CHICONY - Annual Report 2019 | FinancialReports.eu

Stock Code: 2385 Annual Report is available at Company Website: http://www.chicony.com.tw Market Obervation Post System: http:mops.twse.com.tw

Chicony Electronics Co., Ltd. 2019 Annual Report

Printed on May 15, 2020

1. The names, title, telephone numbers, and e-mail addresses of the Spokesperson and Deputy spokesperson:

Spokesperson:

Name: Lin, Yu-Ling Title: Vice General Manager of the Financial and Administrative Department Telephone: +886-2-6626-6788

Deputy Spokesperson: Name: Yang, Wan-Ting Title: Deputy Director of Investor Relations Division of the Financial and Administrative Department Telephone: +886-2-6626-6788

Spokesperson email address: [email protected]

2. Headquarter, branch office and factories:

Address of Headquarter: No. 69, Sec. 2, Guanfu Rd., Sanchong Dist., New Taipei City 241, Taiwan (R.O.C.)

Phone number of Headquarter: +886-2-6626-6788

3. The name, address, website, and telephone number of the stock transfer agent:

Name: CTBC Bank

Address: 5F, No.83, Sec. 1, Chongcing S. Rd., Jhongjheng District, Taipei City 100, Taiwan (R.O.C.)

Phone number: +886-2-6636-5566 (stock code: 2385)

Website: http://ecorp.ctbcbank.com/cts/index.jsp

4. The names, office name, address, website, and telephone number of the

verifying CPAs of the most recent financial report:

CPSs: Chen, Chin-Chang / Weng, Shih-Jung Company: PricewaterhouseCoopers Taiwan

Address: 27F, No. 333, Sec. 1, Keelung Rd., Xinyi Dist., Taipei City 110, Taiwan (R.O.C.)

Phone number: +886-2-2729-6666 Website: http://www.pwc.tw/

5. The name of the Exchange where the overseas securities are listed and the ethod for querying the information of the overseas securities:

None

6. Company website:

http://www.chicony.com.tw

Page

Chicony Electronics CO., Ltd. Table of Contents

	Chicony Electronics CO., Ltd. Table of Contents Page
I. Letter	to Shareholders
1	2019 Performance (including implementation results, financial revenue and
	expenditure, profitability analysis, research and development status) ........................... 1
2.	2020 Business Project Summary (macroeconomic environment, industry trend,
	guidelines for management, important production and marketing policies)................... 1
3.	Company development strategy and impact from external competition, laws and
	regulations, and the overall operating environment in the future ................................... 6
II. Company Profile
1.	Date of Incorporation ................................................................................................... 7
2.	Company history and development .............................................................................. 7
III. Corporate Governance Report
1.	Organization System (including the job functions of major departments) ................... 13
2.	Profiles and Remuneration (association with operationg performance) of the
	Directors, Supervisors, General Manager, Vice General Managers, Assistant Vice
	General Managers, Function Heads, and Branch Heads.............................................. 16
3.	Corporate Governance in action ............................................................................... 36
	(1) Status on Implementation of Board of Directors ............................................. 36
	(2) Status on Operation of Audit Committee or Participation of Supervisors in
	the Operation of the Board of Directors .......................................................... 39
	(3) The difference Between the Corporate Governance Implementation and the
	Corporate Governance Best Practice Principles for TWSE/GTSM-Listed
	Companies and Reasons ................................................................................. 43
	(4) If the Company has Established a Remuneration Committee, Disclose its
	Organization, Function, and Operation ........................................................... 54
	(5) Fulfillment of Corporate Social Responsibility. Differences from
	“Corporate Social Responsibility Best Practice Principles for TWSE/GTSM
	Listed Companies”and reasons from the differences ........................................ 58
	(6) The Company’s Performance of Ethical Corporate Management and the
	Difference from the Ethical Corporate Management Best Practice
	Principles for TWSE/GTSM Listed Companies, and the reasons for the
	difference ....................................................................................................... 67
	(7) Established Corporate Governance Rules and Related Regulations and
	How to Find the Corporate Governance Rules, Related Rules, and
	Regulations .................................................................................................... 75
	(8) Other Important Information to Increase Understanding of Corporate
	Governance Operations .................................................................................. 75
	(9) Status of Implementation of Internal Control System (including Statement
	of Internal Control and Audit Report of CPA) ................................................. 76
	(10) The Punishment Inflicted on the Company or Its Internal Personnel, or
	Any Disciplinary Penalty by The Company Against Its Internal Personnel
	For Violation of The Internal Control System, Where The Result of Such
	Penalty Could Have a Material Effect on Shareholder Equity or Securities
	Prices, The Main Shortcomings, and Condition of Improvement .................... 78

	(11) Important Resolutions Made by the Shareholders’ Meeting and Board
	Meeting (including the implementation of the Shareholders' Meeting) ............ 78
	(12) The Main Contents of Important Resolutions Passed by the Board of
	Directors Regarding in which Directors or Supervisors have Voiced
	Differing Opinions on the Record or in Writing .............................................. 82
	(13) Summary of Resignation or Dismissal of Personnel (including the
	Chairman of Board, President, Financial Manager, Accounting Manager,
	Internal Audit Manager and R&D Manager, etc.,) ........................................... 83
	(14) Certification of Employees Whose Jobs are Related to the Company’s
	Financial Information ..................................................................................... 83
4.	Auditing fees for the CPAs ......................................................................................... 84
5.	Replacement of CPAs ................................................................................................ 85
6.	The Company’s Chairman, General Manager, or any Managerial Officer in Charge
	of Finance or Accounting Matters has in the Most Recent Year Held a Position at
	the Accounting Firm of its CPA or at an Affiliated Enterprise's Situation .................... 85
7.	The Transfer of Equity Shares or Change in the Pledge of Shares under lien by the
	Directors, Supervisors, Managers, and Shareholders Holding More than 10% of
	the Shares .................................................................................................................. 86
8.	Information on Relationships Among the Top Ten Shareholders ................................. 88
9.	Investment by Directors, Supervisors, Managers, Groups of Direct or Indirect
	Control in the Investment Business, and to Calculate the Combined Shareholding
	Percentage ................................................................................................................. 90
IV. Status	of Financing
1.	Capital and Shares ..................................................................................................... 91
	(1) Sources of equity capital ............................................................................... 91
	(2) Structure of shareholders ................................................................................ 93
	(3) Dispersion of equity shares ............................................................................. 93
	(4) List of major shareholders .............................................................................. 94
	(5) Market price, net value, earnings, and dividends per share and related
	information .................................................................................................... 94
	(6) Dividend Policy and Distribution of Earnings at this Shareholders’
	Meeting .......................................................................................................... 95
	(7) The effect of the proposal for paying stock dividends in the current session
	of the Shareholders Meeting on the operation performance, and earnings
	per share of the Company ............................................................................... 95
	(8) Remuneration to the employees, Directors, and Supervisors ......................... 95
	(9) The repurchase of Company shares by the Company .................................... 96
2.	Information on Corporate Bonds ................................................................................ 97
3.	Information on Preferred Shares ................................................................................ 97
4.	Information on Overseas Depository Receipts ............................................................ 97
5.	Information on Employee Stock Options (ESO) ......................................................... 97
6.	Information on Restricted Stocks ............................................................................... 97
7.	Status of New Share Issuance in Connection with Mergers and Acquisitions
	(including mergers, acquisitions, and divisions) or Transferred Company Shares ....... 97
8.	The implementation of the fund utilization plan ......................................................... 97

V. Operational Highlights

1.	Business Overview .................................................................................................... 98
	(1) Business Scope ............................................................................................... 98
	(2) Industry Overview (including industry status, development, and the
	interrelationships among the industry of the upstream, midstream, and
	downstream)................................................................................................. 101
	(3) R&D and Technology Overview ................................................................... 108
	(4) Long-term and Short-term Business Development Plans .............................. 110
2.	Market, Production, and Sales Overview.................................................................. 111
	(1) Market Analysis ........................................................................................... 111
	(2) Primary Purpose of the Products and Production Process .............................. 116
	(3) Supply of Key Materials ............................................................................... 120
	(4) Names of the Vendors (Customers) Accounting for More Than 10% of the
	Total Purchase (Sale), and the Amount of Purchase (Sale) in Proportion to
	Total Purchase (Sale) .................................................................................... 120
	(5) Production Volume Table.............................................................................. 122
	(6) Sales Volume Table ...................................................................................... 122
3.	Number of Employees, Average Seniority, Average Age, and Education
	Distribution Ratio .................................................................................................... 122
4.	Information on Environmental Protection Spending ................................................. 123
5.	Labor Relations ....................................................................................................... 123
6.	Vital contracts .......................................................................................................... 125
VI. Financial Highlights
1.	Concise Balance Sheet, Statement of Comprehensive Income, and Audit Situation
	for the CPA of the Recent 5 Years ............................................................................ 126
2.	Financial Analysis of the Recent 5 Years .................................................................. 131
3.	Supervisor Audit Report in the Financial Report in 2019 .......................................... 137
4.	2019 Consolidated Financial Statements with Subsidiaries Audited by the CPA ....... 138
5.	2019 Separate Financial Statements Audited by the CPA.......................................... 255
6.	Whether Financial Difficulty of the Company and Affiliated Enterprises Occurred,
	and the Impact on the Company's Financial Position ................................................ 372
VII. Review and Analysis of Financial Position, Performance and Risks
1.	Financial Position .................................................................................................... 373
2.	Financial performance ............................................................................................. 374
3.	Cash flows ............................................................................................................... 375
4.	Major capital expenditures and their effect on the financial position and operation
	of the Company ....................................................................................................... 375
5.	Direct investment policy and the main cause of profit or loss, remedial plan, and
	investment plan for the year ahead ......................................................................... 376
6.	Analysis and Assessment of Risk Issues ................................................................... 378
	(1) The effect of fluctuation of interest rate, exchange rate, and inflation on the
	income position of the Company, and remedy: ............................................. 378
	(2) The policy of engagement in high risk and high leverage investment,
	loaning to a third party, undertaking of endorsements/guarantees in favor
	of a third party, and derivative trade, and the main cause of profit or loss
	and remedy in the future ............................................................................... 378

	(3)	R&D plan in the future, and projected commitment of R&D expenses ......... 379
	(4)	The effect of changes in important policies and the regulatory environment
		at home and overseas on the financial and operation performance of the
		Company and the remedy ............................................................................. 379
	(5)	The effect of changes in the technological and industrial environment on
		the financial and operation performance of the Company and the remedy.....379
	(6)	The effect of changes in corporate image on crisis management of the
		enterprise and remedy .................................................................................. 379
	(7)	Expected results and possible risks from mergers and acquisitions, and the
		remedy ......................................................................................................... 380
	(8)	Expected results and possible risks from capacity expansion, and the
		remedy.........................................................................................................380
	(9)	Risks deriving from concentration of purchase or sale, and the remedy ........ 380
	(10)	Effect and risks of sizable transfers or swaps of equity shares by Directors,
		Supervisors, and dominant shareholders holding more than 10% of the
		stake of the Company, and the remedy .......................................................... 380
	(11)	Effect and risks from the changing of hands in management and the
		remedy ......................................................................................................... 380
	(12)	Litigious or Non-litigious Matters and Responding Measures ................... 380
	(13)	Other Important Risks and Responding Measures (description of
		information security risk assessment interpretation and responding
		measures) ..................................................................................................... 380
7.	Other Materiality.....................................................................................................381
VIII. Additional Information
1.	Affiliates Consolidated Business Report, Affiliates Consolidated Financial
	Statement Letter ....................................................................................................... 382
2.	Status of Private Placement of Securities.................................................................. 399
3.	Status of Subsidiary Companies Holding or Disposal of the Company’s Stock ......... 399
4.	Other Supplementary Information ............................................................................ 399
IX.	Matters According to Article 36.3.2 of the Securities and Exchange
	Act of Taiwan in the Most Recent Year and up to the Date of Printing
	of this	Annual Report Which Have Significant Impact on the
	Shareholders’ Equity or Stock Price........................................................ 400

I. Letter to Shareholders

Dear Shareholders:

2019 Performance

(1) 2019 Operational Result

The 2019 Consolidated Revenue reached $92,552,325 thousand, which was an increase of 6% compared to 2018. Our Operating Profit amounted to $6,269,465 thousand, while the Net Profit amounted to $5,838,817 thousand, an increase of 35% and 63% respectively compared to 2018.

(2) Financial Highlights and Profitability Analysis
Financial Highlight

Units: NTD thousands

. Financial Highlight			Units: NTD thousands
Item	2018	2018	Increase(decrease)
OperatingProfit	6,269,465	4,649,536	34.84%
Net Profit	5,838,817	3,590,711	62.61%
Average Total Assets	70,188,083	68,193,144	2.93%
Average Shareholder Equity	25,673,265	23,935,896	7.26%

Profitability

Average Shareholder Equity 25,673,265 . Profitability	23,935,896	7.26%
Item	2019	2018
Return on Average Assets(%)	8.32	5.27
Return on Average Shareholder Equity (%)	22.74	15.00
Operating Profit on End-of-Period Shareholder Equity (%)	85.36	63.66
Net Profit Margin(%)	6.31	4.11
Earningsper Share(EPS)in NTD(Note)	8.45	5.22

Note: Earnings per share is the amount of employee remuneration that is not distributed based on earnings and the number of new shares issued through capitalization of earnings before retroactive adjustment.

(3) Research and development

In 2019, the Company and its subsidiaries spent approximately $3,369,287 thousands on product development, automation production equipment, and process improvement. Solid R&D ability is Chicony’s crucial competitiveness to face fast-changing industry environment. To cultivate and attract more and more excellent R&D talents, Chicony has cooperated with National Taipei University of Technology by providing “Chicony R&D scholarship” and has created a “C&T laboratory” for potential R&D candidates. Aiming to innovative technology trend, Chicony will continuously develop cutting edge products including keyboards, power supplies, smart home products (including smart speakers, smart doorbells, and IP cams, etc.) to attract more clients and win more business opportunities.

2. 2020 Business Project Summary

(1) 2020 Business Target and Business Outlook

The economic growth rate of the Asia Pacific region used to be the highest in the world, accounting for more than two-thirds of the global growth. However, the continuing tense trade war between China and the United States and the recent new coronavirus epidemic have disrupted the global supply chain, and governments of various countries have adopted tourism bans which severely damaged the tourism industry; these have

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dragged down the economies of Asian countries. In addition, the anti-delivery to China struggle in Hong Kong and the tense relationship between Japan and South Korea have further deepened regional tensions and continued to raise geopolitical risks. All these factors have led to a decline in the overall GDP of Asia, and it is expected that the GDP of Asia outside China and India will decline by 0.5% in 2020. Research institutes estimate that the global economic growth rate in 2020 is about 2.53%, lower than 2.62% in 2019, which is the third consecutive year of slowdown since the peak of 3.42% in 2017. Although the annual growth rate of global commodity exports in 2020 has changed from a negative growth of 2.24% in 2019 to a positive growth of 1.65%, it is still significantly lower than 9.54% in 2018 and 10.78% in 2017.Economic growth of major economies in 2020: the U.S. forecast is 2.06% (lower than 2.31% in 2019), but the growth rate will rise quarter by quarter. The EU (excluding the U.K.) forecast is about 1.10%, lower than 1.42% in 2019. China's original forecast is 5.80%; however, affected by the new coronavirus epidemic, its economic growth will be impacted at least for one to two quarters, and in the worst-case scenario it is likely to be less than 5%, a record low since 1991. Only emerging market countries have an estimated economic growth rate of 4.22%, an increase of about 0.1% compared with that in 2019. In 2020, under the uncertainties of US trade policy, the change of financial situation in emerging markets, the economic and financial downturn in mainland China, and the "spillover effect" of the new coronavirus epidemic on other Asian markets, the world will be in a highly unstable situation where the financial environment may suddenly and severely tighten.

The scale of the PC market has been shrinking year by year and the purchase of consumer models has declined significantly. Fortunately, the support of the commercial market and the gaming field with a large increase in demand since 2013 has slowed down the decline of PC shipments. However, there was no debut of heavyweight PC games to spur the purchase in the gaming market in 2019 and other than that the existing gaming machine specifications are sufficient for PC games, the rapid improvement of mobile phone specifications and efficiency and the launch of new mobile phone games are the main reasons for the slowdown of gaming demand. Fortunately, the trend of machine change in the commercial market due to the launch of Windows 10 and the Sino-US trade war urge manufacturers to store goods in advance and recently artificial intelligence (AI), Internet of Things (IOT), business intelligence, blockchain and big data have become the standard equipment of enterprises, enterprises are urged to accelerate their update of PC equipment responsible for data processing and analysis and give PCs a new wave of growth momentum.

NB products have been developed well; recently the production has been maintained at about 150 million units, and the growth momentum is mainly driven by the growth of gaming NB and the trend of PC upgrade due to business needs. In 2019, due to the SinoUS trade war, the NB market had an expected shipment growth of 1.6% due to vendors’ advance preparation of inventory and not-so-bad performance of Chromebook. However, the doubts about the Sino-US trade war in 2020 are not removed. Although most of the enterprises have arranged non-mainland China overseas production capacity, the cost will still significantly increase and the overall shipment is expected to decline in 2020. Looking forward to the design of the next generation of NB, after the mass production of flexible panels, the folding screen is bound to bring new topics, and new business opportunities are expected to be found in the NB industry which has been weak for many years.

As consumers have realized the functions and advantages of smart home solutions and the price of related devices and services has declined, research institutes estimate that the global sales of smart home devices, the number of households with smart home devices

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and the overall smart home spending including related hardware devices, software and services will continue to grow in the next few years. In 2019, the global overall smart home spending will continue to grow, and the annual increase of shipments is 26.9%. In terms of device types, video entertainment devices continue to rank the top of all devices. In 2023, it is expected to be surpassed by the safety devices for family monitoring, and among safety control products, monitoring cameras account for the highest proportion (20%). As the Company's main focus is on smart home monitoring products, the explosive growth of the products can be expected.

Due to the high level of client inventory, 2019 was a relatively sluggish year for the server industry, but the end of inventory digestion has come. Due to the continuous digital transformation of enterprises, the gradual fermentation of AI applications and the active promotion of hybrid cloud by cloud operators, the global server shipment volume is expected to grow by about 5% in 2020. In the medium and long term, the driving force above will continue, plus the explosive increase of 5G data transmission volume in 2023 which may drive calculation demands, it is estimated that the CAGR of global server shipments in 2019 ~ 2024 will reach 6.5%, which is a great help to the subsidiary Chicony Power which produces server power supply.

The Company continuously optimizes the product mix and actively improves the gross profit margin. Two major products: smart home products (including smart speakers, smart doorbells, wireless network cameras and other security control devices) and gaming related products (including keyboards and power supplies) are growing rapidly, of which the revenue of smart home related products accounts for 34%; the revenue of gaming keyboard products among PC products accounts for about 9%. The price of gaming keyboard is much higher than that of ordinary keyboard and is a big boost to the Company's revenue. Traditional PC keyboard products, benefiting from the market penetration of built-in backlight high unit-price keyboard, have grown from only 15% in 2015 to the present 37%, driving the growth of overall profits. The Company has also launched a global operation plan, and the production bases include China and Southeast Asia. At present, the new factory in Thailand of Southeast Asia is under construction, which is expected to be completed in the third quarter of 2020. In the future, the capacity of the new factory in Thailand will account for about 20% of the overall revenue. The subsidiary Chicony Power has been active in the server field, and its long-term layout of CRPS server power has received orders from major manufacturers one after another. In addition, driven by high-value products such as type-C laptops, game consoles and large wattage laptops, both the Company’s revenue and profit have grown. Moreover, the expansion plans for the Suzhou Wujiang plant and the Thailand plant have been launched; the Wujiang plant is expected to be put into production in the second quarter of 2020, and Thailand plant in the fourth quarter of 2020.

In 2020, the management team of the Company will remain highly confident to actively face the rapid changes in the industry and external challenges and to integrate resources of the group. In addition to the research, development and sales of niche products like original keyboards, digital image, and power supply, non-PC products, such as gaming, server, game console, smart home and IoT, are able to enter markets with potential and application areas with high value-added as these products have stable growth. With the support of these high value-added products, the revenues and profits of the Company also shares a stable growth simultaneously. In addition to the market analysis made by the aforementioned major research institutions, the Company also takes production planning and the operating performance in the past into consideration based on the estimated demands of customers. It is estimated that the number of product sale for PC peripheral devices, digital image, consumer electronic products, and other electronic

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products of the Company will be 195.6 million, and the number of PC peripheral devices, game consoles, and network communication and other electronic products of subsidiaries Chicony Power Technology and XAVi Technologies Corporation is 172.2 million and 4.5 million respectively.

(2) Business strategies

The Company will continue to uphold the faith of sustainable and integrity operation and the principle of “No Quality, No Sales,” to provide customers with satisfying services, and continue to fulfill the growth in Company revenues and profits in order to give back to our shareholders, employees and society. The operating strategies for products, production, marketing, research and development, human resources, and finance perspectives are described as follows:

Products:
(1) Keep developing high gross-margin and differentiated products in keyboard, power supply, and smart home businesses.
(2) Integrate unique technology advantages including image, Wi-Fi, power control, and software to develop higher value-added products.
(3) Escalate Non-PC products revenue proportion including cloud computing and gaming power supply products, smart home products and smart building solution applications, and IOT-wearable devices.
Production:
(1) Expand economics of scale in keyboard, image, and power supply products, escalate efficiency of productivity, and strictly control the quality of products.
(2) Enhance the VMI (Vendor Managed Inventory) system with the information provided by EDI and ERP to react customer needs in time, so as to reduce storage cost and improve flexibility and efficiency of delivery and production.
(3) Enhance bargain power by integrating Chicony group procurement resources and integrating common materials of the Group.
(4) Purchase key components directly from the original suppliers to reduce raw material costs.
(5) Keep finding more appropriate suppliers of key components, to create strategic vertical integration to enhance complement and expand economics of scale.
(6) Accelerate the establishment of new manufacturing site in Thailand and continue to escalate the level of automationto effectively improve production efficiency.
Marketing:
(1) Provide customer “ONE STOP SHOPPING” menu by integrating Chicony group product lines so as to meet the product demands of customers and to create the greatest profits by the most efficient marketing resources.
(2) Continue to extend the customer base and market share of keyboard, digital image (DV, IPC CAM and lens module) and power supply products.
(3) Expand new products including smart home, IP CAM, IOT-wearable devices, and drones.
(4) Create CFT (Customer Focus Team) so as to integrate Chicony group marketing resources and deeply cultivate crucial customers.
Research and Development:
(1) Collaborate with crucial international hardware/software customers and suppliers so as to control key technologies and create valuable new products together.
(2) Create technology advantages by I.P. Know-How so as to set entry barriers.
(3) Keep developing VA/VE (value analysis/value engineering) and improve product design to increase productivity efficiency and reduce production cost.

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(4) Provide “Chicony R&D scholarship” to encourage more excellent R&D talents for developing greater R&D ability and efficiency.
(5) New Product Business Division keeps developing new product opportunities so as to create more blue-ocean market for Chicony.
(6) Establish Intellectual Property Center to obtain and protect patents belongs to Chicony group as well as manage cross-licensing of patents.
Human Resources:
(1) Keep providing profession and management training courses to cultivate employees’ professional technique and self-development.
(2) Help employees develop stable self-career plan with position rotation and job deputy, and, there through, the work capacity and position experience can be continuously applied and inherited for eternal operation purpose.
(3) Promote corporate social responsibility activities and allocate certain ratio of the company’s profits to help disadvantaged minorities in the education and medical perspectives. Cooperate with known colleges to cultivate young talents for potential manpower cultivation to present the solid result of corporate social responsibility of the Company.
(4) Keep pace with HR development and policy trend globally and react in time to maintain mutual benefits for both employer and employee.
(5) Concern for our employees thoroughly to inspire and keep excellent manpower with a profound retaining system and employee housing plans.
Finance
(1) Supervise budget control and carefully manage accounts receivable, inventory, and cash turnover.
(2) Strictly manage the tax-preserving materials and ensure the conduct of taxpreserving materials follow the legal regulation in other countries to make sure the company can benefit from the custom tax.
(3) Keep improve debt ratio, stock and finance affairs, and corporate governance.
(4) Adequately hedge against fluctuations in exchange rates and raw material costs.
(5) Conduct the most appropriate tax planning for the entire Chicony Group by thorough study of relevant tax laws and regulations in related countries.
(6) Minimize the interest cost and plan the middle and long term fund facility according to the trend of interest rate.
(7) Keep seeking companies with growth potential or complementary strengths as for investment object or future strategic alliance.

