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The total value of our equity portfolio amounted to NT$2.1 billion (US$71.7 million) as of December 31, 2010, which was approximately 88% less than the total value of our equity portfolio as of December 31, 2009. This decline was mainly due to the net selling-down of our portfolio, partially offset by the increase in equity prices over 2010. Compared to a net unrealized loss of NT$456.7 million on our equity portfolio at the end of 2009, we recognized a net unrealized gain of NT$208.2 million (US$7.1 million) on our equity portfolio as of December 31, 2010. This was mainly due to net selling-down of our portfolio, which turned unrealized gains or losses into realized gains or losses, and the increase in equity prices during 2010. For the year ended December 31, 2010, pursuant to R.O.C. and U.S. accounting regulations, no impairment charge was recognized .The value of our equity holdings fluctuates depending on the market conditions. However, we do not expect the gains and losses in the values of the equities that we hold to have a material impact on our financial condition and results of operations. 

## Other Market Risk 

We have made investments in convertible bonds and corporate bonds issued by domestic public companies with strong industry leadership and solid profits. Industries we invested include financial holdings, semiconductors and electronics. As of December 31, 2010, total value of our investments in convertible bonds and corporate bonds amounted to NT$145 million (US$5.0 million), of which, NT$43 million (US$1.5 million) convertible bonds were classified as financial assets at fair value through profit or loss and NT$102 million (US$3.5 million) corporate bonds were classified as available-for-sale financial assets on recognition. The fair values of these convertible bonds and corporate bonds are either based on quoted market prices or valued using market-based observable inputs including duration, yield rate and credit rating, which are subject to fluctuation based on many factors such as prevailing market conditions. However, we do not expect the gains and losses in the values of these investments to have a material impact on our financial condition and results of operations. 

## ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 

A. Debt Securities Not applicable 

B. Warrants and Rights Not applicable 

C. Other Securities Not applicable 

