnover = Net sales / total assets

4. Profitability Analysis:

(1). Return on total assets = [Net income + Interest expenses x (1 – tax rate)] / Average total assets

(2). Return on equity attributable to shareholders of the parent = Net income attributable to shareholders of the parent / Average equity attributableto shareholders of the parent

(3) Pre-tax income to paid-in capital ratio = Income before tax / Paid-in capital

(4) Net margin = Net income / Net sales

(5). Earnings per share = (Net income attributable to shareholders of the parent – preferred stock dividend) / Weighted average number of shares outstanding

5. Cash Flow:

(1). Cash flow ratio = Net cash provided by operating activities / Current Liabilities

(2). Cash flow adequacy ratio = Five-year sum of cash from operations /Five-year sum of capital expenditures, inventory additions, and cash dividend

(3). Cash flow reinvestment ratio = (Cash provided by operating activities –cash dividends) / (Gross property, plant and equipment + Long-term investments+ other non current assets + working capital)

6. Leverage:

(1). Operating leverage = (Net sales – Variable cost) / Operating income

(2). Financial leverage = Operating income / (Operating income – Interest expenses)

Glossary (ROC GAAP):

1. Capital Structure Analysis:

(1). Debt ratio = Total liabilities / Total assets

(2). Long-term fund to fixed assets ratio = (Shareholders’ Equity +long-term liabilities) / Net fixed assets

2. Liquidity Analysis:

(1). Current ratio = Current assets / Current liabilities

(2). Quick ratio = (Current assets – Inventories – Prepaid Expenses) /Current liabilities

(3). Times interest earned = Earnings before interest and taxes / Interest expenses

3. Operating Performance Analysis:

(1). Average collection turnover = Net sales / Average trade receivables

(2). Days sales outstanding = 365 / Average collection turnover

(3). Average inventory turnover = Operating costs / Average inventory

(4). Average payment turnover = operating costs / Average trade payables

(5). Average inventory turnover days = 365 / Average Inventory turnover

(6) Fixed assets turnover = Net sales / Average net fixed assets

(7). Total assets turnover = Net sales / Average total assets

4. Profitability Analysis:

(1). Return on total assets = [Net income + Interest expenses x (1 – tax rate)] / Average total assets

(2). Return on equity = Net income / Average shareholders’ equity

(3) Operating income to paid-in capital ratio = Operating income / Paid-in capital

(4) Pre-tax income to Paid-in capital ratio = Income before tax / Paid-in capital

(5) Net margin = Net income / Net sales

(6). Earnings per share = (Net income– preferred stock dividend) / Weighted average number of shares outstanding

5. Cash Flow:

(1). Cash flow ratio = Net cash provided by operating activities / Current Liabilities

(2). Cash flow adequacy ratio = Five-year sum of cash from operations /Five-year sum of capital expenditures, inventory additions, and cash dividend

(3). Cash flow reinvestment ratio = (Cash provided by operating activities –cash dividends) / (Gross fixed assets + Long-term investments + other assets +working capital)

6. Leverage:

(1). Operating leverage = (Net sales – Variable cost) / Operating income

(2). Financial leverage = Operating income / (Operating income – Interest expenses)