(3) Important production and marketing policies

Focus on the top 10 global brands of manufacturers in personal computers, notebooks, and image products. By increasing our business shares among these growing companies, we are able to expand our global market shares and strengthen our position.
Integrate our competitive advantages of multiple product lines, cross-selling, and collaborate material procurement resources.
Establish in-time warehouses logistic system to shorten product delivery time and gain advantages compare to our competitors.
Review and adjust production process to the optimum status. Adopt automatic production to increase productivity efficiency.
Establish VMI (Vendor Managed Inventory) system to enhance material delivery efficiency and reduce stocks of inventory.
Enhance current ERP system and provide management index information. Establish Business Policy Making room with timely information for decision making.

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  7. Accelerate the establishment of new manufacturing site in Thailand to satisfy customer demands and diversify risks.

Company development strategy and impact from external competition, laws and regulations, and the overall operating environment in the future:
These subjects are covered in the 2020 Business Plan summary. In addition, the operation of the Company is handled in accordance with laws and regulations. The Company operation has not been affected by the amendments of laws and regulations.

We wish our shareholders

Health and Good Luck

Chairman: Kent Hsu

General Manager: Roger Lu

Chief Accounting Officer: Molly Lin

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II. Company Profile

I. Date of Incorporation: February 22, 1983
II. Company history and development
1983 – The Company was found by Mr. Yi Jen Li, the former Vice Chairman and Mr. Wei Nan Lu, the former Vice General Manager, initiated the Company with registered capital of NT$ 2,000,000 and engaged in the trade of computer peripheral products.
1985 – Mr. Kun Tai Hsu, the current Chairman, joined the Company and began to produce compatible product keyboards for APPLE and IBM.
- In order to add equipment, the Company issued new shares to raise capital of NT$14,000,000.
- In 1985, the revenue reached NT$39,000,000.
1986 – In 1986, the revenue reached NT$293,000,000, which was about 7.5 times compared to 1985.
1987 – The Company established the portable PC computer project.
- In order to add equipment, the Company issued new shares to raise capital of NT$47,000,000.
- The Company established the business unit (including the portable product and keyboard business unit).
- The Company made a contract and purchased a HP-3000 computer to conduct computerization.
- In 1987, revenue reached NT$585,000,000, which was doubled compared to 1986.
1988 – The Company was selected as one of the five major manufacturers of computer keyboards in the world by PC CLONES MAGAZINE.
- The Company got formal approval to invest in Chicony Electronics (Thailand) by the Department of International Cooperation, Ministry of Economic Affairs.
- The Company made new shares to raise capital in cash and capitalization of retained earnings amounting to NT$57,000,000.
- The laptop computer LT3400 officially began mass production.
In 1988, the revenue reached $801,000,000, which was an increase of 37% compared to 1987.
1989 – Keyboard KB-5581 (KEYBOARD WITH TRACKING BALL) was awarded the Good Design Award.
- The factory of Thailand officially began to produce, and we created the first overseas products of the business unit.
- The Company bought the Nankan Factory in Lujhu Township of Taoyuan City (Taoyuan Factory) that covers an area of 4,500 acres.
- In response to the rapid growth of revenue, the Company issued new shares to raise capital of NT$78,000,000 with the subsequent capitalization of NT$198,000,000 for the demand for working capital.
- The Company established the Motherboard Business Unit.
- In 1989, the revenue reached NT$1,585,470,000, which was doubled compared to 1988.

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The Ministry of Economic Affairs approved the Company to establish Chicony Overseas Inc. (COI), which operates PC products and peripheral equipment to strengthen foreign sales networks and customer services.
1990 – The Company established Hipro Electronics (TAIWAN) CO., LTD, which operate the Power Supply Unit.
Ranked among the Top 100 Taiwan Enterprises by the excellent performance of imports and exports.
Awarded with the Minister of the Ministry of Economic Affairs Prize of the Executive Yuan as a Company using the private brand of the trademark in overseas sales.
The Company established the completed overseas market sales network and production base through formally investing in Chicony Overseas Inc. (COI), holding 100% of its equity, and reinvested separately in the Company's distributors in the US and Europe, Chicony America Inc. (CAI), Chicony Electronics. GmbH (CEG) and Thailand's production base Chicony Electronics (Thailand) Co., Ltd. (CET).
The Nankan Factory in Lujhu Township of Taoyuan City began official operation.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company issued new shares to raise capital of NT$802,000,000 with subsequent capitalization of NT$1,000,000,000 and supplemental public issuance.
1991 – Mr. I Jen Li, the General Manager, was awarded the 45th National Outstanding Excellent Merchant of the Gold Merchant Awards of the Republic of China.
Mr. Mao Kuei Lin, Senior Vice General Manager was awarded the 9th Outstanding Production Manager of the Republic of China.
Office building groundbreaking in the Wugu industrial area began.
The Company made capitalization of retained earnings amounting to NT$120,000,000.
1992 – The Company planned a Motherboard factory in Thailand.
Keyboard KB-5591 was awarded The National Product Image Award.
1993 – The head office was completed and opened in Wugu. 1994 – The keyboard factory officially opened and began mass production in China. 1995 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company issued new shares to raise capital of NT$380,000,000 with subsequent capitalization of NT$1,500,000,000.
1996 – The Company ended the Motherboard Business Unit.
The Company reduced capital and raised capital in cash, NT$300,000,000 each.
Indirect investment in Chicony Electronics (UK) Ltd. through Chicony Overseas Inc. to operate keyboard sales.
1997 – Hipro Electronics (TAIWAN) CO., LTD. listed stocks in Thailand.
Keyboard KWD-601 was awarded The Best Product Award by the German version of Chip Magazine.
Mr. Yi Jen Li was elected as the Vice Chairman by the Board of Directors, and Mr. Mao Kuei Lin was promoted to General Manager from Executive Vice General Manager.

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1998 – The monthly sales volume of keyboards reached 2.5 million units, and the performance jumped to number one in the world.
Indirect investment in Chicony Electronic (Dongguan) Co., Ltd. through Chicony Overseas, Inc. to operate keyboard production and sales.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled the capitalization of additional paid-in capital into new shares (including employee bonuses) and additional paid-in capital amounting to NT$324,804,270 with subsequent capitalization of NT$1,824,804,270.
1999 – On January 5, 1999, the stock was officially listed on the Taiwan Stock Exchange Corporation.
– Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) and additional paid-in capital amounting to NT$397,395,730 with subsequent capitalization of NT$2,222,200,000.
2000 – The Company applied for Hipro Electronics (TAIWAN) CO., LTD stock to be delisted in Thailand, and the shareholding ratio increased from 32.29% to 75.33% through buyback by Chicony Overseas, Inc.
– The Company established the Digital Image Business Unit. – The Company ended the Notebook Computer Business Unit.
2001 – Indirect investment in Chicony Electronic (SuChou) Co., Ltd. through Chicony Overseas, Inc. to operate computer keyboard production and sales and computer keyboard domestic sales in China.
2002 – The Company raised shares of stock to 99.8% for Hipro Electronics (TAIWAN) CO., LTD.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) and additional paid-in capital amounting to NT$397,395,730 with subsequent capitalization of NT$2,222,200,000.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$273,250,000 with subsequent capitalization of NT$2,495,450,000.
In order to expand to the European market, the Company established Chicony Electronics CEZ s.r.o.
2003 – Mr. Yi Jen Li resigned as the Vice Chairman, and Mr. Mao Kuei Lin was elected as the Vice Chairman and General Manager by the Board of Directors.
– Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$492,320,000 with subsequent capitalization of NT$2,987,770,000.
2004 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$747,230,000 with subsequent capitalization of NT$3,735,000,000.
– Unikey Electronics Co., Ltd, which indirectly invested in the production and sales of optical instruments through Newmax Technology Co., LTD, has an original shareholding of 28.31%.
2005 – Monthly production of keyboards of notebook computers exceeded 1 million units.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$415,000,000 with

-9-

subsequent capitalization of NT$4,150,000,000.
2006 – Built-in camera modules and computer cameras performance jumped to the top in the world.
– Monthly production of computer cameras exceeded 1 million units. – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$275,500,000 with subsequent capitalization of NT$4,425,500,000.
2007 – Monthly production of notebook computers exceeded 3 million units. – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$583,500,000 with subsequent capitalization of NT$5,009,000,000.
Indirect investment in Chicony Electronics (UK) Ltd went out of business.
2008 – Ranked 73th among the Top 100 in Global Technology selected by Business Week Magazine.
– Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$561,000,000 with subsequent capitalization of NT$5,570,000,000.
2009 – The Company stock was selected into the MSCI Taiwan Index. – In order to restructure of the organization, according to the Business Mergers and Acquisitions Act, HIPRO ELECTRONICS (TAIWAN) CO., LTD. that invests 100% in the Company transferred related business (including assets and liabilities) of the power supply business to Chicony Power Technology Co., Ltd. and simultaneously increased capital by NT$2,081 billion so that the Company's direct and indirect shareholding reached 70.39%.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$342,778,320 with subsequent capitalization of NT$5,912,778,320.
2010 – After approval of the change of registration by the Department of Commerce of the Ministry of Economic Affairs, the remaining treasury shares of stock swap of the 1st issue of domestic unsecured corporate bonds have been completed write-off and the reduction of capital of NT$10,008,820 with subsequent capitalization of NT$5,912,669,500.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$343,474,480 with subsequent capitalization of NT$6,256,143,980.
Chicony Power Technology Co., Ltd. of the reinvestment company, which was recognized by the equity method, established the LED Business Unit.
Newmax Technology Co., LTD. of the indirect reinvestment company, which was recognized by the equity method, listed stock at the over-the-counter market.
2011 – Indirect investment in Chicony Electronics (Chongqing) Co., Ltd. through Chicony Overseas, Inc. to operate keyboard and digital imaging products production and sales.
Indirect investment in Chicony Electronics (Chongqing) Co., Ltd. through

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Chicony Power Technology Co., Ltd. to operate power supply and LED lamps production and sales.

After approval of the change of registration by the Department of Commerce of the Ministry of Economic Affairs, the treasury shares completed write-off by the 8th buyback of 10,000 thousand and the reduction of capital of NT$100,000,000 with subsequent capitalization of NT$6,156,143,980.
Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$288,291,920 with subsequent capitalization of NT$6,444,435,900.
2012 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$313,346,190 with subsequent capitalization of NT$6,757,782,090.
2013 – Chicony Power Technology Co., Ltd. of the reinvestment company, which was recognized by the equity method, listed stocks on the emerging stock market on January 3rd and was listed on November 8th. Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$109,434,050 with subsequent capitalization of NT$6,867,216,140.
2014 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$81,437,990 with subsequent capitalization of NT$6,948,654,130.
- The Company was listed as component stocks on the “TWSE RAFIR Taiwan High Compensation 100 Index” by the Taiwan Stock Exchange.
- The Company established the research and development center of National Taipei University of Technology with National Taipei University of Technology.
2015 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$89,447,010 with subsequent capitalization of NT$7,038,101,140.
- The Company was listed in the top 20% of the first corporate governance evaluation score by the Taiwan Stock Exchange.
- The Company was listed as component stocks on the “TWSE Corporate Governance 100 Index” by the Taiwan Stock Exchange.
- The industrial category of the Company was adjusted from “computer and peripheral equipment industry” to “electronic components industry” by the Taiwan Stock Exchange on July 1st.
2016 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$82,719,020 with subsequent capitalization of NT$7,120,820,160.
- The Company was listed in the top 20% of the second corporate governance evaluation score by the Taiwan Stock Exchange.

The headquarters building of Chicony Group was awarded the Diamond Green Building Mark by the Ministry of the Interior.

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The Company was relocated to the headquarters building of Chicony Group, Sanchung District, New Taipei City.

2017 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$85,230,960 with subsequent capitalization of NT$7,206,051,120.
“Chicony Smart and Green Building” won the Platinum Award of Taiwan's Intelligent Green Building and the Diamond Award of Environmental Impact Assessment issued by the New Taipei City Government.
2018 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of retained earnings (including employee bonuses) amounting to NT$97,747,620 with subsequent capitalization of NT$7,303,798,740.
2019 – Approved by the Securities and Futures Management Committee of the Ministry of Finance, the Company handled capitalization of employee bonuses amounting to NT$41,176,470 with subsequent capitalization of NT$7,344,975,210.

The construction of Chicony Thailand plant started.

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==> picture [333 x 694] intentionally omitted <==

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(2) Job Functions of Major Departments

Functions of Major Departments
Department Input Device Department Portable Keyboard Business Unit Video Image Business Unit Image Module Business Unit Automotive Electronics Business Unit Unified Purchasing Center Quality Control Center Financial and Administrative Department	PrimaryFunctions
	The Department handles materials procurement, production management, marketing, business management, post-sales service, etc. of input device products and wearable products of the head office and subsidiaries. The Department handles materials procurement, production management, marketing, business management, research and development, post-sales service, etc. of portable keyboard products of the head office and subsidiaries. The Department handles production management, marketing, business management, and post-sales services of video image products of the head office and subsidiaries. The Department handles production management, marketing, business management, and post-sales services of digital image module products of the head office and subsidiaries. The Department handles production management, marketing, business management, and post-sales services of automotive electronics products of the head office and subsidiaries. The Department handles materials procurement of information peripheral products and digital image products of the head office and subsidiaries. The Department handles post-sales services of quality control of the head office and subsidiaries. The Department handles financial, accounting, stock affairs, customs affairs, and import and export business of the head office, manages the financial and accounting business of the subsidiaries.

Functions of Major Departments

Department
Input Device Department
Portable Keyboard Business
Unit
Video Image Business Unit
Image Module Business Unit
Automotive Electronics
Business Unit
Unified Purchasing Center
Quality Control Center
Financial and Administrative
Department

PrimaryFunctions

The
Department
handles
materials
procurement,
production
management,
marketing,
business
management, post-sales service, etc. of input device
products and wearable products of the head office and
subsidiaries.
The
Department
handles
materials
procurement,
production
management,
marketing,
business
management, research and development, post-sales
service, etc. of portable keyboard products of the head
office and subsidiaries.
The
Department
handles
production
management,
marketing, business management, and post-sales services
of video image products of the head office and
subsidiaries.
The
Department
handles
production
management,
marketing, business management, and post-sales services
of digital image module products of the head office and
subsidiaries.
The
Department
handles
production
management,
marketing, business management, and post-sales services
of automotive electronics products of the head office and
subsidiaries.
The Department handles materials procurement of
information peripheral products and digital image
products of the head office and subsidiaries.
The Department handles post-sales services of quality
control of the head office and subsidiaries.
The Department handles financial, accounting, stock
affairs, customs affairs, and import and export business of
the head office, manages the financial and accounting
business of the subsidiaries.

Administration Department The Department handles human resources, general affairs, and corporate social responsibility business of the head office and assists the subsidiary's human resources, industrial safety, and health business.

Auditing Office Audits and evaluates the internal control system and audits the implementation of various rules and regulations

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of the head office and subsidiaries.

Investors Relations

New Product Development Center

Develop Company operation strategies and manage investors and media relationships.

The Center handles the development and research of new products and imports technological transfer to various business units of the head office and subsidiaries.

Intellectual Property Rights The Center handles patent application, patent Center infringement, patent retrieval, and designing around and assists in handling patent litigation of the head office and subsidiaries.
Computer Center The Center handles information business of the head office and assists in the planning of subsidiary information services.
Legal Affairs Division The Division handles contract review, drafting, litigation and dispute cases, and other legal matters of the head office and affiliated enterprises.
Automation Engineering Center The Center integrates and utilizes the Group's automation technology resources, and develops automation projects for each department, implements mass production by technology transfer to various business units, promotes business units to develop production automation, and has developed and accumulated automated production technology for a long time.

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Other Executives, Directors, or Supervisors who are a Spouse or Kindred Within the 2nd Tier Under the Civil Code.	Relation	-
	Name	-
	Occupational Title	-
Holding Other Positions of the Company and Other Companies		Chairman of Clevo Co., Ching Yuan, Hua Tai, Dong Ling, Hongwell Co., Ltd, Shanghai Hongwell, Changchun Hongwell, Taipei Twin Towers Co., Ltd Chairman (Legal Representative) of Hipro Electronics CO., Kuang Sheng Investment CO., Chun Ching Power Technology Co., Ltd. Hongwell Siyuan Co., Ltd, Hongwell New Taipei Co., Ltd, Hongwell Ruiguang Co., Ltd. Chairman of subsidiaries: Chicony Tungwan, Suchou, Chongqing, Xavi Su Cho. Director of subsidiaries: Chicony Overseas Inc., Chicony Overseas Hong Kong Ltd, Chicony Global Inc., America, Czech Republic, Thailand, Mao Feng, Jui Yang, Guang Mau, Chicony America Group Inc., HIPRO Overseas, XAVi Technologies Corporation, XAVi Overseas, Directmax, Systemax Director and General Manager of Mao Ray Director of Legal Representative of Unikey Electronics Co., Ltd.
Major Experience (education)		Provincial Taipei Institute of Technology Honorary Doctorate of National Taipei University of Technology Chairman of Clevo Co.
The Person and the Spouses of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	-
	Quantity of Shares	-
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-
	Quantity of Shares	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	0.54%
	Quantity of Shares	4,021,401
Quantity of Shareholding at Present	Proportion of Shareholding (note)	8.33%
	Quantity of Shares	61,615,782
Quantity of Shareholding at the Time of Election to Office	Proportion of Shareholding (note)	11.11%
	Quantity of Shares	81,615,782
Date of Election to Office for the First Time		3.4.1985
Tenure		3 years
Date of Election to Office		June 5, 2019
Gender		Male
Name		Hsu, Kun-Tai
Nationality or Place of Registration		Republic of China
Occupational Title		Chairman

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Other Executives, Directors, or Supervisors who are a Spouse or Kindred Within the 2nd Tier Under the Civil Code.	Relation	-	-
	Name	-	-
	Occupational Title	-	-
Holding Other Positions of the Company and Other Companies		General Manager of the Company Chairman of Legal Representative of Chicony Power Technology Co., Ltd., XAVi Technologies Corporation, Unikey Electronics Co., Ltd. Director of Legal Representative of Hipro Electronics CO., Kuang Sheng Investment CO., Chun Ching Power Technology Co., Ltd. Director of subsidiaries: Chicony Overseas, Chicony Overseas Hong Kong Ltd., Czech Republic, Japan, Su Chou, Thailand, HIPRO Overseas, Jui Yang, Mao Feng, Kuang Hsin, Mau Chiun, Guang Mau, Chicony America Group Inc., Chicony Power Technology Hong Kong, Su Chou, Chung Ching, Do ngguan, Thailand, Chicony Power America Holding, International, Tungwan Trading Company, Chicony Energy Shanghai, Guang Sheng Electronics Nan Chang, XAVI Overseas, XAVI Su Chou, Directmax, and Systemax. Director and Secretary of Chicony America Director and General Manager of Chicony Tungwan Director and Supervisor of Mao Ray Supervisor of Chicony Chongqing Director of Legal Representative of Shun On Electronics CO., LTD. and Newmax Technology Co., LTD.	Vice Chairman and General Manager of Clevo Co.	Director of Chicony Power Technology Co., Ltd. Supervisor of XAVI Technologies Corporation
Major Experience (education)		Department of Business Administration and MBA Program, National Chengchi University Chicony Electronic Co., Ltd. Business Supervisor, Manager, Director, Assistant General Manager, Vice General Manager	Provincial Taipei Institute of Technology MBA program, National Chengchi University General Manager of Clevo Co.	Provincial Taipei Institute of Business
The Person and the Spouses of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	0.01%	-
	Quantity of Shares	63,900	-
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-	-
	Quantity of Shares	-	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	0.22%	0.01%
	Quantity of Shares	1,592,628	59,175
Quantity of Shareholding at Present	Proportion of Shareholding (note)	0.43%	-	0.11%
	Quantity of Shares	3,191,042	29,355	828,037
Quantity of Shareholding at the Time of Election to Office	Proportion of Shareholding (note)	0.33%	-	0.11%
	Quantity of Shares	2,432,971	29,355	828,037
Date of Election to Office for	the First Time	5.18.2004	5.30.2001	6.05. 2019
Tenure		3 years	3 years	3 years
Date of Election to Office		June 5, 2019	June 5, 2019	June 5, 2019
Gender		Male	Male	Female
Name		Lu, Chin- Chung	Tsai, Ming- Hsien	Li, Cih- Jing
Nationality or Place of Registration		Republic of China	Republic of China	Republic of China
Occupational Title		Director	Director	Director

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Other Executives, Directors, or Supervisors who are a Spouse or Kindred Within the 2nd Tier Under the Civil Code.	Relation	-	-	Couples	-	-	-
								Main Shareholders (Name and shareholding of the Top 10 shareholders of the corporate)	Hsu, Kun-Tai(82%); Kang, Min-Chen (10.2%); Hongwell Co., Ltd (2.72%); Hsu, Yueh-Sen (2.68%); Lin, Feng-Chu (1.8%); Hsu, Wen-Hsin (0.6%)
	Name	-	-	Wei, Chuan- Pin	-	-	-
	Occupational Title	-	-	Director	-	-	-
Holding Other Positions of the Company and Other Companies		Nil	-	Nil	Independent Director and Remuneration Committee Member of FamilyMart Co., LTD., Charoen Pokphand Enterprise Co., LTD., Co., LTD., Sincere Navigation Co., LTD.	Independent Director member and Remuneration Committee Member of GMI Technology Inc. and CSUN Co., LTD. Corporate Supervisor of Unitech Co., LTD.	Chairman of WK Technology IX Director of WK Innovation Ltd. General Manager of WK Technology Fund Independent Director of QT Hong Kong
Major Experience (education)		Provincial Taipei Institute of Technology Director of Kuo Fong Motors	-	Provincial Taipei Institute of Technology Director of Kuo Fong Mo tors	Master’s degree, Department of Accounting, Soochow University Director, Accounting Research and Development Foundation	Doctorate in Business Administration, National Chengchi University Department Chairman of Business Administration, National Central University	Graduated from the department of Electrical Engineering of National Tsing Hua University Chairman of WK Technology Fund IX
The Person and the Spouses of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	-	-	-	-	-	-
	Quantity of Shares	-	-	-	-	-	-
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-	-	-	-	-	-
	Quantity of Shares	-	-	-	-	-	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	-	-	-	-	-	-
	Quantity of Shares	-	-	-	-	-	-
Quantity of Shareholding at Present	Proportion of Shareholding (note)	0.08%	1.51%	0.08%	-	-	-
	Quantity of Shares	590,261	11,171,329	590,261	-	21,433	-
Quantity of Shareholding at the Time of Election to Office	Proportion of Shareholding (note)	0.08%	1.51%	0.08%	-	-	-
	Quantity of Shares	581,496	11,171,329	590,261	-	21,433	-
Date of Election to Office for	the First Time	5.30.2001	5.18.2004	5.30.2001	6.08.2016	6.08.2016	6.05.2019
Tenure		3 years	3 years	3 years	3 years	3 years	3 years
								Name of Corporate Shareholder	Dong Ling Investment Co., Ltd.
Date of Election to Office		June 5, 2019	June 5, 2019	June 5, 2019	June 5, 2019	June 5, 2019	June 5, 2019
Gender		Male	Legal Person	Male	Male	Male	Male
Name		Liu, Chia- Sheng	Dong Ling Investme nt Co., Ltd.	Liu, Chia- Sheng	Lee, Yen- Sung	Lin, Ming-Ji	Chu, Jia- Siang
Nationality or Place of Registration		Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China
Occupational Title		Director	Director		Independent Director	Independent Director	Supervisor

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1. Information on the Professionalism and Independence of Directors (2):		Number of public companies that the Independent Director also holds the position as independent director in.	0	0	0	0	0	3	2	0	Note: If the Directors and Supervisors met the following conditions in the period of 2 years prior to the assumption of office and within the term of office, put a “” in the appropriate box representing the specific condition. (1) Not an employee of the Company or an affiliate.
	Conform to the status of independence`（`note`）`.	12								
		11								
		10								
		9								
		8								
		7								
		6								
		5								
		4								
		3								
		2								
		1								
	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Work experience in commerce, law, finance, accounting, or a specialization required by the business operation of the Company.								
		A professional or technician who has passed the national examination for professionals like court judge, prosecutor, lawyer, certified public accountant, or any other expertise required for the business operation of the Company with the issuance of a certificate of completion.						
		In the capacity of a tutor or above in a public or private school of higher education in the disciplines of commerce, law, finance, accounting, or any other areas of specialization required for the business operation of the Company.							
		Condition Name	Chairman: Hsu, Kun- Tai	Director and General Manager: Lu, Chin- Tsung	Director: Tsai, Min- Hsien	Director: Dong Ling Investment Co., Ltd. Legal Representative: Liu, Jia-Sheng	Director: Li, Cih-Jing	Independent Director: Li, Yan-Song	Independent Director: Lin, Ming-Chieh	Independent Director: Chu, Jia-Siang

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Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager	Relation	-	-	-
	Name	-	-	-
	Occupational Title	-	-	-
Positions in Other Companies at Present		General Manager of the Company Chairman of Legal Representative of Chicony Power Technology Co., Ltd., XAVi Technologies Corporation, Unikey Electronics Co., Ltd. Director of Legal Representative of Hipro Electronics CO., Kuang Sheng Investment CO., Chun Ching Power Technology Co., Ltd. Director of subsidiaries: Chicony Overseas, Chicony Overseas Hong Kong Ltd., Czech Republic, Japan, Su Chou, Thailand, HIPRO Overseas, Jui Yang, Mao Feng, Kuang Hsin, Mau Chiun, Guang Mau, Chicony America Group Inc., Chicony Power Technology Hong Kong, Su Chou, Chung Ching, Dongguan, Thailand, Chicony Power America Holding, International, Tungwan Trading Company, Chicony Energy Shanghai, Guang Sheng Electronics Nan Chang, XAVI Overseas, XAVI Su Chou, Directmax, and Systemax. Director and Secretary of Chicony America Director and General Manager of Chicony Tungwan Director and Supervisor of Mao Ray Supervisor of Chicony Chongqing Director of Legal Representative of Shun On Electronics CO., LTD. and Newmax Technology Co., LTD.	Director and CFO of Chicony America Director and Secretary of Chicony America Director of Chicony Power America Co., Ltd.	Nil
Major Experience (education)		Department of Business Administration and MBA Program, National Chengchi University Business Supervisor, Manager, Director, Assistant General Manager, Vice General Manager of Chicony Electronic Corporate	Graduated from the Department of Law, National Chung Hsing University Chicony Electronic Corporate Business Director, Assistant General Manager, Vice General Manager	Graduated from the Department of Applied Mathematics, National Chiao Tung University Head of the Planning Department and Head of the Marketing Planning Department of LiteOn Co., Ltd. Business Manager, Purchasing Director of Chicony Co., Ltd. and General Manager of Chicony Thailand Co., Ltd. and Chicony Germany Co., Ltd.
The Person and the Spouse’ of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	0.01%	-	-
	Quantity of Shares	63,900	7,500	6,000
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-	-	-
	Quantity of Shares	-	-	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	0.22%	-	-
	Quantity of Shares	1,592,628	-	6,432
Shareholding number	Proportion of Shareholding (note)	0.43%	0.06%	0.22%
	Quantity of Shares	3,191,042	465,810	1,634,808
Inauguration Date		12.1.2016	10.17.1993	6.1.2011
Gender		Male	Male	Male
Name		Lu, Chin- Chung	Chang , Yao-Ching	Chen, Shao-Lung
Nationali ty		Republic of China	Republic of China	Republic of China
Occupational Title		General Manager	Chicony America Company General Manager	Special Assistant

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Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager	Relation	-	-	-	-	-	-	-	-
	Name	-	-	-	-	-	-	-	-
	Occupational Title	-	-	-	-	-	-	-	-
Positions in Other Companies at Present		Chairman of Suchou Chunyang, Suchou Maochun, Mao Jui Director of the Subsidiaries: XAVI Technologies Corporation, Chicony Japan, Chicony Chongqing, Chiocny Dongguan, Jui Yang Supervisor of Chicony Suchou	Nil	Nil	Director of XAVI Technologies Corporation	Director of Chicony Suchou Supervisor of Suchou Chunyang Director and General Manager of Chicony Chongqing	Nil	Supervisor of XAVI Technologies Corporation	Nil
Major Experience (education)		Graduated from the Department of Electrical Engineering, Fu Jen Catholic University Vice General Manager of the IPD Development Division of Chicony Electronic Co., Ltd., General Manager of Chicony Dongguan Company, Acting General Manager of the Business unit	Graduated from the Department of Electronics, Hsin-pu Industrial and Technological Junior College Company Special Assistant of XAVi Technologies Corporation Senior Assistant General Manager of Hon Hai Precision Industry Co., Ltd.	Graduated from the MBA Program, National Cheng Kung University General Manager of the Business Unit of Chicony Power Technology Co., Ltd.	National Taipei University of Business MBA Master’s, California State University Business Manager of Super Company Business Manager, Director, Vice General Manager of the CM Business Division of Chicony Electronic Co., Ltd.	MBA Master of Business Management, Da-Yeh University Assistant General Manager of the MKB Development Division of Chicony Electronics Co., Ltd.	Department of Bio-Industrial Mechatronics Engineering, National Taiwan University Department of Mechanical and Electro- Mechanical Engineering, Tamkang University Vice General Manager of the MKB Business Unit of Chicony Electronic Co., Ltd.	Graduated from the EMBA Program, Department of International Business, National Taiwan University Executive Vice General Manager of Ho Hsun Digital Co., Ltd. and Assistant General Manager of the VIP Development Division of Chicony Electronics Co., Ltd.	Graduated from the Department of Electrical Engineering, Ming Chi Industrial and Technological Junior College Vice General Manager of Compal Electronics, Inc. and Assistant General Manager of Taiwan Lu Pa Co., Ltd.
The Person and the Spouse’ of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	0.14%	0.01%	-	-	-	0.01%	0.01%	0.01%
	Quantity of Shares	1,035,100	40,256	29,400	21,900	15,600	50,350	47,100	18,600
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-	-	-	-	-	-	-	-
	Quantity of Shares	-	-	-	-	-	-	-	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	0.02%	-	--	-	-	-	-	-
	Quantity of Shares	178,288	-	-	-	-	-	-	-
Shareholding number	Proportion of Shareholding (note)	0.15%	0.03%	0.03%	0.04%	0.03%	0.02%	0.05%	0.01%
	Quantity of Shares	1,073,670	203,016	224,765	304,491	236,196	146,607	369,045	88,297
Inauguration Date		10.26.2011	8.1.2013	3.1.2018	12.1.2016	12.1.2016	2.1.2019	4.1.2010	8.1.2013
Gender		Male	Male	Male	Male	Male	Male	Female	Male
Name		Huang, Chien-Yu	Dung , Yan-Liang	Cheng, Wei-Hao	Chou, Yung- Chang	Tsai, Chin- Cheng	Hsu, Chieh- Hsiang	Tsai, Mei-I	Chang, Chao-Hsien
Nationali ty		Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China
Occupational Title		General Manager of the IPD Business Unit	General Manager of the CM Business Unit	General Manager of the AE Business Unit	General Manager of the Business Unit of Subsidiary Companies	Acting General Manager of the MKB Business Unit	Acting General Manager of the MKB Business Unit	Acting General Manager of VIPs	Chief Purchasing Officer

-23-

Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager	Relation	-	-	-	-	-	-	-
	Name	-	-	-	-	-	-	-
	Occupational Title	-	-	-	-	-	-	-
Positions in Other Companies at Present		Nil	Nil	Director of Chicony Czech Republic, Chicony Thailand Supervisor of Subsidiaries: Chicony Japan, XAVI Technologies Corporation Director of the Legal Representative of WK Technology Fund Co., Ltd, Mai Shish Erh Hao Fund Co., Ltd., Laster Tech Co., Ltd., Alcor Micro Co., Ltd., Cheng Ting Fund Co., Ltd., Pei Ke Chih Hsing Fund Co., Ltd., Sheng-Da Venture Capital Legal Representative Supervisor of Top Taiwan Venture Capital Co., Ltd.	Nil	Nil	Nil	Nil
Major Experience (education)		Graduated from the Department of Shipping and Transportation Management, National Taiwan Ocean University Assistant General Manager of the Business Division of Chicony Electronics Co., Ltd.	Graduated from the Department of Business Mathematics, Soochow University Manager and Director of the IPD Development Division of Chicony Electronics Co., Ltd.	Graduated from the Department of Finance, National Taiwan University Master of Accounting, George Washington University CPA of Chiun Ye Accountancy Firm Accounting Manager and Director of Chicony Electronic Co., Ltd.	Graduated from the Institute of Mechanical Engineering, National Taiwan University Manager of Hao Shih Technology Co., Ltd. Assistant General Manager of ASKEY Computer CO., Ltd.	Graduated from the Department of Engineering Economics Management, University of Oxford, UK Director of the Business Division of Chicony Electronic Co., Ltd.	Graduated from the Department of Business Administration, Feng Chia University Director of the Overseas Business Management Division of Chicony Electronic Co., Ltd.	Graduated from the Department of Machinery, National Chiayi Institute of Agriculture Director of the Development Division of Chicony Electronics Co., Ltd.
The Person and the Spouse’ of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	-	0.01%	0.01%	0.01%	-	-	0.01%
	Quantity of Shares	30,000	53,466	28,800	37,053	31,800	19,200	37,156
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-	-	-	-	-	-	-
	Quantity of Shares	-	-	-	-	-	-	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	-	-	-	-	-	-	0.03%
	Quantity of Shares	-	-	-	-	-	-	200,050
Shareholding number	Proportion of Shareholding (note)	0.08%	0.15%	0.05%	0.03%	0.04%	-	0.03%
	Quantity of Shares	573,405	1,114,563	388,994	207,219	284,020	27,196	225,688
Inauguration Date		7.1.2011	11.1.2006	12.1.2016	4.1.2010	08.06.2013	02.01.2006	08.06.2013
Gender		Male	Male	Female	Male	Male	Male	Male
Name		Li, Pei-Jan	Huang, Kuang-Yu	Lin, Yu-Ling	Tseng, Chin- Cheng	Tu, Ku-Chin	Chuang, Ting-Shan	Chen, Tsung- Ming
Nationali ty		Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China
Occupational Title		General Manager of the CM Business Division	General Manager of the New Product Development Center	General Manager of the Financial and Administrativ e Department	Vice General Manager of the Automation Engineering Center	General Manager of the IPD Business Division	Assistant General Manager of the Overseas Business Management Division	Assistant General Manager of the MKB Development Department

-24-

Spouse or Kindred Within the 2nd Tier Under the Civil Code who is a Manager	Relation	-	-	-	-	-	-
	Name	-	-	-	-	-	-
	Occupational Title	-	-	-	-	-	-
Positions in Other Companies at Present		Nil	Nil	Nil	Nil	Nil	Nil
Major Experience (education)		Graduated from the Department of Electronics and Information, Tamsui Industrial and Technological Junior College Vice General Manager of Sysgration Co., Ltd.	Graduated from Pittsburgh University Vice General Manager of Inventec Co., Ltd.	Graduated from Newport International University Assistant General Manager of the Human Resources Division of Chicony Electronics Co., Ltd	Graduated from the University of Pennsylvania Training Manager of Hung Chang Information Company	Masters of Industrial Engineering and Management, National Chiao Tung University Director of the Unified Purchasing Division of Chicony Electronic Co., Ltd.	Master of University of Glasgow Senior Assistant Manager of Inventec Corporation
The Person and the Spouse’ of Retained Discretion Over Use of Trust Shares	Proportion of Shareholding (note)	-	-	-	0.01%	-	-
	Quantity of Shares	29,400	7,200	11,100	69,408	28,402	-
Shares Held in the Name of a Third Party	Proportion of Shareholding (note)	-	-	-	-	-	-
	Quantity of Shares	-	-	-	-	-	-
Shareholding at present by spouse and/or children who are minors	Proportion of Shareholding (note)	-	-	-	-	-	-
	Quantity of Shares	10,417	-	30	-	-	-
Shareholding number	Proportion of Shareholding (note)	0.02%	0.02%	0.03%	0.02%	0.01%	-
	Quantity of Shares	178,535	163,539	215,225	152,243	104,232	7,293
Inauguration Date		07.04.2014	12.01.2014	12.01.2016	09.01.2017	10.17. 2018	04.01.2020
Gender		Male	Male	Male	Female	Female	Male
Name		Yang, Ching-Wu	Chang, Yu-Yun	Hsiao, Huan-Wen	Chen, Chiu-Mei	Juan, Yun-Chu	Chao, Yuan-Hung
Nationali ty		Republic of China	Republic of China	Republic of China	Republic of China	Republic of China	Republic of China
Occupational Title		Assistant General Manager of MKB PM	Chief Information Officer	Chief Human Resources Officer	Special Assistant	Assistant General Manager of the Subsidiary Company	Deputy Director of the Audit Division

-25-


	Any remunerati on from other direct	investments other than the subsidiaries		-						-			1.Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration`：` For the remuneration of the independent directors of the Company, the Remuneration Committee shall follow Article 18 of the Articles of Association, with reference to the extent of each director's participation in the operation of the Company and the value of contribution, and draft in the directors’ remuneration proposal the amount and the principle of payment, for submitting it to the board of directors for resolution. 2. Further to the disclosure in the above Table, the remuneration received by the Director who performed service to all companies included in the financial statements in the most recent year (such as a consultant): Nil.
	Percent of A, B, C, D, E, F, and G to Net Profit After Tax	All Companies Included in the Financial Statements		2.50						0.11
		The Company		1.77						0.11
Relevant Remuneration of Part-time Personnel	Remuneration to Employees Note 1 (G)	All Companies Included in the Financial Statements	Amount in Stock	52,122						-
			Amount in Cash	741						-
		The Company	Amount in Stock	52,122						-
			Amount in Cash	741						-
	Severance Payment and Pension (F)	All Companies Included in the	Financial Statements	56						-
		The Company		56						-
	Salaries, Bonuses, and Special Accounts Note 2 (E)	All Companies Included in the Financial Statements		39,361						-
		The Company		2,778						-
	Percent of A, B, C, and D to Net Profit After Tax	All Companies Included in the Financial Statements		0.92						0.11
		The Company		0.81						0.11
Remuneration of Directors	Business Subsidy (D)	All Companies Included in the Financial Statements		-						-
		The Company		-						-
	Remuneration to Directors Note 1 (C)	All Companies Included in the Financial Statements		47,998						6,520
		The Company		41,531						6,520
	Severance Payment and Pension (B)	All Companies Included in the Financial Statements		-						-
		The Company		-						-
	Remuneration (A)	All Companies Included in the Financial Statements		5,804						-
		The Company		5,804						-
	Name			Hsu, Kun- Tai	Lu, Chin- Chung	Tsai, Ming- Hsien	Li, Cih-Jing	Dong Ling Investment Co., Ltd. Legal Representat ive: Liu, Chia-Sheng	Wei, Chuan-Pin	Lee, Yen- Sung	Lin, Ming- Ji	Chu, Jia- Siang
	Occupationa l Title			Chairman	Director	Director	Director	Director	Director	Independent Director	Independent Director	Independent Director

-26-

					NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin	NT$2,000,000 - NT$3,500,000 (exclusive) Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji Lee, Yen-Sung/Lin, Ming-Ji NT$3,500,000 - NT$5,000,000 (exclusive) Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng NT$5,000,000 - NT$10,000,000 (exclusive) Lu, Chun-Chung/Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing Li, Cih-Jing NT$10,000,000 - NT$15,000,000 (exclusive) - - Lu, Chun-Chung - NT$15,000,000- NT$30,000,000 (exclusive) Hsu, Kun-Tai Hsu, Kun-Tai/Lu, Chin Chung Hsu, Kun-Tai Hsu, Kun-Tai NT$30,000,000- NT$50,000,000 (exclusive) - - - - NT$50,000,000 - NT$100,000,000 (exclusive) - - - Lu, Chun-Chung More than NT$ 100,000,000 - - - - Total 9 9 9 9 Note 1: Remuneration to employees used the proposed distribution for this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note 2: Newly Elected on June 5, 2019: Hsu, Kun-Tai; Lu, Chin-Chung; Tsai, Ming-Hsien; Li, Cih-Jing; Dong Ling Investment Co., Ltd Legal Representative: Liu, Chia-Sheng; Lee, Yen-Sung; Lin, Ming-Ji; Chu, Jia-Siang Note 3: Resigned on June 5, 2019: Wei, Chuan-Pin
Names of Directors and Independent Directors	The total amount of remuneration of the sum of these 7 items (A+B+C+D+E+F+G).	All Companies Included in the Financial Statements	-	Chu, Jia-Siang/Wei, Chuan- Pin	Lee, Yen-Sung/Lin, Ming-Ji	Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng	Li, Cih-Jing	-	Hsu, Kun-Tai	-	Lu, Chun-Chung	-	9
		The Company	-	Chu, Jia-Siang/Wei, Chuan- Pin	Lee, Yen-Sung/Lin, Ming-Ji	Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng	Li, Cih-Jing	Lu, Chun-Chung	Hsu, Kun-Tai	-	-	-	9
	Total amount of remuneration of the sum of these 4 items (A+B+C+D).	All Companies Included in the Financial Statements	-	Chu, Jia-Siang/Wei, Chuan- Pin	Lee, Yen-Sung/Lin, Ming-Ji	Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng	Li, Cih-Jing	-	Hsu, Kun-Tai/Lu, Chin Chung	-	-	-	9
		The Company	-	Chu, Jia-Siang/Wei, Chuan- Pin	Lee, Yen-Sung/Lin, Ming-Ji	Tsai, Ming-Hsien/ Dong Ling Investment Co., Ltd Legal Representative:Liu, Chia-Sheng	Lu, Chun-Chung/Li, Cih-Jing	-	Hsu, Kun-Tai	-	-	-	9
	Bracket of Payment to Each Director of the Company		Less than NT$1,000,000	NT$1,000,000 - NT$2,000,000 (exclusive)	NT$2,000,000 - NT$3,500,000 (exclusive)	NT$3,500,000 - NT$5,000,000 (exclusive)	NT$5,000,000 - NT$10,000,000 (exclusive)	NT$10,000,000 - NT$15,000,000 (exclusive)	NT$15,000,000- NT$30,000,000 (exclusive)	NT$30,000,000- NT$50,000,000 (exclusive)	NT$50,000,000 - NT$100,000,000 (exclusive)	More than NT$ 100,000,000	Total

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Remuneration from Investments Other Than Subsidiaries or the Parent Company	Remuneration from Investments Other Than Subsidiaries or the Parent Company	Remuneration from Investments Other Than Subsidiaries or the Parent Company	-	-	-
The sum of A, B, and C in proportion to net income%.		All Companies Included in the Financial Statements	0.07
		The Company	0.07
Remuneration to Supervisors	Business Subsidy (C)	All Companies Included in the Financial Statements	-
		The Company	-
	Remuneration (Note) (B)	All Companies Included in the Financial Statements	4,019
		The Company	4,019
	Remuneration (A)	All Companies Included in the Financial Statements	-
		The Company	-
		Name	Huang, Chin- Hsuan	Huang, Chen-Chih	Dong Ling Investment Co., Ltd. Representative of the Legal Entity: Chang, Su-Tien
		Occupation al Title	Supervisor	Supervisor	Supervisor

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Name of Supervisor	Total amount of remuneration of the sum of these 3 items (A+B+C)	All Companies Included in the Financial Statements	Huang, Chin-Hsuan/ Huang, Chen Chih/ Legal Representative of Dong Ling Investment Co., Ltd.: Chang, Su Tien	-	-	-	-	-	-	-	-	-	3
		The Company	Huang, Chin-Hsuan/ Huang, Chen Chih/ Legal Representative of Dong Ling Investment Co., Ltd.: Chang, Su Tien	-	-	-	-	-	-	-	-	-	3
Bracket of Payment to Each Supervisor of the Company			Less than NT$1,000,000	NT$1,000,000 - NT$2,000,000 (exclusive)	NT$2,000,000 - NT$3,500,000 (exclusive)	NT$3,500,000 - NT$5,000,000 (exclusive)	NT$5,000,000 - NT$10,000,000 (exclusive)	NT$10,000,000 - NT$15,000,000 (exclusive)	NT$15,000,000- NT$30,000,000 (exclusive)	NT$30,000,000- NT$50,000,000 (exclusive)	NT$50,000,000 - NT$100,000,000 (exclusive)	More than NT$ 100,000,000	Total

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Any remuneration	from other direct	investments other than the subsidiaries.	-
The sum of A, B, C, and D in proportion to net income (%).	All Companies	Included in the Financial Statements	4.73
		The Company	2.93
Amount of Remuneration to Employees (Note 1) (D)	All Companies Included in the Financial Statements	Amount in Stock	137,731
		Amount in Cash	8,770
	The Company	Amount in Stock	122,091
		Amount in Cash	8,029
Bonus and Special Account (Note 3) (C)	All Companies	Included in the Financial Statements	79,977
		The Company	7,398
Severance Payment and Pension (B)	All Companies	Included in the Financial Statements	2,143
		The Company	1,684
Salary (Note 2) (A)	All Companies	Included in the Financial Statements	47,766
		The Company	31,660
	Name		Lu, Chin-Chung	Chang, Yao-Ching	Chen, Shao-Lung	Huang, Chien-Yu	Dung, Yan-Liang	Cheng, Wei-Hao	Chou, Yung- Chang	Tsai, Chin-Cheng	Hsu. Chieh- Hsiang	Tsai, Mei-I	Chang, Chao- Hsien	Li, Pei-Jan	Tu, Ku-Chin	Huang, Kuang-Yu	Lin, Yu-Ling	Hsiao, Huan-Wen
	Occupational Title		General Manager	Subsidiary General Manager	Special Assistant	General Manager of the IPD Business Unit	General Manager of the CM Business Unit	General Manager of the AE Business Unit	General Manager of the Business Unit of the Subsidiary Company	Acting General Manager of the MKB Business Unit	Acting General Manager of the CM Business Unit	Acting General Manager of the VIP Business Unit	Chief Purchasing Officer	Vice General Manager	Vice General Manager	Vice General Manager	Vice General Manager	Chief Human Resources Officer

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Names of the General Manager and Vice General Managers	All Companies Included in the Financial Statements	-	-	Chen, Shao- Lung/Chen, Wei-Hao/Hsiao, Huan-Wen	Chou,Yung-Chang	Huang, Chien-Yu/ Dung, Yan-Liang/Tsai, Chin-Cheng/Hsu, Chieh- Hsiang/Tsai, Mei-I /Tu, Ku-Chin/Li, Pei-Jan/Huang, Kuang-Yu/Chang, Chao-Hsien/Lin, Yu- Ling	Chang, Yao-Ching	-	Lu, Chin-Chung	-	-	16	Note: Remuneration to employees used the proposed for distribution this year to estimate the amount that has not been paid yet, therefore the Bracket of Remuneration did not include the Remuneration to Employees. Note`：` 1. After-tax loss occurring in individual or respective financial reports in the last three years: None. 2. Where the results of the corporate governance evaluation of a listed and OTC company in the most recent year fall in the last level, or the trading method has been changed, trading has been suspended, listing has been terminated, or other facts where the Corporate Governance Evaluation Committee passed the resolution that the Company shall not be evaluated in the most recent year and up to the date of printing of
	The Company	-	Huang, Chien-Yu/Tsai, Chin- Cheng/Chen, Wei- Hao/Li, Pei-Jan/Lin, Yu-Ling/Hsu, Chieh- Hsiang/Hsiao, Huan-Wen	Lu, Chin Chung/Chen, Shao- Lung/Tsai, Mei-I/ Chou,Yung-Chang/Tu, Ku-Chin	Huang, Kuang-Yu/Dung, Yan-Liang/Chang, Chao- Hsien/Chang, Yao-Ching	-	-	-	-	-	-	16
Bracket of Payment to Each General Manager and Vice General Manager of the Company		Less than NT$1,000,000	NT$1,000,000 - NT$2,000,000 (exclusive)	NT$2,000,000 - NT$3,500,000 (exclusive)	NT$3,500,000 - NT$5,000,000 (exclusive)	NT$5,000,000 - NT$10,000,000 (exclusive)	NT$10,000,000 - NT$15,000,000 (exclusive)	NT$15,000,000- NT$30,000,000 (exclusive)	NT$30,000,000- NT$50,000,000 (exclusive)	NT$50,000,000 - NT$100,000,000 (exclusive)	More than NT$ 100,000,000	Total

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4. Names of Managers and the Distribution of Remuneration to Employees in 2019

Unit: NTD 1,000

Occupational Title	Name	Amount in Stock	Amount in Cash	Total	Total Amount in Proportion the Net Income
General Manager	Lu, Chin-Chung	142,834	11,557	154,391	2.64%
General Manager of Chicony America Corporation	Chang, Yao-Ching
Special Assistant	Chen, Shao-Lung
General Manager of the IPD Business Unit	Huang, Chien-Yu
General Manager of the Business Unit of the SubsidiaryCompany	Chou, Yung-Chang
Acting General Manager of the CM Business Unit	Tung, Yen-Liang
Ge neral Manager of the AE Business Unit	Cheng, Wei-Hao
Acting General Manager of the MKB Business Unit	Tsai, Chin-Cheng
Acting General Manager of the MKB Business Unit	Hsu, Chieh- Hsiang
Acting General Manager of the VIP Business Unit	Tsai, Mei-I
Chief Purchasing Officer	Chang, Chao-Hsien
Vice General Manager of the CM Business Department	Li, Pei-Jan
Vice General Manager of the IPD Business Division	Tu, Ku-Chin
Vice General Manager of the New Product Development Division	Huang, Kuang-Yu
Vice General Manager of the Financial and Administrative Department	Lin, Yu-Ling
Acting Vice General Manager of the Automation EngineeringCenter	Tseng, Chin-Cheng
Assistant General Manager of the Overseas Business Management Division	Chuang, Ting-Shan
Assistant General Manager of the MKB Development Division	Chen, Tsung-Min
Assistant General Manager of the MKB PM	Yang, Ching-Wu
Chief Information Officer	Chang, Yu-Yun
Chief Human Resources Officer	Hsiao, Huan-Wen
Special Assistant	Chen, Chiu-Mei
Assistant General Manager of the SubsidiaryCompany	Juan, Yun-Chu
Chief Auditing Officer	Wang, Tzu-Jun

Note: According to the amendment, employees can allocate amounts to the proposed remuneration of employees.

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(5) The Company and all companies included in the Consolidated Financial Statements to the Directors, Supervisors, General Manager, and Vice General Manager in proportion to the net income of the Separate Financial Statements in the last two years, with analysis of the remuneration policy, standard and combination, procedure for setting the remuneration, the association with operation performance, and risks in the future:
The following table is of remuneration paid to directors, supervisors, general managers, and Vice General managers in proportion to the net income of 2019 and 2018 Financial Statements.

Unit: NT$ 1,000

	Total Amount of Remuneration	Total Amount of Remuneration	Total Amount of Remuneration	Total Amount of Remuneration	Total Amount in Proportion to the Net Income	Total Amount in Proportion to the Net Income	Total Amount in Proportion to the Net Income	Total Amount in Proportion to the Net Income
	2019		2018		2019		2018
	The Company	All Companies Included in the Financial Statements	The Company	All Companies Included in the Financial Statements	The Company	All Companies Included in the Financial Statements	The Company	All Companies Included in the Financial Statements
Remuneration to Directors	53,855	60,322	30,975	35,962	0.92	1.03	0.86	1.00
Remuneration to the Supervisor	4,019	4,019	5,551	5,551	0.07	0.07	0.15	0.15
Remuneration to the General Manager and the Vice General Managers	170,862	276,387	181,740	268,512	2.93	4.73	5.06	7.48

The remuneration policy, standard and combination, and the procedure for setting the remuneration:
(1) The remuneration of directors (including independent directors) of the Company, including compensation and distribution of income remuneration to directors. In the compensation part, it is reported to the Board of Directors after discussion by the Remuneration Committee; in respect of the remuneration of the distribution of income to directors, before the Board of Directors decides to pay the amount, the Remuneration Committee complies with the provisions of Article 18 of the Articles of Incorporation of the Company, within the limit of not more than 1% of the annual profit, and considers the value of the degree and contribution of the directors to the operation of the Company, and discusses the suggestion of remuneration of the Board of Directors and the principle of payment.
(2) The remuneration paid to general managers and Vice General managers are salaries, bonuses, staff compensation, and retirement pension according to regulations. The salary and bonus portion shall be considered by the Remuneration Committee to take into account annual revenue, profit performance, and the status of manager’s performance target. After reviewing the peers performance and salary level, then decisions are made through the Board of Directors; the portion of remuneration to employees is subject to the provisions of the Articles of Incorporation of the Company and takes into account annual revenue, profit performance, and the performance target of the Manager, and the amount is proposed by the Remuneration Committee, and then the Board of Directors should make a corresponding resolution and pay it.
- If the Company is appointed as a Legal Representative Director or supervisor of the direct investment company, and the Company will pay the directors, supervisors, and managers of the directors by salary way that received from the direct investment company.
Association with the operation performance, and risks in the future:
(1) The revenue and profitability of the Company were maintained, so the relative risk is low.
(2) For the performance assessment of directors and managers, in addition to the reference to

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the peers’ level of salary payment, considering the operating results and their contribution to the Company, comprehensive consideration of the remuneration, payment method, and the future risks matters of the Company that were highly correlated with the Company's operational responsibilities and overall performance were considered.

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3. Corporate Governance in action

(1) Status on Implementation of Board of Directors (1)

The Board convened 6 times (A) in 2019. The attendance of the Directors is specified below:

Occupational Title	Name (Legal persons should disclose the name of the shareholder and its representative)	Actual Number of Attendances B	Attendances by Proxy	Actual Attendance Rate [B/A (number of meetings during the period of employment)]	Remarks (Date of Departure, Formerly or Newly Elected to Office, or Reelected to Office, and Date of Election)
Chairman	Hsu,Kun-Tai	`6`	`0`	`100%`	Re-elected on June 5,2019
Director	Lu,Chin-Chung	`6`	`0`	`100%`	Re-elected on June 5,2019
Director	Wei, Chuan-Pin	`2`	`0`	`100%`	Resigned on June 5, 2019, should have attended 2 times
Director	Tsai,Ming-Hsien	`4`	`0`	`67%`	Re-elected on June 5,2019
Director	Liu, Chia-Sheng	`2`	`0`	`100%`	Elected as the legal representative of Dong Ling Investment Co., Ltd. On June 5, 2019, should have attended 2 times.
Director	Dong Ling Investment Co., Ltd. Legal Representative: Liu,Chia-Sheng	`4`	`0`	`100%`	Newly-elected on June 5, 2019, should have attended 4 times
Director	Li, Cih-Jing	`4`	`0`	`100%`	Newly-elected on June 5, 2019, should have attended 4 times
Independent Director	Lee, Yen-Sung	`6`	`0`	`100%`	Re-elected on June 5, 2019
Independent Director	Lin, Ming-Ji	`6`	`0`	`100%`	Re-elected on June 5, 2019
Independent Director	Chu, Jia-Siang	`4`	`0`	`100%`	Newly-elected on June 5, 2019, should have attended 4 times
Additional Information: I. If any of the following occurs to the operation of the Board, specify the date, the session, the content of the motion, the opinions of the Independent Directors, and the response of the Company to the opinions of the Independent Directors: (I) The particulars exhibited in Article 14-3 of the Securities and Exchange Act: 1. Board Meeting’s Date, Session, and Proposal Contents: Please refer to the important resolutions made by the Shareholders’ Meeting and Board of Directors by the end of 2019 and up to March 31, 2020 of the Annual Report. 2. All Independent Directors’ Opinions: No Independent Directors have expressed opposition or qualified opinions. 3. Company dealing with the Opinions of independent Directors: None. (II) Further to the aforementioned matters, any adverse opinion or qualified opinion of the Independent Directors against the resolutions of the Board: Nil. (III) Communication between Independent Directors, Head of Internal Audit, and CPA: Please refer to our website. II. The recusal of the Directors from motions involving the interest of the names of the Directors concerned, the content of the motions, the reason for recusal for the avoidance of conflict of interest, and the participation in voting:

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(I) The 3rd session of the 13th term of board of directors’ meeting on September 27, 2019:
1. When discussing the proposal drafted by the 1st Remuneration Committee meeting of the 4th term, on the discussion of the transfer of treasury shares to managers and directors with the status of employees, Director (Mr.) Chin-Chung Lu voluntarily avoided the discussion and resolution as he was an interested party of this case.
(II) The 4th session of the 13th term of board of directors’ meeting on November 7, 2019:
1. When discussing the proposal drafted by the 2nd Remuneration Committee meeting of the 4th term, on the discussion of the 2019 salary adjustment for managers, Director (Mr.) Chin-Chung Lu who was present at the meeting voluntarily avoided the discussion and resolution as he was an interested party of this case.
(III) The 5th session of the 13th term of board of directors’ meeting on March 10, 2020:
When discussing the proposal drafted by the 3rd Remuneration Committee meeting of the 4th term, Director (Mr.) Chin-Chung Lu voluntarily avoided the discussion and resolution as he concurrently served as a manager of the Company and was an interested party of the case.

III . Implementation of Performance Evaluation by the Company’s Board of Directors: As followed.

IV. The objective of the Board in fortifying its function in the recent and present year (such as the establishment of the Auditing Committee, and enhancement of transparency) and assessment of the attainment:
In 2018 and up to March 31, 2019, the content and procedure of the Board of Directors and the selfdiscipline of the directors implemented in accordance with the procedures of the Board of Directors.
The Company has completed the 2019 performance evaluation of the board of directors and functional committees, and submitted the summary results of the performance evaluation to the board of directors on March 10, 2020 to strengthen the functions of the board of directors.
3.The Company has set up an Audit Committee and the Remuneration Committee to assist the board of directors in performing its supervision duties.

The attendance of independent directors of each Board of Directors Meeting in 2019 was specified below:

◎ Actual Attendance, ☆ Attended by Proxy, ＊ Non-attendance

	◎A	ctual Atten	dance,☆	Attended	by Proxy,	`＊`Non-a
Date Name	3/7	5/8	6/5	8/8	9/27	11/7
Lee, Yen-Sung	◎	◎	◎	◎	◎	☆
Lin, Ming-Ji	◎	◎	◎	◎	◎	◎
Chu, Jia-Siang	(None)	(None)	◎	◎	◎	◎

Note: Chu, Jia-Siang was newly-elected on June 5, 2019

Status of the evaluation of the board of directors and functional committees (2):

Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
The performance evaluation of the board of directors and functional committees shall be carried out at leastonce	The evaluation is carried out on the performance of the board of directors and functional committees from January 1, 2019 to December 31, 2019.	The scope covers the performance evaluation of the whole board of directors, individual directors and functional committees.	The evaluation methods include internal self-evaluation of the board of directors, self- evaluation of the members of the board of directors, and internal self-	The performance evaluation items of the board of directors and functional committees cover the following aspects: I.Degree of participation in the operation of the Company. II. Functional Committees’ recognition of their responsibilities. III. Improving the decision-making quality of the board of directors (functional committees). IV. Composition, structure and election of

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a year.			evaluation of the functional committees.	members of the board of directors (functional committees). V.Election and continuing education of directors. VI. Internal control. The items of directors' performance evaluation cover the following aspects: VII.I. Mastery of the Company's objectives and tasks. VIII.II. Directors’ recognition of their responsibilities. IX. III. Degree of participation in the operation of the Company. X.IV. Internal relationship management and communication. XI. V. Professional and continuing education of director. XII.VI. Internal control. The scoring criteria can be modified and adjusted according to the needs of the Company, and the scoring can also be done in a proportion weighted manner according to each measurement aspect.

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(2) Status on Operation of Audit Committee or Participation of Supervisors in the Operation of the Board of Directors

1. Status on Operation of Audit Committee

On June 5, 2019, the Company elected three independent directors at the general shareholders’ meeting, and set up the Audit Committee to replace the supervisor in accordance with the Securities and Exchange Act.

The Board convened 2 times (A) in 2019. The attendance of the Independent Directors is specified below:

Occupational Title	Name	Actual Attendance (B)	Attended by Proxy	Actual Attendance Rate [B/A (Number of meetings during the period of employment)]	Remarks (Date of Departure, Former or Newly Elected to Office, or Reelected to Office, and Date of Election)
Convener	Lee, Yen-Sung	2	0	100%	Newly-elected on June 5,2019
Member	Lin, Ming-Ji	2	0	100%	Newly-elected on June 5, 2019
Member	Chu, Jia-Siang	2	0	100%	Newly-elected on June 5, 2019
Additional Information: I. In case of any of the following circumstances in the operation of the Audit Committee, the date and session of the board of directors’ meeting, the contents of the proposal, the resolution results of the Audit Committee and the Company's handling of the Audit Committee's opinions shall be stated. (I)Items listed in Article 14-5 of the Securities and Exchange Act: See Schedule 1 for details. (II) Other matters not approved by the Audit Committee but agreed by more than two-thirds of all directors, except those mentioned above: None. II.For the implementation of the independent directors’ avoidance of proposals due to personal interests involved, please state the name of the independent director, the content of the proposal, the reason for the avoidance of personal interest and the voting result: None. III.The communication between the independent directors and the internal audit director and the independent auditor (including the communication on significant matters, methods and results of the Company's financial and business status). (I) The head of internal audit of the Company regularly communicates the results of the audit report with the Audit Committee. If there is any special situation, he will also report to the Audit Committee immediately. There was no such special situation in 2019.The Audit Committee of the Company has good communication with the head of internal audit. (II) The independent auditor of the Company will fully communicate and exchange reviews on the quarterly financial statements or audit results and other related matters before the meeting. If there is any special situation, he will immediately report to the Audit Committee. There was no such special situation in 2019.The Audit Committee of the Company has good communication with the independent auditor.

The Audit Committee of the Company aims to assist the board of directors in fulfilling its supervision of the quality and integrity of the Company's accounting, audit and financial reporting processes and financial control.

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The terms of reference of the Audit Committee are as follows:

I. Establishment of or amendment to the internal control system in accordance with Article 14-1 of the Securities and Exchange Act.
II. Assessment of the effectiveness of the internal control system.
III. Establishment of or amendment to the procedures for the handling of material financial business activities, such as acquiring or disposing of assets, engaging in derivatives transactions, loans to others and endorsement guarantees for others in accordance with Article 36-1 of the Securities and Exchange Act.
IV. Matters concerning the interests of the directors themselves.
V. Significant asset or derivative transactions.
VI. Major loans, endorsements or guarantees provided.
VII. Offering, issuing or private placement of equity securities.
VIII. Appointment, dismissal and remuneration of independent auditors.
IX. Appointment and dismissal of the head of finance, accounting or internal audit.
X. Annual financial report, business report and proposal on earnings distribution or loss compensation.
XI. Other significant matters prescribed by the Company or the competent authority.

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Table 1

Table 1
Date of Meeting	Details of Agenda	Opinions of all Audit Committee Member	Dealing with the Opinion from the Audit Committee
August 8, 2019 The 1st session of the 1st term Audit Committee	1`、`Consolidated financial report of the Company for the second quarter of 2019	Approved by all members present	Not applicable since all members present approved
	2`、`Internal audit business report	Approved by all members present	Not applicable since all members present approved
	3`、`Proposed cash capital increase of US$9.5 million for Chicony Electronics (Thailand) Ltd. (hereinafter referred to as CET)	Approved by all members present	Not applicable since all members present approved
	4`、`Loans to subsidiaries	Approved by all members present	Not applicable since all members present approved
	5`、`The Company's application for credit facilities from financial institutions	Approved by all members present	Not applicable since all members present approved
	6`、`Amendment to the Company's "Measures for Performance Evaluation of the Board of Directors"	Approved by all members present	Not applicable since all members present approved
	7`、`The subsidiaries’ formulation of "Procedures for Derivative Transaction Dealing", "Procedures for Loans to Others" and "Procedures for Acquisition or Disposal of Assets"	Approved by all members present	Not applicable since all members present approved
November 7, 2019 The 2nd session of the 1st term Audit Committee	1`、`Consolidated financial report of the Companyfor the thirdquarter of 2019	Approved by all members	Not applicable since all
	2`、`The Company's application for credit facilities from financial institutions	Approved by all members present	Not applicable since all members present approved
	3`、`The Company's provision of letter of commitment to financial institutions for subsidiaries	Approved by all members present	Not applicable since all members present approved
	4`、`The Company's endorsement guarantee for subsidiaries	Approved by all members present	Not applicable since all members present approved

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2. Status on Participation of Supervisors in the Operation of the Board of Directors

The participation of the Supervisors in the operation of the Board

The Board convened 2 times (A) in 2019. The attendance of the Directors is specified below:

Occupational Title	Name (Legal persons should disclose the name of the shareholder and its representative)	Actual Attendance (B)	Actual Attendance Rate [B/A (Number of meetings during the period of employment)]	Remarks (Date of Departure, Former or Newly Elected to Office, or Reelected to Office, and Date of Election)
Supervisor	Huang, Chin-Hsuan	2	100%	Resigned on June 5, 2019, should have attended 2 times
Supervisor	Huang, Chen-Chih	1	50%	Resigned on June 5, 2019, should have attended 2 times
Supervisor	Dong Ling Investment Co., Ltd. Legal Representative: Chang, Su- Tien	2	100%	Resigned on June 5, 2019, should have attended 2 times
Additional Information: I. The Organization and Function of the Supervisor: (I) Communication Between Supervisors and the Company’s Employees and Shareholders (for example, communication channels, methods, etc.): The Administration Department, Financial and Administrative Department, and the Audit Division were responsible for collecting relevant information and submitting it to the supervisor. The supervisor judges independently and communicates directly or indirectly with employees and shareholders if necessary. (II) Communication Between Supervisors and Internal Audit Director and CPA: (For example, matters, methods, and results for communicating with the Company's financial and business conditions.): The internal audit supervisor of the Company collects the audit report for financial, business, production, and personnel based on the Company's internal control system, and submits them to the supervisors on a regular basis. If any material abnormalities such as finance and business are found, in addition to written reports. They will also inform the supervisors through oral report; if any supervisors have any need to understand or recommend the Company's financial, business, production, personnel, or internal control system, they will also invite the internal audit supervisor to perform an audit or request improvement from all units again. When the CPA of the Company audits the implementation of the Company's internal control system, they will also submit the problems that should be improved or suggestions to the supervisors, and notify the supervisors of material abnormalities of the audit of the financial report. The Board of Directors sent the Business Report, Consolidated Financial Report, the Separate Financial Report, and the Distribution of Earnings Form to each of the supervisors; the Financial Report should be submitted to the supervisors after the Board of Directors has appointed the PwC Taiwan Accounting Firm, and will issue the Audit Report. The supervisors will receive the Audit Report and audit it. After the audit is completed, if it is considered that there is no disagreement, then an Audit Report is issued according to law. II. If Supervisors participating in Board Meetings have expressed opinions, state the date and session of the Board Meeting, proposal content, resolution of the meeting, and the response of the Company regarding the Supervisor’s opinion: None.

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	No Difference	(1) No Difference (2) No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	The Company has set a Corporate Governance Code of Practice and Audit Committee and refers to the Taiwanese Certificate of Governance Letter of No. 10700240891 amended to the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”. The 12th Session of the 17th Board of Directors passed amendments to the Corporate Governance Code of Practice. The current practice is based on the Corporate Governance Code of Practice and is disclosed in the Market Observation Post System and the Company's website (investor relationscorporate governance).	(I) In accordance with the “Management Measures for Stock Operations” of the Company, and appointed the CTBC Stock Agency to handle related operations, the Company also has a spokesperson, acting spokespersons, and investor relations department to deal with shareholder suggestions or doubts. We also have a dedicated mailbox on the Company's website (Investor RelationsInvestor Relations ContactContact Us) and dedicated personnel to deal with shareholders' comments. (II) The majority of the Company's major shareholders are the management team and long-term shareholders. The Company's directors and supervisors, managers, and shareholders holding more than 10% of the shares are required to report their shareholding changes to the Company on a monthly basis. During
	No
	Yes		 
Items for Evaluation		I. Has the Company instituted its own corporate governance best practice principles in accordance with the “Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies” and made disclosure?	II. The Equity Structure and Shareholders Equity of the Company (I) Has the Company established its internal operation procedure for responding to the suggestions, queries, disputes, and legal actions of the shareholders in accordance with the procedure? (II) Has the Company kept the list of the dominant shareholders that exercise de facto control of the Company and the parties that exercise ultimate control of these dominant shareholders under control?

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	(3) No Difference (4) No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	the two days after the day after the ex-rights (dividends) book close date, the Company's stock agency will be able to obtain the stock transfer books from the Company through the Taiwan Depository and Clearing Corporation, and provide the shareholding information of the major shareholders to the senior management. (III) The Company and its affiliated enterprise are independent in production, sales, research and development, personnel, and finance. The relationships with the Company are handled in accordance with the “Regulations on the Operation of Financial Businesses Related to Enterprises” set by the competent authority and the Company; In accordance with the “Endorsement Guarantee Measures” of the Company, the enterprises can only provide endorsement and guarantee for subsidiaries that have invested more than 50% of their shares. (IV) The “Internal Material Information Processing Operations and Regulations Governing the Prohibition of Insider Trading” has been established, and cooperate with the Company to set up an Audit Committee and approve the “Internal Material Information Processing Operations and Regulations Governing the Prohibition of Internal Transactions” by the 12th Session of the 17th Board of Directors. The Company prohibits insiders of the Company from making use of undisclosed information in the market for the trading of securities, and to disclose it on the Company's website (investor relationscorporate governanceimportant internal rules).
	No
	Yes	 
Items for Evaluation		(III ) Has the Company established and exercised risk control and firewall mechanisms with its affiliates? (IV) Has the Company instituted internal rules and regulations prohibiting insiders from using undisclosed information in the market for the trading of securities?

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	(1) No Difference (2) No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	(I) According to Article 20 of “the Corporate Governance Code of Practice”, members of the Board of Directors of the Company must have the knowledge, ability, and competency to perform their duties, in addition to the basic conditions of gender, age, nationality, and culture. 1. To set up Board Members, the Company will consider the diversity of Board Members in many aspects. At present, the 13th Board of Directors of the Company has a total of 8 members (including 3 independent directors), and all of them fulfill the third condition of Article 20 of the Corporate Governance Code of Practice as shown in Table 1. 2. According to the list of the 13th board of director: 12.5% of the directors have employee status, 37.5% are independent directors, and 12.5% are female directors. (II) It is expected that the relevant units will be completed in a timely manner in accordance with the actual needs of the Company. (III) On August 8, 2019, the board of directors approved the revision of
	No
	Yes	   
Items for Evaluation		III . The Organization and Function of the Board (I) Has the Board developed its policies in diversity relevant to the composition of the members and has it properly pursued these policies? (II) Has the Company voluntarily established other functional committees further to the establishment of a remuneration committee and auditing committee? (IV) Has the Company established the rules and regulations and the

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	(3) No Difference (4)No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	the Company's "Measures for Performance Evaluation of the Board of Directors" and changed its name to "Measures for Performance Evaluation of the Board of Directors and Functional Committees". Performance evaluation is conducted for the entire board of directors, individual directors and functional committees at least once a year. The scoring for the board of directors, individual directors and the Audit and Remuneration Committee 2019 has been conducted according to specific evaluation indicators, and the performance evaluation report has been completed according to the evaluation results; the report will be submitted to the board of directors on March 10, 2020.The evaluation measures and the results of the 2019 evaluation have been disclosed on the Company's website (Investor Relations - Corporate Governance- Board of Directors).Article 7 of the Measures provides that the results of the performance evaluation of the board of directors shall be an important reference for the selection or nomination of directors. (IV) The Company completed the 2019 annual assessment of the independence of the CPA through the 13th Session of the 5th Board of Directors. 1. PwC Taiwan CPA firm has issued a “Communication Letter with the Governance Body”: Engagement Partner and Responsibilities Statement, and Statement of Independence of the CPA. 2. The Company regularly assesses the independence of the CPA through the stock unit and confirms that the CPA does not hold
	No
	Yes
Items for Evaluation		methods for the evaluation of Board performance, has it conducted performance evaluation at regular intervals of each year, and will the results of performance evaluation be reported to the board of directors, and applied as a reference for salary and remuneration of individual directors and nomination for re- election`？` (IV) Has the Company assessed the independence status of the CPAs at regular intervals?

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.		No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	any shareholding and any position in the Company and completed the “the Board of Directors is to assess the CPA and the accounting firm of independent checklist”.	The 12th Session of the 17th Board of Directors amended articles 3, 1 of the “Corporate Governance Code of Practices” of the Company in accordance with Letter No. 10700240891 of the Taiwanese Certificate of Governance. The amended provisions are as follows: The Company's Financial and Administrative Department is responsible for corporate governance-related matters. Corporate governance-related matters include the following: I. Deal with related affairs according to the regulations of the Board of Directors and the Shareholders Meeting. (A total of 6 meetings for the Board of Directors and 1 Annual General Meeting were held in 2019.) II. Compilation of the minutes of Meetings of the Board and Shareholders Meeting on record. (A total of seven meetings minutes for the Board of Directors and one Shareholders Meeting minutes were completed in 2019.) III. Assisting the directors to engage in their job and continue to learn. (On November 7, 2019, the Company arranged a six-hour course for the directors at the Taiwan Corporate Governance Association. IV. Providing the information required by the directors to perform their business.
	No
	Yes		
Items for Evaluation			IV. Does the listed or OTC company have competent and appropriate number of corporate governance personnel, and have designated the corporate governance director to be responsible for corporate governance related matters (including but not limited to providing information required by directors and supervisors to carry out business, assisting directors and supervisors on legal compliance, handling related matters of the board of directors’ meeting and shareholders' meeting in accordance with the law, taking minutes of the board of directors’ meeting and shareholders' meeting, etc.)?

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.		No Difference	No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	V. Assisting directors to comply with the related laws. the Board of Directors" and changed its name to "Measures for Performance Evaluation of the Board of Directors and Functional Committees"; revised the "Procedures for Loans to Others" and "Organizational Rules of the Audit Committee". VI. Other items are established in accordance with the Articles of Incorporation of the Company or contract. The Company's Financial and Administrative Department has three qualification employees for obtaining CPA licenses from the US and five employees for obtaining CPA accountants licenses from the Republic of China, which meet the qualifications required by corporate governance personnel. Revised the Company's "Measures for Performance Evaluation of	The Company has set up a website in both Chinese and English, and an area dedicated to the corporate social responsibility of Chicony Group, including the company policy and statement, corporate social responsibility commitment and policy, supplier management policy, employee care and stakeholder areas, and the contact method of the Social Responsibility Group of Chicony Group, in order to respond to the concerns of stakeholders on corporate social responsibility issues in a timely manner.	The Company's Stock Operation Department is handled by the professional stock agency - the agency department of CTBC bank, and they are responsible for the Company's affairs of Shareholders’
	No
	Yes			
Items for Evaluation			V. Has the Company established channels for the communications with the stakeholders (including but not limited to the shareholders, employees, customers, and suppliers), and the section for the shareholders on the official website of the Company to respond to all concerns of the stakeholders on corporate social responsibility?	VI. Has the Company appointed a professional share registration and investors service agent for handling

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.		(1) No Difference (2) No Difference (3) No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	Meetings.	(I) The Company's Chinese and English websites have been established, and the website is http://www.chicony.com.tw/: And set up an investor relationship zone, which includes: 1. Investor Information: Quarterly Report, Material Information, Stock Price Information, Dividend Distribution Calendar, Dividend Policy 2. Shareholders' Column: Shareholder Service, Notice of Meeting, Proposal Manual, Annual Report of Shareholders' Meeting, every cases Result, Proceedings 3. Financial Information: Financial Statements, Monthly Consolidated Revenue 4. Corporate Governance: Board of Directors, Important Internal Rules 5. Investor Contact Window. (II) In addition to the establishment of the Spokesperson and acting spokesperson system, the Company has set up an Investor Relations Department to appoint personnel to be responsible for the collection and disclosure of Company information. It also provides financial and business information of the Company to investors by the Market Observation Post System, institutional investors conference, the Company's website, and newspapers and magazines. (III) The Company always announces and reports financial reports before the specified deadline.
	No
	Yes		 
Items for Evaluation		matters pertaining to the Shareholders Meeting?	VII. Disclosure of Information (I) Has the Company installed a website for the disclosure of information on financial position and operation, as well as corporate governance? (II) Has the Company adopted other means for disclosure (such as the installation of a website in the English language, appointment of designated persons for the collection and disclosure of information on the Company, the implementation of ae spokesman system, and videotaping institutional investor conferences)? (III) Does the company announce and report the annual financial report within two months after the end of the fiscal year, and announce and report the first, second and third quarter financial reports and the

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.		No Difference
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description		(I) The Company pays attention to the health of colleagues. In addition to setting up a medical office, it hires professional doctors and nurses to conduct various health consultations, regular blood pressure tracking, and regular staff health, examination, and the brand new “Chicony Smart Green Building” has moved to the district of Sanchong District, New Taipei City in 2016. In addition to providing a better workplace, the Smart Green Building of the group also provides a swimming pool, fitness center, and other facilities to enable employees to have more convenient sports and leisure spaces. It also responds to government policies, promotes work-life balance projects, takes the initiative to pay attention to the work situation of colleagues, sets up a multi-type society, and family day and other activities are held on regular holidays to encourage employees to take part in the activities with their families after work, so as to balance the development of work and life.; set up a nursing room in the work environment, and constructed a child care union mechanism to allow employees to take care of their families while they are working. The Company has established an Employee Welfare Committee to provide holiday bonus, travel, birthday, and labor festivals, etc., and also provides excellent “fertility bonus” that rewards for active employees. The Human Resources Department also organizes training activities covering various professional and management courses. It encourages employees to take on-the-job training, and
	No
	Yes		
Items for Evaluation		operation of each month ahead of the required time limit?	VIII. Is there any other essential information that would help us to understand the pursuit of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholder rights, the continuing education of the Directors and Supervisors, the pursuit of a risk management policy and standard of risk assessment, the pursuit of a customer policy, and professional liability insurance coverage for the Directors and Supervisors)?

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	also organize health lectures and environmental safety training for employees to pay attention to physical, mental, and environmental health. In 2019, a total of 152 training events and lectures were held. The Industrial Safety and Health Department obtained ISO 14001/45001/TOSHMS 15506 Certification in 2018. The certification shows the Company's focus on the green environment and occupational safety and health. The Company actively makes an environment that meets the peace of mind and healthy living requirements of employees and promises to give a reasonable and warm space for care, study, and growth to employees, and creates the highest employee centripetal force. (II) The Company senior management has always operated on the principles of perseverance, integrity, and profitability, creating long-term and stable interests for shareholders, and creating multi- wins by working with customers, suppliers, and correspondents. In 2019, the Company was re-selected as a constituent of the “FTSE4Good TIP Taiwan ESG Index” of the TAIEX, representing that outsiders recognize the Company responsibilities for sustainable development. (III) Both the Company and its affiliated enterprises are only allowed to provide endorsement guarantees and fund loans to subsidiaries identified in accordance with the International Financial Reporting Standards. The distinction between responsibility and accountability of personnel, assets, and finances between the Company and affiliated enterprises are clearly defined and a firewall should be properly established. Business dealings with
	No
	Yes
Items for Evaluation

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Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.	Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description	affiliated enterprises should be based on the principle of fairness and reasonableness and set written specifications for related finance and business by themselves, and transfer of interests is prohibited and Non-arm's Length Transactions are prevented. (IV) Directors' Further Education: The directors of the Company have participated in the following further study courses: (1) "The Impact of Economic Substance Law and Global Anti-Tax Avoidance on Corporate Governance from the Perspective of Directors and Supervisors" organized by the Taiwan Corporate Governance Association; (2) "Briefing on the Effective Performance of the Director’s Function" organized by the Taiwan Stock Exchange; (3) "Integrating Corporate Governance and Social Responsibility into Corporate Culture" organized by the ROC Economic Development Association. In addition, the Company has dedicated personnel to collect relevant laws and regulations and information, and submit a summary to the directors for reference. (V) The Company has purchased liability insurance for the Directors and Supervisors: Since August 2002, the Company has purchased liability insurance for the protection of the Directors and Supervisors every year.
	No
	Yes
Items for Evaluation

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Items for Evaluation State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.) Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason. Yes No Summary Description Improvements: On August 8, 2019, the board of directors passed the resolution to amend the "Measures for the Performance Evaluation of the Board of Directors" and change its name to "Measures for the Performance Evaluation of the Board of Directors and Functional Committees". At least once a year, a performance evaluation is conducted for the overall board of directors, individual directors and functional committees. For the 2019 evaluation of the board of directors, individual directors, the Audit Committee and the Remuneration Committee, scores have been given according to specific evaluation indicators, and the performance evaluation report has been completed according to the evaluation results and submitted to the board of directors on March 10, 2020. The evaluation method and the results of the 2019 evaluation have been disclosed. The diversity of the Board of Directors of the Company is as follows:	Items for Evaluation State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.) Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason. Yes No Summary Description Improvements: On August 8, 2019, the board of directors passed the resolution to amend the "Measures for the Performance Evaluation of the Board of Directors" and change its name to "Measures for the Performance Evaluation of the Board of Directors and Functional Committees". At least once a year, a performance evaluation is conducted for the overall board of directors, individual directors and functional committees. For the 2019 evaluation of the board of directors, individual directors, the Audit Committee and the Remuneration Committee, scores have been given according to specific evaluation indicators, and the performance evaluation report has been completed according to the evaluation results and submitted to the board of directors on March 10, 2020. The evaluation method and the results of the 2019 evaluation have been disclosed. The diversity of the Board of Directors of the Company is as follows:	Items for Evaluation State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.) Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason. Yes No Summary Description Improvements: On August 8, 2019, the board of directors passed the resolution to amend the "Measures for the Performance Evaluation of the Board of Directors" and change its name to "Measures for the Performance Evaluation of the Board of Directors and Functional Committees". At least once a year, a performance evaluation is conducted for the overall board of directors, individual directors and functional committees. For the 2019 evaluation of the board of directors, individual directors, the Audit Committee and the Remuneration Committee, scores have been given according to specific evaluation indicators, and the performance evaluation report has been completed according to the evaluation results and submitted to the board of directors on March 10, 2020. The evaluation method and the results of the 2019 evaluation have been disclosed. The diversity of the Board of Directors of the Company is as follows:	Leadership and Decision- making								
Variation from the Corporate Governance Best Practice Principles for TWSE/TPEx-listed Companies and the reason.		Improvements: On August 8, 2019, the board of directors passed the resolution to amend the "Measures for the Performance Evaluation of the Board of Directors" and change its name to "Measures for the Performance Evaluation of the Board of Directors and Functional Committees". At least once a year, a performance evaluation is conducted for the overall board of directors, individual directors and functional committees. For the 2019 evaluation of the board of directors, individual directors, the Audit Committee and the Remuneration Committee, scores have been given according to specific evaluation indicators, and the performance evaluation report has been completed according to the evaluation results and submitted to the board of directors on March 10, 2020. The evaluation method and the results of the 2019 evaluation have been disclosed.
			Understanding of International Market								
State of Implementation (Give the summary description in the field provided irrespective of choosing either “Yes” or “No” in the answer.)	Summary Description
			Industry Knowledge								
			Crisis Management Capacity								
			Corporate Management Capacity								
			Accounting and Financial Analysis Capacity								
	No
	Yes		Operation Judgment Capacity								
Items for Evaluation
			Gender	Male	Male	Male	Male	Female	Male	Male	Male
			Core Items of Diversity Names of Directors	Hsu, Kun-Tai	Lu, Chin-Chung	Tsai, Ming-Hsien	Dong Ling Investment Co., Ltd. Legal Representative: Liu, Chia-Sheng	Li, Cih-Jing	Lee, Yen-Sung	Lin, Ming-Ji	Chu, Jia-Siang

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(4) If the Company has Established a Remuneration Committee, Disclose its Organization, Function, and Operation
Profiles of the Members of the Remuneration Committee

Identity (Note 1)	Condition Name	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Do they have more than 5 years of work experience and met the professional qualifications specified below?	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	Conform to the status of independence (Note 2).	The number of public companies where the person also holds positions in their remuneration committees.	Remarks
		A lecturer or at a higher position at a public or private school of higher education in the disciplines of commerce, law, finance, accounting, or other specializations required by the business of the Company.	A professional or technician who has passed the national examination for professionals like court judge, prosecutor, lawyer, certified public accountant, or any other expertise required for the business operation of the Company with the issuance of a certificate of completion.	Work experience in commerce, law, finance, accounting, or others required by the business of the Company.	1	2	3	4	5	6	7	8	9	10
Independent Director	Lin, Ming-Ji														2	-
Independent Director	Lee, Yen-Sung														3	-
Independent Director	Chu, Jia-Siang														0	-

Note 1: For identity, fill in Director, Supervisor, or others.

Note 2: If the members meet the following conditions in the period of 2 years before the

assumption of office or within the term of office, put a “  ” in the appropriate boxes.
(1) Not employed by the company or any of its affiliated companies.
(2) Not a director or supervisor of the company or any of its affiliates. This restriction does not apply to independent director positions in the company, its parent company or subsidiary, or subsidiary of the same parent company, which have been appointed in accordance with local laws or laws of the registered country.
(3) Does not hold more than 1% of the company's outstanding shares in their own names or under the name of spouse, underage children, or proxy shareholder; nor is a top-10 natural-person shareholder of the company.
(4) Not a manager in (1). Or not a spouse, kin at the second tier under the Civil Code, or a lineal blood relative within the third tier under the Civil Code as specified in (2) and (3).
(5) Not a director, supervisor or employee of a corporate shareholder who holds more than 5% of the outstanding shares issued by the Company, or a director, supervisor or employee of a corporate shareholder who is among the top 5 shareholders. (This restriction does not apply to independent director positions in the company, its parent company or subsidiary, or subsidiary of the same parent company which have been appointed in accordance with local laws or laws of the registered country.)
(6) Not a director, supervisor or employee of other companies controlled by the same person with over half of the Company’s director seats or shares with voting rights. (This restriction does not apply to independent director positions in the company, its parent company or subsidiary, or subsidiary of the same parent company which have been appointed in accordance with local laws or laws of the registered country.)
(7) Not a director, supervisor or employee of another company or institution who is the same person or spouse of the Company’s chairperson, president or equivalent position (This restriction does not apply to independent director positions in the company, its parent

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company or subsidiary, or subsidiary of the same parent company which have been appointed in accordance with local laws or laws of the registered country.)

(8) Not a director, supervisor, manager or shareholder holding more than 5% of the outstanding shares of a specific company or institution in a business or financial relationship with the Company. (Not applicable in cases where the specific company or institution holds 20% or more but less than 50% of the company’s outstanding shares, and is an independent director of the Company, its parent company or subsidiary, or subsidiary of the same parent company which have been appointed in accordance with local laws or laws of the registered country.)
(9) Not a professional, owner, partner, director, supervisor, manager of proprietorship, partnership, company or institution that audited or provides business, legal, financial and accounting services for total compensation not exceeding NT$500,000 in the most recent two years to the Company or its affiliates or a spouse to the persons. This does not apply to members of the Remuneration Committee, Public Tender Offer Reviews Committee, or Merger and Acquisition Special Committee performing duties in accordance with the Securities and Exchange Act or laws and regulations related to mergers and acquisitions.
(10) Falling beyond the scope of particulars inscribed in Article 30 of the Company Act.

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Responsibilities of the Remuneration Committee
(1) The Committee shall faithfully perform the following authority with the attention of a good manager and submit the recommendations to the Board of Directors for discussion. The Remuneration of Supervisors needs to be approved by the Articles of Incorporation or the resolution of the Shareholders' Meeting, then reported to the Board of Directors:
- A. To regularly review the Company “Remuneration Committee Organization Rules” and to propose amendments to it.
- B. To establish and regularly review the annual and long-term performance objectives and remuneration policies, systems, standards, and structures of the directors, supervisors, and managers of the Company.
- C. To determine the content and amount of their individual salary remuneration by regularly assessing the achievement of the performance targets of the Company directors, supervisors, and managers.
(2) When the committee performs the previous authority, it shall be based on the following principles:
- A. Ensure that the Company remuneration meets relevant laws and regulations and is sufficient to attract talent.
- B. The performance assessment and remuneration of directors, supervisors, and managers should refer to the peers’ level of salary payment, and consider the time spent by the individual, the responsibilities, the achievement of personal targets, the performance of other positions, and the Company's recent compensation for the same position. The remuneration of employees, and the achievement of the Company's short-term and long-term business objectives, the Company's financial status, etc., assesses the relevance of individual performance to the Company's operating performance, and future risks.
- C. The ratio of dividends of the short-term performance of directors and senior managers and the payment time of variable remuneration should be determined by considering the characteristics of the industry and the nature of the business.
- D. Members of this Committee cannot participate in discussions and voting on their personal remuneration decisions.
(3) The remuneration referred to in the preceding two items, including cash remuneration, stock options, dividend participation, retirement benefits or separation payments, various allowances, and other measures with substantial rewards; the records of remuneration of the directors, supervisors, and managers' remuneration shall be consistent with the Annual Report of the public offering company.
(4) If the remuneration of the company of subsidiary directors and managers base on the company of subsidiary is responsible for decision-making matters, they must be approved by the Board of Directors of the Company, and should be submitted to the Board of Directors for discussion after the Committee has made recommendations.
Information on the Operation of the Remuneration Committee
(1) The Remuneration Committee of the Company consists of three members.
(2) Current Term: From June 5, 2019 to June 4, 2022.

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(3) The Compensation Committee held two meetings in 2019 (A), the qualifications and attendance of the Committee are shown as follows:

Occupational Title	Name	Actual Nu mber of Attendances (B)	Attendances by Proxy	Actual Attendance Rate (%) [B/A (Number of meetings during the period of employment)]	Remarks (Date of Departure, Former or Newly Elected to Office, or Reelected to Office, and Date of Election)
Convener	Lin, Ming-Ji	2	0	100	Re-elected on June 5, 2019
Committee Member	Lee, Yen- Sung	2	0	100
Committee Member	Chu, Jia- Siang	2	0	100
Additional Information: I. If the Board declines to accept or revise the recommendations of the Remuneration Committee, specify the meeting date, the session, the content of the motion, the resolutions of the Board, and the response of the Company to the opinions of the Remuneration Committee (if the Board resolved a higher level of remuneration than the recommendation of the Remuneration Committee, specify the difference and the reason for the difference): None II. If a specific member of the Remuneration Committee has adverse or qualified opinions on the resolutions of the Remuneration Committee on record or in written declaration, specify the meeting date, the session, the content of the motion, the opinions of all members, and the response to the opinions of the members: None

Schedule 1:

Date of Meeting	Details of Agenda	Opinions of All Remuneration Committee Members	Dealing with the Opinion from the Remuneration Committee
March 7, 2019 The 6th session of the 3rd term	(I) Discussion on the salary and remuneration of newly appointed managers. (II) Discussion on the distribution of the remuneration of employees and directors and supervisors for 2018. (III) Discussion on the bonus payments to managers on Dragon Boat Festival and Mid- Autumn Festival in 2019.	Approved by all members of the Committee	Proposed to the board of directors, and approved by all directors present
September 27, 2019 The 1st session of the 4th term	(I) Discussion on the transfer of treasury shares to managers.	Approved by all members of the Committee	Proposed to the board of directors, and approved by all directors present
November 7, 2019 The 2nd session of the 4th term	(I) Discussion on the manager salary adjustment plan in 2019. (II) Discussion on the evaluation of directors’, supervisors’ and managers' achievement of performance objectives in 2018 and the actual payment of salary and remuneration. (III) Discussion on the 2019 bonus payments to managers. (IV) Discussion on the managers’ remuneration in 2019.	Approved by all members of the Committee	Proposed to the board of directors, and approved by all directors present

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	I.No difference
State of Implementation	Summary	I.The Company has set up a dedicated unit to examine the business ethics, employee health and safety, environmental management system and other norms in accordance with the “Corporate Social Responsibility Best Practice Principles for Chicony Group”, and established relevant policies and systems to grasp and respond to the risks related to the environment, employee safety, customers, suppliers and other aspects in operation activities through the Company's management system. 1.Environmental protection: For a long time, the Company has been actively promoting energy conservation and carbon reduction, strengthening employees' environmental awareness, and continuously promoting and passing various environmental management certification (such as ISO14001 and ISO14064-1). 2.Social responsibility: The Company attaches great importance to talents and caring for employees, maintains a good labor-employment relationship, actively cooperates with universities to jointly promote industry- university cooperation and the internship plan, assists in the development of students' professional capabilities to enhance their future employment ability, and continuously promotes and passes various occupational safety and health management certification (such as ISO45001, OHSAS18001 and TOSHMS/CNS 15506).
	No
	Yes	
	Assessment Items	`I.`Does the Company implement the risk assessment of environmental, social, and corporate governance issues related to corporate operation and establish relevant risk management policies or strategies based on the principle of materiality?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	II. No difference 1.No difference
State of Implementation	Summary	3.Corporate governance: The Company abides by various laws and regulations, strictly keeps business secrets and implements internal control system, implements ethical corporate management and code of ethical behavior, and promotes and passes various management systems (such as ISO 27001 Information Security Management Certification, ISO 9001 Quality Management, and C-TPAT Anti- terrorism Certification). II. The Company has set up a Corporate Social Responsibility Committee chaired by the Chairman, with the President as the vice chairman and the presidents of the subsidiaries as the members. The members are responsible for formulating and reviewing the corporate social responsibility policies, systems and relevant management policies of the Company, and reporting the implementation results of corporate social responsibility and ethical corporate management to the board of directors every year. `1.`The Company establishes the applicable environmental management system subject to the industry characteristics. Each of its factories has acquired the ISO 1400 environmental management license and OHSAS 18001 occupational safety and health management license, and practices the ISO environmental management regulations strictly.
	No
	Yes	 
	Assessment Items	II. Does the Company establish specific (or part-time) units in charge of promote CSR and have the senior management authorized by the Board of Directors to handle matters and report the processing results to the Board of Directors? III.Environment Issues 1.Dose the Company establish the environmental management policies suitable for the Company's industry characteristics?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	2.No difference 3.No difference
State of Implementation	Summary	2.The Company commits itself to upgrading the efficient use of various resources and adopts the renewable materials posing low impact to the environment, including solar power generation, recycling of production line energy and classification and recycling of waste. The recyclable kitchen waste may be disposed of by professional service suppliers who hold the relevant license, while the other domestic waste may be disposed of by the local government’s environmental protection unit. By way of this, the Company expects to increase the efficient use of all resources and gradually reduce the burden the environment suffers. `3.`The potential risks of climate change in which the Company encounters are mainly in the environmental and operational aspects, such as the lack of recourses, increase in raw material costs, instability of transportation requirement, and the threat to the safety of employees due to extreme weather. All of these may result in the direct/indirect impact on the business operation of the Company. In response to the impact posed by the emission of greenhouse gas to the global climate change and environment, the Company establishes the greenhouse gas management procedure and sets the greenhouse gas reduction target to keep improving the reduction of greenhouse gas emission and the management, recycling and reuse of the waste. Meanwhile, the Company checks the greenhouse gas emission and performs the verification by a third party each year.
	No
	Yes	 
	Assessment Items	2.Do se the Company commits itself to upgrade the efficient use of various resources and adopts renewable materials posing low impact to the environment? 3.Does the Company assess the present and future potential risk and opportunities of climate change in relation to the Company and adopt countermeasures related to climate issues?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	4.No difference
State of Implementation	Summary	4.The headquarters and all plants prepare statistics of greenhouse gas emissions(verified by third party), water consumption and total weight of waste(Please refer to CSR report), formulate policies and objectives for energy conservation and carbon reduction, greenhouse gas reduction and water consumption reduction, and continue to promote environmental management through propaganda, training, continuous promotion of equipment efficiency improvement, energy conservation measures, and audit and improvement tracking to improve environmental management. All staff are required to save energy and carbon, including water, electricity and paper, to avoid unnecessary waste, and the effect of energy saving and carbon reduction is included in the semi-annual performance evaluation index. i.In 2019, the greenhouse gas emission of the headquarters and all plants is 89,859.55 t-co2e, which is 398.299 t-co2e or 0.44% lower than 90,257.846 t-co2e in 2018. In 2020, the greenhouse gas target is 89,814.617 t-co2e, with an estimated reduction of 0.01% compared to 2019. ii.2. In 2019, the water consumption of the headquarters and all plants is 1,373.924 thousand tons, which is 132,032 thousand tons, or 8% less than 1,505.956 thousand tons in 2018.The water consumption in 2020 is estimated to be 1,369.802 thousand tons, with an estimated reduction of 0.3%.
	No
	Yes	
	Assessment Items	`4.`Does the Company gather statistics of the greenhouse gas emission, water consumption and the gross weight of the waste in the past 2 years and establish policies for energy saving, carbon reduction, reduction of greenhouse gas emission, and water consumption or other waste management.

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	1.No difference 2.No difference
State of Implementation	Summary	iii.In 2019, the total amount of waste of the headquarters and all plants (one more plant in 2019 than in 2018) is 2,101.93 tons, which is 201.71 tons or about 11% more than 1,900.22 tons in 2018. In 2020, the Company will strengthen the classified recycling of waste and develop green products. The total amount of waste is estimated to be 2,099.83 tons, with an estimated reduction of 0.01%. `1.`The Company fully complies with relevant labor laws and regulations and protects labor human rights to ensure that employment, salary, welfare, health, safety, and employees’ legal rights and interests are protected, and are not differentiated by gender, ethnicity, religion, etc. In order to manage and continuously improve Company social responsibility, the social responsibility management system has been set in accordance with the requirements of the RBA Corporate Responsibility Alliance. 2.The Company has formulated various employee welfare measures in accordance with the Labor Standards Act and relevant laws and regulations, and provides competitive salaries as well as grants and bonuses to employees to share earnings with them. (Please refer to 5.5)
	No
	Yes	 
	Assessment Items	IV.Social Issues 1.Dose the Company formulate appropriate management policy and procedure in accordance with relevant regulations, laws and the International Bill of Human Rights? `2.`Does the Company establish and implement proper employee benefit measures (including the salary, holidays, and other benefits) and appropriately reflect the corporate business performance or achievements in the employee remuneration?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	3.No Difference 4.No Difference
State of Implementation	Summary	3.The Company pays attention to the health of its employees. The headquarters and all plants have passed the certification of ISO45001, OHSAS18001, and TOSHMS/CNS 15506 occupational safety and health management system. The Company regularly carries out health examinations of its employees and entrusts a qualified testing agency to carry out the verification of the working environment every year. Training on fire safety and firefighting, AED + CPR first aid training and evacuation drills are also held every year, and special training on chemical safety, electrical safety, machinery and equipment safety and fire safety are carried out as well. In September 2019, the employees of the Taipei headquarters participated in the activities and course of the Occupational Safety and Health Hazard Prevention Tour among Enterprises (Group Work Safety Week) which was organized by the Institute of Labor and Occupational Safety and Health, Ministry of Labor. In addition to the annual fire safety and evacuation drills, SCBA, European style fire- fighting clothing and other fire-fighting equipment are purchased for the Group’s headquarters building. The Chicony Fire Fighting Response Team is also established and personnel are sent to participate in advanced training every year. A safety officer audit team is also set up in the Group to implement audit/scoring and improvement on a regular basis, and distribute bonus to outstanding units. 4.In order to improve the Company human quality, the Company has a full- time staff responsible for establishing a talent pool, carrying out manpower inventory planning, and regularly organizing various educational and training activities.
	No
	Yes	 
	Assessment Items	3.Dose the Company provide a safe and healthy working environment, and provide employees with regular safety and health education? 4.Dose the Company set up effective career development and training programs for its employees?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	5.No difference 6.No difference
State of Implementation	Summary	5.The Company fully implements and abides by the laws and regulations on the protection of consumers' rights and interests, and makes customer satisfaction one of the Company's important strategies. In addition to the business contact window, the Company has a CEO direct grievance mailbox management method, and has contact information under Investor Relations and Corporate Social Responsibility of the Company's website for questions, suggestions and complaints. The Company properly handles and gives feedback in good faith in order to protect the rights and interests of customers. 6.The Company conducts supplier management in accordance with the RBA code of conduct. Suppliers shall fill in the self-assessment form based on the five major evaluation items of the RBA criteria, in order to enable the Company to understand the suppliers' current self-assessed status, and further audit the suppliers' performance of social responsibility according to the RBA criteria, so as to achieve the management, supervision and guidance of suppliers through the requirements of consistent criteria.
	No
	Yes	 
	Assessment Items	5.Does the Company comply with relevant laws and international standards with regards to the customer’s health, safety and privacy, marketing, and labeling in relation to the products and services and establish relevant policies and complaint procedure to protect the right of the customers? 6.Does the Company establish the supplier management policy to require the supplier to comply with relevant regulations on issues of environmental protection, occupational safety and health or labor rights and provide its status of implementation?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	V.No difference
State of Implementation	Summary	V.Each year, the Company prepares the Chicony Electronics Corporate Social Responsibility Report with reference to the GRI international reporting specifications and guidelines, and discloses the specific implementation results of the Company's corporate social responsibility on MOPS and the Company's website. The aforementioned 2019 report will be certified by a third party as required and is disclosed in this report.
	No
	Yes	
	Assessment Items	`V.`Does the Company refer to the international criteria or instructions on the preparation of reports to prepare reports disclosing the non- financial information of the Company, such as the corporate social responsibility report? Does the report mentioned above have been assured, verified, or certified by a third party?

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Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	Difference from “Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies” and reasons	VII.Other Important Information That Helps us to Understand the Operation of Corporate Social Responsibilities (such as the Company adopted systems, measures, and performance in environmental protection, community participation, social contribution, social services, social welfare, consumer rights, human rights, safety and health, and other social activities): Important information about the operation of CSR (including the co-prosperity and communication of interested parties, the use of the “Conflict Minerals” policy for supplier management policies, etc.) will be disclosed on the Company website (website: http://www.chicony.com.tw/) under the corporate social responsibilities or refer to the Company Corporate Social Responsibilities Report.
State of Implementation	Summary
	No
	Yes
	Assessment Items

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Difference	from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	1.No Difference
State of Implementation	Summary	1`、`The “Integrity Operation Principles” has been established in 2014 and the Audit Committee has been set up by the Company. On March 7, 2018, the 12th Session of the 17th Board of Directors passed the amendment of the “Integrity Operation Principles” and reported to the Shareholders' Meeting. The current operations are implemented in accordance with the spirit of “integrity of management procedures and behavior guidelines”. In order to implement the integrity management policy in all operations and systems of the Company, the Board of Directors and management of the Company manage the Company in faith and conduct business activities in a fair and transparent manner. In 2019, the Company was re-selected as a constituent of the “FTSE4Good TIP Taiwan ESG Index” of the TAIEX, representing that outsiders recognize the Company responsibilities for sustainable development.
	No
	Yes	
	Assessment Items	I.Enactment of ethical management policy and program 1.Whether the Company formulates the ethical management policy approved by the board of directors The Company has the ethical business policy expressed explicitly in the Company’s regulations and external documents, as well as the active implementation committed by the board of directors and management.

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	2.No Difference
State of Implementation	Summary	2`、`In accordance with the business philosophy and policies of the Company's "Ethical Corporate Management Best Practice Principles", the Company has formulated its "Operation Procedures and Behavior Guidelines for Ethical Corporate Management". In Articles 6 to 15 of the Behavior Guidelines, the Company has prescribed the preventive measures and operations for the conducts under paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies", and designated the Administrative Department as the responsible unit to handle the revision, supervision and implementation of the operation procedures and behavior guidelines
	No
	Yes	
	Assessment Items	2.Does the Company establish a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activities within their business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly with the inclusion of the prevention measures against each behavior specified in Article7 Paragraph 2 of the “Ethical Corporate Management Bes t Practice Principles for TWSE/GTSM Listed Companies”?

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	3.No Difference 1.No Difference
State of Implementation	Summary	3`、`In 2014, the Company formulated its "Operation Procedures and Behavior Guidelines for Ethical Corporate Management" and stipulated the operation procedures and behavior guidelines for the prevention of unethical conducts, and designated the Administrative Department as the responsible unit, which reviewed and revised the "Operation Procedures and Behavior Guidelines for Ethical Corporate Management" in March 2019. 1`、`In addition to complying with the Company “Integrity of Operating Procedures and Behavior Guidelines”, in order to prevent the risk of possible bribery, the Company has signed a “Completion of Integrity Letter of Commitment” with the manufacturer. When signing a commercial contract with others, in addition to fully understanding each other's integrity management, the contract will be performed in good faith management spirit; if necessary, before the signing of the contract, the integrity management spirit will be included in the contract depending on the type of contract.
	No
	Yes	 
	Assessment Items	3.Does the Company specify the operating procedures, behavior guidelines, discipline of violation and complaint system in the prevention program for unethical conduct, and implement the program accordingly? Does the Company regular review and modify the program mentioned above?”? II.Implementation of ethical business 1.Evaluation of individuals that have a record of unethical behavior and regulation of the ethical code of conduct in the business contract.

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	`2.`No Difference
State of Implementation	Summary	2`、`The designated Administrative Department of the Company is a dedicated unit responsible for the revision, implementation, interpretation, consulting services, and notification of content registration and other related operations and supervision of the “Integrity of Operation Procedures and Behavior Guidelines”, and reports to the Board of Directors on a regular basis every year. On August 8, 2019, the summary of the implementation is as follows: i.In June 2019, the Corporate Social Responsibilities Report (2018) of Chicony Electronics was issued and published on the Company website and Market Observation Post System. ii.In August 2019, the Corporate Social Responsibilities Report (2017~2018) of Chicony Group was issued in Chinese and English. iii.The Company is working on the Chicony Electronics Corporate Social Responsibility Report (2019) in accordance with the Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports by TWSE Listed Companies, and expects it to be issued by the end of June 2020. iv.The implementation of public welfare activities is as follows: 1`、`Education promotion: Donations to National Taipei University of Technology (R&D New Talent Scholarship), Aaeon Foundation (Chicony Building’s Art Corridor), Grassroots Influence Culture and Education Foundation, Paper Windmill Culture and Education Foundation, Creativity Lecture of National Chengchi University and Chinese Management Development Foundation.
	No
	Yes	
	Assessment Items	2.Does the Company establish a specific unit subject to Board of Directors to promote corporate ethical business and regularly (at least once a year) report the ethical management policy, prevention program of unethical conduct and implementation status of supervision to Board of Directors?.

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	`3.`No Difference
State of Implementation	Summary	2`、`Care for the vulnerable group: Donations to Shuanglian Hospice Center (living allowance for the mentally challenged and the economically disadvantaged), Bereaved Children Foundation, Loyalty Foundation, Academic Foundation for Prevention and Treatment of Liver Disease, National Health Foundation, and Charity Social Welfare Foundation. 3`、`Local giveback: Hualien disaster relief and donation to Hsianse Temple. 4`、`Environmental protection: In response to global climate change and water resources protection, the Company sets up annual energy conservation, carbon reduction goals, and discloses the data of CDP (greenhouse gas emissions) and water resources every year to protect the environment. `3、`The Company has formulated the “Code of Ethical Conduct”, and has stipulated in the “Rules of Procedure of the Board of Directors’ Meeting” and the ”Operation Procedures and Behavior Guidelines for Ethical Corporate Management" that the directors shall exercise a high degree of self-discipline; if a director or the legal person he represents has a personal interest in a proposal discussed in the board of directors’ meeting, he shall explain the important content of his personal interest in the current board of directors’ meeting. If the said interest is harmful to the interests of the Company, the director shall not join in the discussion and voting, and shall withdraw from the discussion and voting sessions; neither shall he exercise voting rights on behalf of other directors.
	No
	Yes	
	Assessment Items	3.Has the Company made policies for the prevention of the conflict of interest, and provided the channels for expressions, and has it properly implemented this system?

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	`4.`No Difference 5.No Difference
State of Implementation	Summary	4`、`The Company has incorporated into the relevant internal control systems the plan for prevention of unethical conducts. The Internal Audit prepares the annual audit plan based on the risk assessment results, and carries out the audit of various internal control systems. If unethical conducts are found, an audit report will be made and submitted to the board of directors. `5、`On the day of new employee registration, the Company will hold a training session for new employees, which includes the Company's ethical corporate management concept. In 2019, the Company also held a lecture "Move Better, Live Longer - Health is the Way to Enjoy Life” to prompt the staff to pay attention to health while working, a lecture on "Flipping the Second Page of Life" to let the staff know how to plan their life after retirement from now on, as well as a lecture on "English Self Study" to let the staff know how to improve their ability in daily life. On the aspect of environmental safety and health, on the day of new employee registration, the Company will let them know the Chicony Building's escape routes and how to operate fire extinguishers. For current employees, the Company provides them with the "Environmental Safety Workshop", "Fire Fighting Training"
	No
	Yes	 
	Assessment Items	4.Does the Company establish effective accounting system and internal control system to implement ethical business and draft relevant audit plans by the internal audit unit based on the risk assessment results of the unethical conduct? Does the compliance of prevention program for the unethical conduct audited accordingly by the audit office or committed accountants? `5.`Periodic education and training of ethical business

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	III. No Difference
State of Implementation	Summary	and "CPR and AED First Aid Training", and holds a fire drill for the building once a year, so that all the staff of the Company and its subsidiaries as well as the tenants can understand the response mode in case of disaster. For common problems encountered in the workplace, the Company has held workshops on time management, work guidance skills, subordinate guidance and motivation, etc. In addition, legal compliance courses are provided to professional personnel in response to the implementation of new laws and regulations. III.The Company has separately set 1. The Company set a direct complaint mailbox of the CEO. 2. “Employee Hotline Management Method” - Establish and improve Company communication with employees through cross-department organizational function and timely handle and feedback of employees' problems and suggestions. 3. “Internal and External Communication Procedures” - The Company set internal and external labor and ethics information of the division of duties and operational procedures of propaganda. 4. “Procedures for Management of Suggestion Boxes” - Establish an operating procedure for on-the-job employees for improvement of proposals, problem reflection, and employee complaints. 5. “Procedures of Employees Grievance Management” - Establishing relevant operating procedures for employees who are unfairly treated by the Company, legal rights violations or disclosure of employee privacy, and other acts that harm the Company.
	No
	Yes	
	Assessment Items	III.The operation of reporting system 1.Specific reporting and reward systems, reporter friendly channels and representative assigned to deal with the reporting issues `2.`Dose the company establish standard procedures for investigating reported cases, and does it take subsequent measures and implement a confidentiality mechanism after complaint investigation?

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	IV.No Difference
State of Implementation	Summary	The above will clearly maintain the identity and content of the report; if it finds or receives an act of dishonesty of the Company's personnel, it will immediately find out the relevant facts, and if the violating personnel can provide related evidence that it has not violated the regulations, a complaint can immediately be made with the Administrative Department. If it is confirmed that there is a violation of relevant laws or the Company's integrity management policies and regulations, the actor will be immediately required to stop the relevant behavior, and appropriate disposal and punishment and damages will be requested through legal proceedings to maintain the Company’s reputation and interests if necessary. IV.The Company has set up a website. The link is http://www.chicony.com.tw. In the investor relationship section, we disclose information about corporate governance and integrity management.
	No
	Yes	
	Assessment Items	3.Measures for protecting whistle- blowers from inappropriate disciplinary actions due to their whistle-blowing. IV.Enhancing Information Disclosure of ethical business principals and implementation results on its website or TWSE “MOPS”

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Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	Difference from Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and reasons	VI.Other information material to the understanding of ethical business operation (e.g., the discussion and amendment to the ethical business best practice principles defined by the Company): In 2019, the Company was re-selected as a constituent of the “FTSE4Good TIP Taiwan ESG Index” of the TAIEX, representing that outsiders recognize the Company responsibilities for sustainable development.	(7) Established Corporate Governance Rules and Related Regulations and How to find the corporate governance rules, related rules and regulations. In order to ensure the consistency and correctness of the Company's published information and strengthen the management of the prevention of internal transactions, and to establish a good internal information processing and disclosure mechanisms of the Company to prevent information leakage, the Company established the “Internal Material Information Processing Operations and Prevention of Internal Transactions Management Procedures”. For details, please refer to the important internal rules of the Company's website http://www.chicony.com.tw/corporate governance. `(8)`Other important information to increase understanding of corporate governance operations`:` The Company website has “CSR Corporate Social Responsibilities” and “Investor Relations” (including corporate governance, financial information, and stock affairs information) and other areas for inquiries.
State of Implementation	Summary
	No
	Yes
	Assessment Items

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(9) Status of Implementation of Internal control system (including statement of internal control and audit report of CPA)
Statement of Internal Control System:

Chicony Electronics CO., Ltd.

Declaration of Internal Control System

Date: 3/10/2020

The Company internal control system for 2019 is based on the results of its own assessment and is stated as follows:

I. The Company’s Board of Directors and management team understand their responsibilities of developing, implementing, and maintaining the Company’s internal control system, and such a system has been established. The purpose of establishing the internal control system is to reasonably assure the following objectives: (a) The effectiveness and efficiency of business operation (including earnings, operation performance, and the safeguard of Company assets); (b) Achieve the reliability, timeliness, transparency, and compliance objectives according to the relevant laws and regulations in order to provide reasonable assurances.
II. Due to the innate limitation in designing a faultless internal control system, this system can only assure that the reasonableness of the above three objectives have been fairly achieved. In addition, the effectiveness of the internal control system can be altered over time due to the change of business environment or situation. Since the Company’s internal control system has included self-examination capabilities, the Company will make immediate corrections when errors are detected.
III. The evaluation of the effectiveness of the internal control system design and implementation is made in accordance with the “Guidelines for the Establishment of Internal Control Systems by Public Companies” (hereafter referred to as “the Guidelines”). The Guidelines are made to examine the following five factors during the management and control process: (1) control environment, (2) risk assessment and response, (3) control activities, (4) information and communication, and (5) supervision. Each factor also includes several items. Details of each factor can be found in the Guidelines.
IV. The Company has examined the effectiveness of each respective factor in the internal control system based on the Guidelines.
V. The examination result indicated that the Company’s internal control system (including subsidiary governance) dated December 31, 2019 has effectively assured that the following objectives have been reasonably achieved during the assessing period: (a) The degree that effectiveness and efficiency of business operation; (b) The reliability of the financial and related reports; (c) The compliance of the relevant laws/regulations and Company policies.
VI. This Statement is a significant part of the Company’s Annual Report and prospectus available to the general public. If it contains false information or omits any material content, the Company is in violation of Article 20, Article 32, Article 171, and Article 174

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set forth in Taiwan’s Security and Exchange Act.

VII. The Company hereby declares that this statement had been approved by the Board of Directors on March 10, 2020. Among the 8 attending Directors, no one raised any objection to the contents of this statement.

Chicony Electronics CO., Ltd.

Chairman: Hsu, Kun-Tai

General Manager: Lu, Chin-Tsung

Authorized Accountant to Audit the Company’s Internal Control System and Disclose the Audit Report Made by Accountants: None

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Implementation Status	Recognize the business report, consolidated financial report and individual financial report of 2018.	The cash dividend per share is approved to be NT$3.8.July 1, 2019 is set as the ex-dividend date, and dividends will be issued on July 19, 2019.	The registration was approved by the competent authority on June 14, 2019, and the matter will be handled in accordance with the amended Articles of Association.	To be handled in accordance with the amendment.	To be handled in accordance with the amendment.	To be handled in accordance with the amendment.	To be handled in accordance with the amendment.	To be handled in accordance with the amendment.	To be handled in accordance with the amendment.	The registration was approved by the competent authority on June 14, 2019.	The restriction is lifted according to the resolution.
Important resolutions	Proposals for acknowledgement of 2018 Business Report and Consolidated Financial Statements and Individual Financial Statements	Acknowledgement of the 2018 Earnings Distribution	Proposal for amendment to the Company’s Articles of Incorporation	Proposal for amendment to the “Rules for Procedure for Shareholders Meetings”	Proposal for amendment to the “Regulations Governing Election of Directors and Supervisors”	Proposal for amendment to the “Procedures for the Acquisition or Disposal of Assets	Proposal for amendment to the “Procedures for Engaging in Derivatives Transactions”	Proposal for amendment to the “Procedures for Loaning of Funds”	Proposal for amendment to the “Regulations Governing Endorsement and Guarantees	Re-election of the 13th term of Directors	Proposal for Release the Prohibition on New Directors from Participation in Competitive Business
NO	1.	2.	3.	4.	5.	6.	7.	8.	9.	10.	11.

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Important Resolutions	I. Report on the Company's Board of Directors performance evaluation in 2018. II. 2019 Shareholder’s Meeting to be held at 9am on June 5, 2019 at the Company is approved. III.The Company's 2018 business report and consolidated and individual financial statements are approved. IV.The nomination period, number of candidates to be elected and the place of accepting nominations for the 13th term of the board of directors (including independent directors). V.The list of eight directors (including three independent directors) nominated by the board of directors for the 13th term of the board of directors is adopted. VI.The proposal to the board of shareholders to lift the non-competition restriction of new directors is approved. VII.As passed in the sixth session of the Remuneration Committee meeting of the third term, provisions of the employees’ remuneration of NT$503,034,142 and the directors’ and supervisors’ remuneration of NT$31,252,334 are to be made. Except that cash is to be paid for the directors’ and supervisors’ remuneration, NT$223,034,146 is proposed to be paid for the employees’ remuneration and new shares at a worth of NT$279,999,996 is proposed to be issued; calculated at the closing price of NT$68 per share on the day before the resolution of the board of directors to issue new shares, a total of 4,117,647 new shares will be issued. VIII.Earnings Distribution Plan of 2018: The Financial Statements of the Company in 2018 audited by CPA. The net profit after taxes is NT$3,590,710,608 which appropriated the Legal Reserve and Special Reserve of NT$359,071,061 and NT$1,244,100,897 according to Company Law or related regulations and plus the adjusted undistributed earnings of NT$4,864,819,916. The total available for distribution is NT$6,852,358,566. It is proposed to distribute cash dividends of NT$2,766,857,979 which is allocated at NT$3.8 per share, and cash dividends are rounded up; fractional dollars are to be included in other revenue. IX.Regular review to assess the independence of the CPA. X.Amendments are made to the Company's “Company’s Articles of Incorporation”, “Rules for Procedure for Board Meetings”, “Rules for Procedure for Shareholders Meetings”, “Regulations Governing Election of Directors and Supervisors”, “Procedures for the Acquisition or Disposal of Assets”, “Procedures for Engaging in Derivatives Transactions”, “Procedures for Loaning of Funds”, “Regulations Governing Endorsement and Guarantees”, "Ethical Corporate Management Best Practice Principles", “Procedures for Ethical Management and Guidelines for Conduct”, “Codes of Ethical Conduct”, "Procedures for Application for Suspension and Resumption of Trading", "Management Procedures for Processing of Material Internal Information and Prevention of Insider Trading", and "Operational Rules for Financial Business between Related Enterprises". XI.The Company's "Standard Operating Procedures for Processing Directors' Requirements" is formulated. XII.To recognize the Company’s 2018 annual payment to the directors, the associate manager level and above, and the accounting director remuneration cases. XIII.Review and approve the 2018 Internal Control System Statement.
Date	March 7, 2019 17th meeting of the 12th Board of Directors

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Important Resolutions	XIV.Amendments are made to the Company's "Ethical Corporate Management Best Practice Principles", "Procedures for Application for Suspension and Resumption of Trading", "Management Procedures for Processing of Material Internal Information and Prevention of Insider Trading", and "Operational Rules for Financial Business between Related Enterprises". XV.The Company's "Standard Operating Procedures for Processing Directors' Requirements" is formulated.	I. Submission of the Company’s consolidated financial statements Q1 of 2019. II. The authorization to the Chairman is approved to invest in the fixed income tax-free bonds of PRP CE1 BC1, Inc. of Chenco Group through Chicony Global Inc. within the US$17 million limit. III. Adopted the application for a new credit line from DBS Bank, and the provision of a letter of commitment to DBS Bank for the subsidiary Chicony Global Inc. IV. Adopted the subsidiary’s formulation of or amendment to its "Procedures for Derivative Transaction Processing", "Procedures for Loans to Others", "Procedures for Acquisition or Disposal of Assets" and "Measures for the Implementation of Endorsements and Guarantees". V.Hikari investment GK, a Japanese second-tier subsidiary of the Company, has completed the sale of the beneficial right of investment property. The Company has no investment and operation plan in Japan at the moment, and will handle the dissolution and liquidation through Hikari. VI. Adopted the sale of the Company's collective residential building in Wuguwang Section, Sanchung District, at a price no lower than the amount in the appraisal report of a professional appraiser, to the Company’s or its affiliated enterprises’ employees or their spouses or children, and the Chairman is fully authorized to deal with the ownership registration, pricing, sale and subsequent matters of the collective housing building. VII. Adopted the lifting of the non-competition restriction on the Company's managers.	(I) Mr. Kun-Tai Hsu is elected as the Chairman in the 13th term of board of directors. (II) Three independent directors, Mr. Yen-Sung Lee, Mr. Ming-Ji Lin and Mr. Jia-Siang Chu, were appointed as audit members to establish the 1st-term Audit Committee in accordance with the law. (III) Three independent directors, Mr. Yen-Sung Lee, Mr. Ming-Ji Lin and Mr. Jia-Siang Chu, were appointed as members of the 4th-term Remuneration Committee, and all the committee members mutually recommended Mr. Ming-Ji Lin as the meeting convener of the 4th-term Remuneration Committee.
Date		May 8, 2019 18th meeting of the 12th Board of Directors	June 5, 2019 1st meeting of the 13th Board of Directors

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Important Resolutions	I.The Company's Consolidated Financial Report for the first half of the year 2018. II. The Company has purchased US$20,000 thousand liability insurance for the duration of one year for the Directors and important employees starting from July 31, 2019 to July 31, 2020. III.Implementation of the report of corporate social responsibility and integrity operating work. IV.Adopted the case of US$9.5 million cash capital increase of the Company for the Thailand subsidiary Chicony Electronics (Thailand) Ltd. V.Adopted the loan cases of NT$1.6 billion to Unikey Electronics Co., Ltd., NT$650 million to Guangsheng investment Co., Ltd., NT$200 million to Chunjing Investment Co., Ltd., and US$20 million to the Thailand subsidiary (CET). VI.Adopted the credit line application with United Overseas Bank of Singapore. VII.Ratified the Company's disposal of the private placement securities of Fuhua Dongda Securities Investment Trust Fund, with a disposal benefit of about NT$103 million. VIII.Ratified the Company's acquisition of the securities of Chicony Power for about NT$300 million. IX.Adopted the revision of the Company's "Measures for Performance Evaluation of the Board of Directors" and its name change to "Measures for Performance Evaluation of the Board of Directors and Functional Committees". X.Adopted the formulation of the "Procedures for Derivative Transaction Processing", "Procedures for Loans to Others" and "Procedures for Acquisition or Disposal of Assets" by the newly established subsidiary Chicony Overseas Hong Kong Limited, and the revision of the "Procedures for Loans to Others" by the subsidiaries Chicony Global Inc., Chicony (Suzhou) Co., Ltd. and Chicony (Chongqing) Co., Ltd.	I.2,786,000 shares of and 3,591,000 shares of the Company were repurchased respectively through the Company’s 10th and 11th treasury share repurchase, and the total of 6,377,000 shares were transferred to the employees of the Company in accordance with the provisions of the “Measures for the Transfer of Shares from the Company’s 10th and 11th Treasury Shares Repurchase to the Employees”. II. Adopted the project budget of the Thailand plant of the Company, and the chairman is authorized to handle the contract awarding, payment terms, contract contents and document signing of various related projects within the limit of no more than NT$790 million for the design, supervision, fees and charges and construction budget.
Date	August 8, 2019 2nd meeting of the 13th Board of Directors	September 27, 2019 3rdmeeting of the 13th Board of Directors

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Important Resolutions	I.The Company's consolidated financial report for the third quarter of 2019. II. Adopted the endorsement of US$6 million to the subsidiary CEZ. III.Reviewed and adopted the proposal of the Company‘s 2nd-session, 4th-term Remuneration Committee meeting on the salary adjustment plan for managers, the evaluation of the 2018 achievement of performance objectives of directors, supervisors and managers against the actual payment of salary and remuneration, and the proposal on the payment of 2019 bonus and employee remuneration to managers. IV. Adopted the phased expansion of sales objects of the Company's collective residential building to employees or their spouses and children of other affiliated enterprises (including Clevo Group, Hongwell Group, Chicony Department Store Group, etc.); if there are still unsold units, they will be opened to the general public for purchase. The sales price of the extended sales object shall not be lower than the price in the appraisal report issued by the professional appraisal company.	I.2019 performance evaluation report of the board of directors and functional committees. II. Planning report for the Company’s improvement in its ability to prepare its own financial report. III.Internal audit business report: 49 audit items listed in the 2019 audit plan were completed, and no significant abnormal design or implementation of the internal control system was found. IV.Adopted the proposal to hold the general shareholders’ meeting of the Company for 2020 at 9:00 a.m. on June 10, 2020. V.Adopted the Company's 2019 business report, consolidated financial report and individual financial report. VI.Adopted the proposal of the 3rd-sesion, 4th-term Remuneration Committee meeting to make a provision of NT$838,112,364 for employees’ remuneration and NT$52,069,960 for directors’ remuneration. Cash will be paid for directors’ remuneration, and it is proposed to pay NT$438,112,377 in cash and issue new shares of NT$399,999, 987 for employees’ remuneration; calculated by the closing price of NT$80.6 per share on the day before the resolution of the board of directors to issue new shares, a total of 4,962,779 new shares will be issued. VII.2019 earnings distribution: According to the Company's 2019 financial statements audited and certified by the independent auditor, there is a net profit of NT$5,838,816,879 after tax. According to the law, the Company shall first provide a legal reserve of NT$583,881,688 and a special reserve of NT$185,423,601; plus the adjusted undistributed earnings of NT$3,531,840,847, the total amount available for distribution is NT$ 8,601,352,437. It is planned to distribute cash dividends of NT$4,362,815,770, at NT$5.9 per share. The unit of cash dividend payment is NT$1 (rounded off below NT$ 1), and the total of the amounts after the decimal point will be included in the Company's other income. VIII.Amendment to the Company's "Procedures for Loans to Others" and "Organizational Procedures of the Audit Committee". IX.Adopted the proposal of regular assessment of the independence of the independent auditor. X.Ratified the Company's 2019 remuneration to directors, managers above the senior manager level and the directors of finance and accounting. XI.Adopted the proposal that Mr. Yuan-Hong Chao, the current deputy director of the Audit Office be promoted to replace Mr. Tzu- Jun Wang, the former audit director of the Company who applied for retirement. XII.Reviewed and adopted the 2019 internal control system statement.	(12) The Main Contents of Important Resolutions Passed by the Board of Directors Regarding in which Directors or Supervisors have
Date	November 7, 2019 4thmeeting of the 13th Board of Directors	March 10, 2020 5th meeting of the 13th Board of Directors

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(13) Summary of Resignation or Dismissal of Personnel (including the Chairman of Board, President, Financial Manager, Accounting
Manager, Internal Audit Manager and R&D Manager, etc.,):

Title
Name
Date of Appointment
Date Discharged
Reasons for
Resignation or
Discharge
Audit Director
Mr. Tzu-Jun Wang
May 1, 2003
March 31, 2020
Retirement
(14) Certification of employees whose jobs are related to the company’s financial information:
The Company's Financial and Administrative Department has three qualification employees for obtaining CPA licenses from the US,
five employees obtaining CPA accountants licenses from the Republic of China, and one employee obtaining the Chinese Certified
Tax Agent (CTA) license.

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Auditing fees for the CPAs :
(I) Auditing fees for the CPAs:

Auditing fees for the CPAs

Unit: NTD1,000

Name of CPA Firm (List and explain the reasons separately when replacing)	Name of CPA	Auditing Fee		Non-auditingFee(note)	Non-auditingFee(note)	Non-auditingFee(note)		Examination Period of the CPA	Remarks Field (specify the content of the service)
			System Design	Industrial and Commercial Registration	Human Resources	Others	Subtotal
PwC Taiwan	Chen, Chin-Chang	7,000	0	150	0	6,524	6,674	1.1.2019 - 12.31.2019	Non-audit Fee Refer to Note
	Weng, Shih-Jung

1.Where the non-audit fees paid to the certified public accountant, the firm to which the certified public accountant belongs and its affiliated enterprises account for more than a quarter of the audit fees, the amount of audit and non-audit fees (as shown in the table above) and the content of non-audit services shall be disclosed as followed:

Business registration NT$150 thousand, Transfer pricing report, special review and country reports NT$4,100 thousand, Audit of direct deduction method for business tax of concurrent business operators NT$200 thousand, and R&D investment deduction counseling NT$2,224 thousand.

2.Altering of the CPA firm and the audit fee in the altering year is less than that in the previous year: None.
3.The audit fee is reduced by over 15% compared with the previous year: None.

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Replacement of the CPA: (Alteration of the CPA of the financial report in the recent two years and up to the date of printing of this Annual Report)

(I) About the Preceding CPA

	2018	2018	2018	2018	2018	2019	2019	2019	2019	2019	From January 1, 2020 to the Date of Printing of this Annual Report	From January 1, 2020 to the Date of Printing of this Annual Report	From January 1, 2020 to the Date of Printing of this Annual Report	From January 1, 2020 to the Date of Printing of this Annual Report	From January 1, 2020 to the Date of Printing of this Annual Report
Date of the Change	3/9/2018					Nil					Nil
Explain the Reason for the Change	Internal adjustment of the PwC Taiwan CPA firm. Since the first quarter of 2018, the company has replaced Chun Yao Lin CPA and Shih Jung Weng CPA with Shih Jung WengCPA and Chin ChangChen CPA.					Nil					Nil
Explain That the Appointor or CPA Terminates or Does ~~n~~ot Accept the Appointment	Contracting Parties Condition			CPA	Appointor	Contracting Parties Condition			CPA	Appointor	Contracting Parties Condition			CPA	Appointor
	Proactive Termination of Appointment			Not Applicable	Not Applicable	Proactive Termination of Appointment			Not Applicable	Not Applicable	Proactive Termination of Appointment			Not Applicable	Not Applicable
	Accept no Longer (Continued) Appointment			Not Applicable	Not Applicable	Accept no Longer (Continued) Appointment			Not Applicable	Not Applicable	Accept no Longer (Continued) Appointment			Not Applicable	Not Applicable
Suggestions and reasons for issuing audit reports other than unqualified opinions in the recent twoyears.		Nil					Nil					Nil
Have Different ~~O~~pinions With ~~I~~ssuers	Yes	Nil	Accounting Principles or Practices			Yes		Accounting Principles or Practices			Yes		Accounting Principles or Practices
			Financial Report Disclosure					Financial Report Disclosure					Financial Report Disclosure
			Audit Scope or Steps					Audit Scope or Steps					Audit Scope or Steps
			Other					Other					Other

	Nil	`Ｖ`				Nil	`Ｖ`				Nil	`Ｖ`
	Explanation: Not Applicable					Explanation: Not Applicable					Explanation: Not Applicable
Other Disclosures (Articles 10, 6, (1, 4), to (1,7) shall be disclosed)	Nil					Nil					Nil

(II) About the Succeeding CPA

	2018	2019	From January 1, 2020 to the Date ofPrinting of this Annual Report
Name of CPA Office	PwC Taiwan	Not Applicable	Not Applicable
Name of CPA	Shih Jung Weng, Chin ChangChen	Not Applicable	Not Applicable
Appointed Date	3/9/2018	Not Applicable	Not Applicable
Prior to appointment, accounting treatments or accounting principles for specific transactions, and possible advisory issues and results for financial reports.	Nil	Not Applicable	Not Applicable
The written opinion of the different opinions between the succeeding CPA and the preceding CPA.	Nil	Not Applicable	Not Applicable

(III) Reply of the preceding CPA to the provisions of Article 10, Paragraph 6, Item 1 and Items 2 .3: None
The Company’s Chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its CPA or at an affiliated enterprise: None

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The transfer of equity shares or change in the pledge of shares under lien by the Directors, Supervisors, Managers, and shareholders holding more than 10% of the shares:
(I) The difference of shareholding changes between directors, supervisors, managers, and major shareholders holding more than 10% of shares:

Occupational Title	Name	2019	2019	From January 1 to April 12,2020	From January 1 to April 12,2020
		Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity	Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity
Chairman	Hsu, Kun-Tai	(20,000,00 0)	-	-	-
Director and General Manager	Lu,Chin-Chung (Note 1)	106,659	-	646,671	-
Director	Li,Cih-Jing (Note 2)	-	-	-	-
Director	Tsai,Ming-Hsien	-	-	-	-
Director	Dong Ling Investment Co., Ltd. Legal Representative: Liu, Chia-Sheng	-	-	-	-
Independent Director	Lee,Yen-Sung	-	-	-	-
Independent Director	Lin,Ming-Ji	-	-	-	-
Independent Director	Chu,Jia-Siang(Note 2)	-	-	-	-
General Manager of Chicony America Corporation	Chang, Yao-Ching (Note 1)	(41,000)	-	(15,281)	-
Special Assistant	Chen,Shao-Lung (Note 1)	(60,901)	-	30,477	-
General Manager of the IPD Business Unit	Huang, Chien-Yu (Note 1)	60,311	-	163,994	-
General Manager of the CM Business Unit	Tung, Yen-Liang (Note 1)	30,656	-	43,947	-
General Manager of the AE Business Unit	Cheng, Wei-Hao (Note 2,3)	162,495	-	39,670	-
General Manager of the Business Unit of the SubsidiaryCompany	Chou, Yung-Chang (Note 2)	(13,925)	-	52,800	-
Acting General Manager of the MKB Business Unit	Tsai, Chin-Cheng (Note 2)	(88,420)	-	105,378	-
Acting General Manager of the MKB Business Unit	Hsu, Chieh-Hsiang (Notes 3)	59,750	-	46,656	-
ActingGeneral Manager of VIPs	Tsai,Mei-I(Note 1)	18,625	-	75,512	-
Vice General Manager of the CM Business Division	Li, Pei-Jan (Note 1)	51,783	-	35,217	-
Vice General Manager of the New Product Development Center	Huang, Kuang-Yu (Note 1)	50,466	-	29,287	-
Chief PurchasingOfficer	Chang,Chao-Hsien(Note 1)	(113,877)	-	87,324	-
Vice General Manager of Financial and Administrative Department	Lin, Yu-Ling(Note 1)	(79,000)	-	0	-
Vice General Manager of the IPD Business Division	Tu, Ku-Chin(Note 1)	31,350	-	2,080	-
Acting Vice General Manager of the Automation EngineeringCenter	Tseng, Chin-Cheng (Note 1)	18,053	-	39,812	-
Assistant General Manager of the Overseas Business Management Division	Chang, Ting-Shan (Note 1)	(24,173)	-	26,693	-
Assistant General Manager of the MKB Development Division	Chen, Tsung-Min (Note 1)	47,156	-	43,059	-

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Occupational Title	Name	2019	2019	From January 1 to April 12,2020	From January 1 to April 12,2020
		Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity	Change in Quantity of Shareholding	Change in Pledge of Shares by Quantity
Assistant General Manager of MKB PM	Yang, Ching-Wu (Note 1)	(12,002)	-	5,339	-
Chief Information Officer	Chang,Yu-Yun(Note 1)	51,615	-	38,798	-
Chief Human Resources Officer	Hsiao,Huan-Wen(Note 1)	26,592	-	64,769	-
Special Assistant	Chen,Chiu-Mei(Note 1)	25,208	-	48,554	-
Assistant General Manager of the SubsidiaryCompany	Juan, Yun-Chu (Note 1)	(4,798)	-	26,851	-
Deputy Director of the Audit Division	Chao, Yuan-Hung(Note 4)	-	-	7,293	-

Note 1: The number of shares held by individuals includes the number of retained discretion over use of trust shares.
Note 2: Ms. Li, Cih-Jing and Mr. Chu, Jia-Siang took office on June 5, 2019, so the difference in the above table is from June 5, 2019 to December 31, 2019.
Note 3: Hsu, Chieh-Hsiang took office on February 1, 2019, so the difference in the above table is from February 1, 2019 to December 31, 2019.
Note 4: Mr. Chao, Yuan-Hung took office on April 1, 2020, so the difference in the above table is from April 1, 2020 to April 8, 2020.

(II) The counterparties of equity transfer are related parties:

Name (Note 1)	Reason for Transfer of Shares (Note 2)	Transaction Date	Counterparties of Transactions	Relation between the counterparties of transactions and the Company, Directors, Supervisors, and shareholders holding more than 10% of the shares issued bythe Company.	Quantity of Shares	Transaction Price
Chuang, Ting Shan	Gift	December 16,2019	Huang, Hsiu-Ying	Couple	42,000	Not Applicable
Chen, Shao-Lung	Gift	March 9, 2020	Chen, Yun-Tieh	Father and Daughter	26,000	Not Applicable

Note: Fill in the names of the Directors, Supervisors, Managers, and shareholders of the Company holding more than 10% of the shares issued by the Company.
(III) The counterparties of share pledges are related parties: None

The counterparties of share pledges are not related parties, so it is not needed to list the related information.

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8. Information on relationships among the top ten shareholders:

4/12/2020 Units: share; %

Name	In Person Quantity of Shareholding (note 1)	In Person Quantity of Shareholding (note 1)	Shares Held by Spouse and/or Children who are Minors	Shares Held by Spouse and/or Children who are Minors	Total Shareholding of Shares in the Name of a Third Party	Total Shareholding of Shares in the Name of a Third Party	The titles or names and relations of the top 10 Shareholders who are related parties or spouses, or kindred within the 2nd tier under the Civil Code to one another:	The titles or names and relations of the top 10 Shareholders who are related parties or spouses, or kindred within the 2nd tier under the Civil Code to one another:	Remarks
	Quantity of Shares	Proportion of Shareholding % (Note 2)	Quantity of Shares	Proportion of Shareholding % (Note 2)	Quantity of Shares	Proportion of Shareholding % (Note 2)	Title or name	Relation
Hsu, Kun-Tai	61,615,782	8.33	4,021,401	0.54	-	-	Unikey Electronics Co., Ltd. Hongwell Co., Ltd. Hipro Electronics CO., LTD. Dong Ling Investment Co., Ltd. Ching Yuan Investment Co.,Ltd.	Director of the Legal Representative of the Company Chairman of the Company Chairman (Legal Representative) of the Company Chairman of the Company Chairman of the Company	※
Unikey Electronics Co., Ltd.	21,174,298	2.86	-	-	-	-		The Company invests 100% of the investment company.
							Hsu, Kun-Tai	Director of the Legal Representative of the Company
Principal: Lu, Chin- Chung							Hipro Electronics CO., LTD.	Director of the Legal Representative of the Company
Yuanta Taiwan High Dividend Fund Account	20,542,264	2.78
Citibank (Taiwan) Commercial Bank Hosting Government of Singapore Investment Account	18,651,854	2.52	-	-	-	-	-	-
Hongwell Co., Ltd.	17,591,340	2.38	-	-	-	-	Hsu, Kun-Tai Hipro Electronics CO., LTD. Dong Ling Investment Co., Ltd. Ching Yuan Investment Co.,Ltd.	Chairman of the Company The Chairman is the same person The Chairman is the same person The Chairman is the same person
Principal: Kun Tai Hsu							As above	As above	※
Hipro Electronics CO., LTD.	16,188,935	2.19	-	-	-	-	Hsu, Kun-Tai Hongwell CO., LTD. Dong Ling Investment Co., Ltd.	The Company invests 100% of the investment company. Chairman of the Company (Legal Representative) The Chairman is the same person The Chairman is the same person

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							Ching Yuan Investment Co.,Ltd.	The Chairman is the same person
Principal: Kun Tai Hsu							As above	As above	※
JP Morgan Commercial Bank Taipei Branch Hosting Robeco Capital Growth Fund Investment Account	11,934,914	1.61
Dong Ling Investment Co., Ltd. Principal: Hsu,Kun Tai	11,171,329	1.51	-	-	-	-	Hsu, Kun-Tai Hongwell Co., Ltd. Hipro Electronics CO., LTD. Ching Yuan Investment Co., Ltd. As above	Chairman of the Company The Chairman is the same person The Chairman is the same person The Chairman is the same person As above	※
JP Morgan Commercial Bank Hosting Vanguard Total International Stock Index Fund Account	11,000,280	1.49	-	-	-	-	-	-
Ching Yuan Investment Co., Ltd. Principal: Hsu, Kun Tai	10,908,945	1.48	-	-	-	-	Hsu, Kun-Tai Hongwell Co., Ltd. Hipro Electronics CO., LTD. Dong Ling Investment Co., Ltd. As above	Chairman of the Company The Chairman is the same person The Chairman is the same person The Chairman is the same person As above	※

Note 1: The shares held in this table do not include the person or the spouse retained discretion over use of trust shares.

Note 2: The shareholding ratio is Shareholding shares/Outstanding shares 739,460,300 shares.

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Investment by directors, supervisors, manager, groups of direct or indirect control in the investment business, and to calculate the combined shareholding percentage:

3/31/2020 Units: share; %

Shift in Investment	Investment by the Company	Investment by the Company	Investment by the Directors, Supervisors, Managers, or investee Company with direct or indirect control.(Note 2)	Investment by the Directors, Supervisors, Managers, or investee Company with direct or indirect control.(Note 2)	Combined Investment	Combined Investment
	Quantity of Shares	Proportion of Shareholding %	Quantity of Shares	Proportion of Shareholding %	Quantity of Shares	Proportion of Shareholding %
Chicony Overseas Inc.	1,000	100	-	-	1,000	100
Chicony Global Inc.	1,000,000	100	-	-	1,000,000	100
Chicony Electronics (Thailand)Co.,Ltd.	4,323,377	70.73	1,789,148	29.27	6,112,525	100
Chicony Power Technology Co. Ltd.(Note 2)	197,123,594	50.71	11,049,685	2.84	208,173,279	53.55
Hipro Overseas (BVI) Inc.	12,560,000	100	-	-	12,560,000	100
Hipro Electronics CO., LTD.	4,660,000	100	-	-	4,660,000	100
Unikey Electronics Co., Ltd.	90,000,000	100	-	-	90,000,000	100
XAVi Technologies Corporation(Note 3)	45,836,823	46.14	8,824,318	8.88	54,661,141	55.02

Note 1: The Company adopts the equity method of investment.

Note 2: The book closure date of Chicony Power Co., Ltd, was April 11, 2020.

Note 3: The book closure date of XAVi Technologies Corporation was April 10, 2020.

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IV. Status of financing

Capital and Shares
(1) Sources of Equity Capital

Unit: Share/NTD$

						Unit: Share/NTD$	Unit: Share/NTD$	Unit: Share/NTD$	Unit: Share/NTD$	Unit: Share/NTD$	Unit: Share/NTD$
		Authorized Capital		Paid-in Capital		Remarks
						Sources of EquityCapital				The use of
YYYYMM	Offering Price					Raising	Capital Increase by	Capitalization of Additional		assets other than	h
		Quantity of Shares	Amount	Quantity of Shares	Amount	New capital	Earnings or Remuneration of Employees	Paid-in Capital Into New Shares	Total	cash for equity investment	Oter
June 2012	10	700,000,000	7,000,000,000	675,778,209	6,757,782,090	-	31,334,619	-	31,334,619	Nil	Note 1
June 2013	10	700,000,000	7,000,000,000	686,721,614	6,867,216,140	-	10,943,405	-	10,943,405	Nil	Note 2
June 2014	10	700,000,000	7,000,000,000	694,865,413	6,948,654,130	-	8,143,799	-	8,143,799	Nil	Note 3
July2015	10	800,000,000	8,000,000,000	703,810,114	7,038,101,140	-	8,944,701	-	8,944,701	Nil	Note 4
August 2016	10	800,000,000	8,000,000,000	712,082,016	7,120,820,160	-	8,271,902	-	8,271,902	Nil	Note 5
April 2017	10	800,000,000	8,000,000,000	717,033,872	7,170,338,720	-	4,951,856	-	4,951,856	Nil	Note 6
August 2017	10	800,000,000	8,000,000,000	720,605,112	7,206,051,120	-	3,571,240	-	3,571,240	Nil	Note 7
April 2018	10	800,000,000	8,000,000,000	726,760,003	7,267,600,030	-	6,154,891	-	6,154,891	Nil	Note 8
August 2018	10	800,000,000	8,000,000,000	730,379,874	7,303,798,740	-	3,619,871	-	3,619,871	Nil	Note 9
April 2019	10	800,000,000	8,000,000,000	734,497,521	7,344,975,210		4,117,647	-	4,117,647	Nil	Note 10
April 2020	10	800,000,000	8,000,000,000	739,460,300	7,394,603,000		4,962,779	-	4,962,779	Nil	Note 11
Note 1: The Financial Supervisory Commission (FSC) approved JGZFZ No. 1010027651 on June 22, 2012. Note 2: The Financial Supervisory Commission (FSC) approved JGZFZ No. 1020024198 on June 21, 2013. Note 3: The Financial Supervisory Commission (FSC) approved JGZFZ No. 1030023361 on June 19, 2014. Note 4: The Financial Supervisory Commission (FSC) approved JGZFZ No. 1040027783 on July 22, 2015.

Note 5: The Ministry of Economic Affairs approved Letter Jing-Shou-Shang-Zi No. 10501189550 on August 11, 2016.
Note 6: The Ministry of Economic Affairs approved Letter Jing-Shou-Shang-Zi No. 10601052890 on April 28, 2017.
Note 7: The Ministry of Economic Affairs approved Letter Jing-Shou-Shang-Zi No. 10601109560 on August 4, 2017.
Note 8: The Ministry of Economic Affairs approved Letter Jing-Shou-Shang-Zi No. 10701041640 on April 25, 2018.
Note 9: The Ministry of Economic Affairs approved Letter Jing-Shou-Shang-Zi No. 10701097250 on August 8, 2018.
Note 10: The Ministry of Economic Affairs Letter Jing-Shou-Shang-Zi No. 10801045710 on April 24, 2019. Note 11: The Ministry of Economic Affairs Letter Jing-Shou-Shang-Zi No. 10901060730 on April 21, 2020.

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4/12/2020

Units: share

4/12/2020				Units: share
Type of Shares	Authorized Capital Stock			Remarks
	Outstanding Shares (note)	Unissued Shares	Total
Common Shares	739,460,300	60,539,700	800,000,000	Shares are Listed on the TWSE

Information on Shelf Registration System: None.

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4/12/2020

(2) Structure of shareholders

							4/12/2020
Shareholder Structure Quantity	Government Agencies	Financial Institutions	Other Institutional Shareholders	Foreign Institutional Shareholders and Individuals	Individuals	Treasury Stock	Total
Number of Persons	1	27	130	848	21,167	0	22,173
Shareholding number	115	30,453,884	149,829,466	376,766,024	182,410,811	0	739,460,300
Proportion of Shareholding (note 1)	0.00%	4.12%	20.26%	50.95%	24.67%	0.00%	100.00%

Note 1: The shareholding ratio is Shareholding shares/Outstanding shares 739,460,300 shares.

Note 2: Companies listed on the TWSE (TPEx) and emerging stock market for the first time should disclose the proportion of capital from Mainland China in shareholding: Capital from Mainland China refers to companies invested in by the people, institutions, organizations, other institutions, or in a third region as stated in Article 3 of the Measures Governing Investment Permit to the People of the Mainland Area: The Company Not Applicable.

(3) Dispersion of equity shares

4/12/2020

Applicable. ) Dispersion of equity shares			4/12/2020
Shareholding Along the Scale of Share Quantity	Number of Shareholders	Shareholding number	Proportion of Shareholding (%)
1 to 999	9,673	1,315,975	0.18%
1,000 to 5,000	8,998	17,277,301	2.34%
5,001 to 10,000	1,324	9,444,495	1.28%
10,001 to 15,000	524	6,340,672	0.86%
15,001 to 20,000	304	5,364,982	0.73%
20,001 to 30,000	272	6,647,005	0.90%
30,001 to 40,000	150	5,211,241	0.70%
40,001 to 50,000	106	4,752,048	0.64%
50,001 to 100,000	245	17,558,286	2.37%
100,001 to 200,000	184	26,194,855	3.54%
200,001 to 400,000	141	39,636,447	5.36%
400,001 to 600,000	72	35,879,897	4.85%
600,001 to 800,000	34	23,759,462	3.21%
800,001 to 1,000,000	21	18,936,203	2.56%
More than NT$ 1,000,001	125	521,141,431	70.48%
Total	22,173	739,460,300	100.00%

Note: The shareholding ratio is equal to the number of holding shares/the total number of issued shares 739,460,300 shares.

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(4) List of Major Shareholders: Holding more than 5% of the total shares or shareholders among the top 10 by shareholding ratio.

the top 10 by shareholding ratio.	the top 10 by shareholding ratio.
		4/12/2020
Shares Names of Dominant Shareholders	Shareholding number (note 2)	Proportion of Shareholding (%) (Note 1)
Hsu,Kun-Tai	61,615,782	8.33%
UnikeyElectronics Co.,Ltd.	21,174,298	2.86%
Yuanta Taiwan High Dividend Fund Account	20,542,264	2.78%
Citibank (Taiwan) Commercial Bank Hosting Government of Singapore Investment Account	18,651,854	2.52%
Hongwell Co.,Ltd.	17,591,340	2.38%
Hipro Electronics CO.,LTD.	16,188,935	2.19%
JP Morgan Commercial Bank Taipei Branch Hosting Robeco Capital Growth Fund Investment Account	11,934,914	1.61%
DongLingInvestment Co.,Ltd.	11,171,329	1.51%
JP Morgan Commercial Bank Hosting Vanguard Total International Stock Index Fund Account	11,000,280	1.49%
ChingYuan Investment Co.,Ltd.	10,908,945	1.48%

Note 1: The shareholding ratio is equal to the number of holding shares/the total number of issued shares 739,460,300 shares.

Note 2: The table does not include retained discretion over use of trust shares.

(5) Market price, net value, earnings, and dividends per share and related information:

Item	Year	Year	2018	2019	1.1.2020 to 3.31.2020
Market Price per Share	High		77.50	100.50	71.90
	Low		52.80	62.40	62.40
	Average		68.02	80.34	68.10
Net Value per Share	Cum-dividend		35.07	39.11	38.18
	Ex-dividend		31.27	33.21	Note 4
Earnings per Share	Weighted Average of Outstanding Shares(thousand shares)		688,299	691,107	687,783
	Earnings per Share	Before Adjustment	5.22	8.45	2.39
		After Adjustment	5.22	8.45	Note 4
Dividend per Share	Cash Dividend(Note 4)		3.80	5.90	Note 4
	Stock Dividend	Stock Dividend from Capitalization of Retained Earnings	0	0	Note 4
		Stock Dividend from Capitalization of Additional Paid-in Capital	0	0	Note 4
	Accumulated Undistributed Dividend (no issuance of equitysecurities)		0	0	Note 4
Analysis of ROI	P/E Ratio(Note 1)		13.04	9.51	N/A
	P/P Ratio(Note 2)		17.90	13.62	Note 4
	Cash Dividend Yield(Note 3)		5.59%	7.34%	Note 4

Note 1: P/E Ratio = The average closing price per share of the year/earnings per share (before

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adjustment).

Note 2: P/P Ratio = The average closing price per share of the year/cash dividend per share.
Note 3: Cash Dividend Yield = Cash dividend per share/the average closing price per share of the year.
Note 4: The distribution of cash dividend was resolved by the board meeting; in the first quarter of 2020, there was no resolution in the Board Meeting or Shareholders Meeting.
(6) Dividend Policy and Distribution of Stock Dividends at This Shareholders’ Meeting:
Dividend Policy:

To match the long-term financial planning of the Company and the target of sustainable management, Article 19 of the Articles of Incorporation specifies the future dividend policy as follows:

“The Company is currently at the development period of the electronic industry, so the dividend policy shall meet the goals of meeting the fund demand for new products and increasing the return on investment of shareholders. Therefore, the total dividend distributed shall not be higher than 90% of total earnings that is distributable as shareholders’ dividends, and the cash dividend shall not be less than 10 % of total amount of distributed dividends.

Where the par value of distributable dividends is less than $0.5 per share, it shall be exempted from the preceding paragraph.”

Allocation of Dividends Proposed at the Shareholders’ Meeting ：

According to Company’s Articles of Incorporation, the Board approved to pay cash dividend of NT$5.9 per share, a total of 4,362,815,770 from undistributed earnings.

Note to anticipated significant change in the dividend policy: Not Applicable.
(7) The effect of the proposal for paying stock dividends in the current session of the Shareholders Meeting on the operation performance, and earnings per share of the Company:

This Shareholders Meeting did not make capital increase by earnings to issue new shares, so it is not applicable.

(8) Remuneration to the employees, Directors, and Supervisors:
The distribution was made in accordance with Article 18 of the Company’s Article of Incorporation “The Company shall distribute no less than 11% of current pre-tax earnings before deducting the employee compensation and Directors and Supervisors’ remuneration as the employee compensation and no more than 1% of such earnings as the remuneration for Directors and Supervisors. When the Company has accumulated losses (including adjusted retained earnings), the profits shall be used to offset accumulated losses first, and then the balance of which may be allocated to employees and Directors and supervisors in accordance with the aforesaid percentage.” The board of directors shall make a resolution on the distribution of employees’ remuneration and directors’ remuneration, and submit a report to the shareholders' meeting.
The Company earned NT$7,141,923,896 in 2019. After deliberation of the 3rd Session of the 4th Remuneration Committee and the 5th Session of the 13th Board of Directors on March 10, 2020, employee remuneration of NT$838,112,364 (11.74%) and director remuneration NT$52,069,960 (0.73%) was paid. The employee's remuneration is intended to be issued in cash of NT$438,112,377 and new shares of NT$399,999,987.( The calculated price was NT$80.6 per share, the closing price the day before the new shares being issued by the Board of Directors, and a total of 4,962,779 new shares were issued.)

The Board of Directors plans to pay NT$890,182,324 to employees, directors, and

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supervisors as remuneration, which is the same as the estimated amount of the Financial Report in 2019; After considering the payment for employees and directors as remuneration, the calculated earnings per share is NT$ 8.45.

The Remuneration Committee of the Company regularly reviews the performance targets of the directors, supervisors, and managers based on Article 7 of the “Registration Rules of the Remuneration Committee” and sets the content and amount of its individual remuneration. In the 2019 Financial Statement audited by the CPA, revenue grew 6%, and net income grew 63%. After a comprehensive evaluation on the performance of revenue growth, profitability, actual payment to the directors and supervisors, peer performance comparison, and salary levels in 2019, the remuneration to directors and supervisors are not unreasonable.

In 2019, the actual remuneration paid to the directors, supervisors, and employees of annual earnings distribution in 2018 was as follows:
- (1) The actual remuneration of the directors and supervisors was NT$31,252,334, and the remuneration of employees was NT$503,034,142, which was the same as the distribution passed by the Board of Directors originally. Among the remuneration to employees, the amount issued in shares was NT$279,999,996, and 4,117,647 new shares were issued. The cash amount was NT$223,034,146, which was distributed to employees and employees of the companies whose shares are held by the Company by more than 50%.
(2) The Shareholders Meeting resolved to pay NT$534,286,476 as remuneration to employees, directors, and supervisors, which is the same as the estimated amount in the Financial Report in 2018.
(9) The repurchase of Company shares by the Company:
Implemented

1.Implemented
Buybackperiod	The10th	The11th
Purpose of repurchase	Transfer shares to employees	Transfer shares to employees
Buyback period	November 11, 2016`～` December 30, 2016	September 25, 2018`～` November 13, 2018
Buy back price interval	71.83~74.89	54.40~61.68
Type and number of shares bought back	2,786,000 common shares	3,591,000 common shares
Amountofshares boughtback	NT$205,887,312	NT$211,419,429
Ratio of bought back quantity to scheduled bought back quantity (%)	27.86%	35.91%
Number of shares cancelled and transferred	2,786,000 shares have been transferred	3,591,000 shares have been transferred
Accumulated number of shares of the Company held	0 share	0 share
Ratio of cumulative holding of shares in the Company to total number of issued shares (%)	0%	0%

Note: The above-mentioned shares of the Company have been transferred to the employees of the Company in accordance with the provisions of the “Measures for the Transfer of Shares from the Company’s 10th and 11th Treasury Shares Repurchase to the Employees” on October 30, 2019 for a total of 6,377,000 shares.

Under implementation: No such situation.

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Information of Corporate Bonds: None
Information of Preferred Shares: None
Issuance of Overseas Depository Receipts: None
Issuance of ESO: None
Issuance of New Restricted Stocks: None
Merger and Acquisition, or Acceptance of Shares From Assignment of Other Issuers: None
The implementation of the fund utilization plan:
(I) Up to March 31, 2020, the previous issue or private placement of securities that has not yet been completed or has already been completed in the most recent three years and the plan benefits have not yet appeared: None
(II) Analysis of the Implementation of the Plans for the Previous Items and Comparison to the Original Expected Benefits: None

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V. Operational Highlights

Business Overview
(1) Business Scope
1. Major Content of Business Activities:
  - (1) Design, development, manufacturing, and trading of input device products such as desktop keyboards, portable computer keyboards, mice, and computer cameras.
  - (2) Design, development, manufacturing, and trading of digital imaging products such as digital cameras, notebook computer built-in camera modules, mobile phone camera modules, and sports digital cameras.
  - (3) Sales for the proxy of domestic and foreign manufacturers of projectors, large image output machines, driving recorders, security control, and other technology product and consumer products.
  - (4) Switching power supply, research and development, manufacturing, and trading of various electronic components and equipment, lighting, and intelligent building system business.
  - (5) Smart Home and Networking products.
2. Operational Proportion: 2019 Unit: NTD 1,000

Product Items	Amount	Product Proportion %
Electronic Parts and Components	45,659,986	49.33
Consumer and Other Electronic Products	46,015,236	49.72
Others	877,103	0.95
Total	92,552,325	100.00

Current Products and Services
(1) Desk Top PC Keyboard, Gaming Keyboard, Ergonomic Keyboard, and Analog Gaming Keyboard
(2) Programmable Keyboard, Smart Card Keyboard, Biometric Input Keyboard and Mouse
(3) Wireless Portable Bluetooth iPad, Tablet PC Keyboard, Wireless Portable Bluetooth Phone Keyboard
(4) Mechanical/ Bluetooth Dual Mode Wired/Wireless Multi-Color LED Backlight Keyboard and Mouse
(5) Wireless Keyboard/Mouse and Wireless Charging Mouse Pad
(6) Tablet leather case keyboard set
(7) 2.4G Touch/Optical/Laser Mouse
(8) Multifunctional and Colorful Game Mouse Pad
(9) Low Energy Notebook Keyboard, Antibacterial Medical Notebook Keyboard , Backlight Notebook Keyboard
(10) Wireless Portable Bluetooth iPad, Tablet PC Keyboard, Wireless Portable Bluetooth Phone Keyboard
(11) Multi-function Notebook Keyboard Combined with Network and Communication
(12) Tracker Multi-function Pedometer
(13) NFC TAG Bluetooth Matching Module
(14) Stylus Pen, Magnetic Digital Board

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(15) Digital Camera, Webcam
(16) Wi-Fi Sports Digital Camera/ Pet Feeder
(17) Wi-Fi IP Cam Digital Wireless Camera/Floodlight Surveillance Cam/ Doorbell Cam
(18) Wireless Driving Recorder, 360 Degree Panoramic Camera, Drone Camera Wireless Camera
(19) Optical Anti-shake Mobile Phone Camera Module, Autofocus Camera Module
(20) Notebook Camera built-in Module (incl. narrow border products), Tablet PC built-in Camera Module
(21) LCD Monitor Camera Module, Video Image Camera Module, 3D Image Module
(22) UAV Dedicated Image Module, Game Console Dedicated Image Module
(23) Power Supply and LED Light Products:
A. Desktop PC Power Supply: To meet the international energy-saving requirements for multi- and single-output power supply and provide PC and workstation power, and provide miniaturization for All in One systems.
B. E-sports Personal Computer Power: Built-in, 150W - 850W.
C. Game Console Power Supply: To provide the internal/external power supply for new generation game consoles, and support the power supply for game console accessories in three dimensions.
D. Notebook Computer Power Supply: The type includes 30W to 200W products and to provide power for different sizes of notebooks (10 inches to 15 inches standard notebooks), and 150W to 500W power to provide for e-sports.
E. Set-top Box Power Supply: To provide network-on-box power to the network or program provider.
F. Cloud Server Power System: 500W-2000W power system.
- (A) Communication Power: To provide small power supply for routers, networks, and HUBs, and hundreds of watts of corporate central network power.
- (B) Server Modular Design Power Supply: To provide ultra-high-power density modular design 500W/800W/1000W/1200W/1600W/2000W CRPS standard power supply module, and support from low-level to highlevel AI server and ultra-large cloud data center (N+1/N+N) redundant power system.
- (C) Storage Device Power: High-reliability (N+1/N+N) redundant power supply can determine any situation of power failure or power supply damage and it still can operate in any situation.
G. Laser Printer Power Supply: It can provide the 110W and 400W power modules and 72W (combo) for laser printers and laser engine drivers.
H. Inkjet Printer Power Supply: It can provide built-in power supply from 10W to 60W.
I. Internet of Things (IOT): Power supply with accessory host.
J. Battery Charging Device: To provide power supply and charging for machine tools, drones, and mobile devices.
K. Power Supply for Smart Home Devices: The adapter and open frame provide two types from 5W to 60W and use the related applications that include smart speakers, smart doorbells, smart temperature controllers and smoke detectors,

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smart monitoring systems and security systems, smart switches and sockets, and smart makeup mirrors.

  - L. Intranet PoE Power supply `：` 50W to 1000W system internal power.

  - M.  LED Vehicle Lighting and Modules: To provide and cooperate with the original car factory to design and develop various types of interior and exterior lighting, and also provide design and production of various LED lighting modules.

  - N.  Smart Building System: To provide an intelligent building integration management platform, intelligent computing logic controller, wireless control module, wireless channel, environment sensor, and mobile device APP.

  - O. Environmental Control Integrated System: To provide system control host, wireless control module, environment sensor, wireless finder, and mobile device App.

  - P. Energy management system: Provide the system control unit, wired/wireless smart meter, mobile device App.

  - Q. Image Recognition System: To provide image recognition software such as facial recognition, personnel tracking, regional alert, and license plate recognition.

  - R. To provide intelligent building system engineering consulting, planning, design, system integration, procurement, construction, and maintenance operations.

New Products to be developed
(1) Bluetooth Folding Ultra-thin Keyboard, Water-proof, and Dust-proof Keyboard
(2) Contactless (NFC) inductive card reading commercial wireless keyboard
(3) Special keyboard for wireless entertainment SVOD
(4) Wi-Fi Gaming Keyboard, Mouse, Mouse Pad
(5) Super Thin/ Commercial Portable Mouse
(6) Portable Gaming Keyboard/Controller
(7) Special keyboard, mouse and controller for cloud game platform
(8) Smart Internet TV Remote Control (with voice input and output)
(9) IOT and Smart Home Controller
(10) AR/VR/MR Somatosensory Remote Control
(11) High Power Charger
(12) Multi-Function Charger
(13) Smartphone Gaming Board
(14) Briefing pen with the ability of synchronous display of notes
(15) Convertible Icon Type Notebook Keyboard , Touch Computer Keyboard, Water-proof Mechanical Keyboard
(16) MPP 2.0 Stylus
(17) Internet of Vehicle Wireless AI Smart Driving Recorder
(18) 4G LTE IP Cam and Driving Recorder
(19) With advanced driving assistance system (ADAS) tachograph
(20) Wireless IP Cam with IOT Sensor
(21) Live IP CAM with Wi-Fi
(22) Smart Doorbell Cam, Long distance low power transmission camera, Floodlight super wide angle camera
(23) Medical Endoscope Camera Module, Doorbell video camera module

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  - (24) Home smart camera, Intelligent video camera with lamp

  - (25) AGV Camera, Small wireless battery powered IP cam, 180 degree Live-Stream Camera

  - (26) Power Supply and LED Light Source Products:

     - A. Power supply for desktop PCs and workstation: Continuously provide platinum highly efficient models and miniaturized highly efficient All in One power supplies. At the same time, with the new ErP regulations, the development of titanium high-efficiency power supply models.

     - B. Power supply for gaming consoles: Develop high power and miniaturized power supplies over 200W with high switching frequency for new generation gaming console products.

     - C. Power supply for notebook PCs: Power supplies with ultra-low standby power consumption (approximately 20mW), and ultra-thin or ultra-compact multifunction power supplies. They use the-state-of-the-art architecture and parts. (ACF+GaN) The new USB Type C PD adapter with a variable output for more than 100W.

     - D.  5G uses the telecom IT infrastructure power system: 500 ~ 1300W Series provide support for OTII (Open Telecom IT Infrastructure) high-temperature and high-humidity server room power system.

     - E. High-end AI servers and hyper-scale cloud data center power system: The 3000 ~ 4400W high power density modular design power module provides support for high-end AI servers and hyper-scale cloud data center (N+1/N+N) redundant power supply system.

     - F. Power supply for IoT devices.

     - G.  Various battery charging devices for high-end drone charging stations, chargers for electric motorcycles, and electric bicycle charger.

     - H.  Embedded power supply for industrial panel PC: Provide the Industry 4.0 automatic panel PC system with 50W-450W power available for edge computing.

     - I. Power supply for personal gaming computer: Provide platinum ATX 80 PLUS internal power supply which has high power density and full digitalization with multiple sets of output and variable voltage.

     - J. Standard power supply rack and power module for the Open Compute Project of the information center: 18KW to 36KW power supply rack embedded with N+1 redundant power supply system.

     - K. High efficiency fanless PoE power supply with natural cooling.

     - L. Development of the LED adaptive driving beam module and laser high beam module.

     - M.  Smart heating, ventilation and air conditioning system: Provide a resolution for smart air handling unit, integrated equipment of wind turbine, smart air handling unit controller, various types of sensors and APPs for mobile devices. Desktop PC Power Supply: Continuously providing high-efficiency models of the Platinum brand and miniaturized and efficient All in One power supply.

(2) Industry Overview
(1) The Outlook:

The Company's main products are keyboard applications (NB, DT, tablet plugin, etc.), image related products (NB lens module, motion camera, IP cam, driving recorder, etc.), power supply related products (PC, NB, server, game console, etc.).The Company's product lines in PC, NB keyboard and motion camera are all

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leading in the world, and its subsidiary Chicony Power Technology is also the world's largest NB power plant. On the keyboard part, the PC market enjoyed an increase in shipment due to the replacement of computers by large enterprises last year to upgrade to Windows 10 OS. In addition, the trade war between China and the United States prompted manufacturers to prepare goods ahead of time, thus offsetting the falling consumer market which was hit by smart phones. Furthermore, the price hike of high unit-price e-competition keyboards and the increased market penetration rate of high unit-price keyboard with built-in backlight from 15% in 2015 to 37% led to an increase in keyboard product revenue, and also enabled the keyboard products to maintain a certain level of profit growth. On the part of image products, as consumers have realized the functions and advantages of smart home, and the price of related devices and services has declined, the smart internet life is becoming more popular, the number of smart home devices and related hardware and software expenditure continue to grow, and the revenue and profit growth of many smart home related products of the Company, such as smart doorbell, wireless network camera, pet feeding machine, smart speaker, etc., will also be better than expected. On the part of power supply, in addition to the continuous growth of e- competition related power supply products, with the injection of high-value products such as smart home, game machine, type-C notebook and large watt notebook, the performance is also expected to be good. On the CRPS server power supply with a long-layout, orders have been won from large manufacturers, and the start of another wave of growth momentum is expected. The Company has the competitive advantage of integrating key technologies in imaging, Wi-Fi, power control and software which can continuously raise the market share in relevant markets, and is expected to further boost the overall profits of the Company due to the high added value and optimized product structure.

The development of PC and NB products in the world is mature. In recent years, the two major driving forces which stop the expansion of decline in product shipment are the wave of machine upgrade in the commercial market and the demand for e-games. However, with the rapid improvement of mobile phone specifications and efficiency and the constant impact of mobile games, the demand for e-games in the NB market is slowing down. Light and thin NB should be the mainstream for the next generation of design. Folding screen NB may be a new source of growth momentum for the NB industry which has been weak for many years. The compound growth rate of global smart home is about 17% from 2019 to 2023. Among company related security control products, surveillance camera (20%), anti-theft alarm (19%) and access control system (17%) are the top three. Research institutions predict that the sales volume of global surveillance camera will increase from US$36.9 billion in 2018 to US$68.4 billion in 2023, with an annual growth rate of about 13%.With the continuous digital transformation of enterprises, the gradual fermentation of AI applications, and the active promotion of hybrid cloud by cloud operators, the global server shipment volume is expected to grow by 5% in 2020; coupled with the explosion of 5G data transmission volume since 2023, a push in computing demand is expected. It is estimated that the composite growth rate of global server shipment will reach 6.5% from 2019 to 2024. After the subsidiary Chicony Power gains a stable foothold in the three major markets of PC related products, cloud intelligence products and consumer electronic power supply, it will strive to enter the fields of server and database center.

The Power Supply Unit (PSU) is responsible for converting from the unstable power of the external supply to the stable power supply which is required for electronic products by the stable voltage and converter technique. Direct Current

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(referred to as DC), is used by most of the electronic products. However, the power supply provided by the power company can only use high-voltage Alternating Current (AC) because of the physical limitation of power generation and power transmission. Therefore, electronic products must pass through the power supply device to convert the alternating current into direct current, and to adjust the voltage to within the scope of the operation of the product, so the product can operate smoothly. In addition, electronic components have become more sophisticated, but they are also vulnerable to unstable currents. Therefore, a stable power supply is not only the key to the normal operation of the product, but also affects the service life of the product. It is the heart of the electronic product.

The power supply is distinguished by the functions and basic structure. It can be mainly divided into the Linear Power Supply (LPS), the Switch Power Supply (SPS), and the Uninterruptible Power System (UPS), in which the switch power supply is the mainstream of current products, so the following power supply industry introduction mostly uses switch power supply as the main axis.

According to the characteristics of input/output, the power supply can be divided into AC/DC (Alternating Current to Direct Current), DC/DC (Direct Current to Direct Current), AC/AC (Alternating Current to Alternating Current), DC/AC (Direct Current to Alternating Current), etc. The power supply design is different depending on the requirements of the electronic product or instrument. AC/DC power supply is the most common type. The main purpose is to convert the mains into DC power that meets the operating voltage of the product. The products include SPS, adapters, etc., and are applied to PC, NB, electrical appliances, and network equipment, etc. DC/DC conversion power supply is mainly used for communication or extremely low voltage, or extremely high current. It converts the DC power that has been converted by the AC/DC power supply unit into various special voltages that are usually used when an extremely stable power supply is required or equipment that requires special operating voltage, such as computer chips, etc. AC/AC is mainly used in UPS (Uninterruptible Power System), DC/AC for solar power conversion, and so on. The detailed classification and use of the power supply can be found in the table below.

Main Classification of Power Supply

		Main Classification of Power Supply
Input/	Category	Major Products
Output Type
AC/DC	PC Power Supply	The most common type of power supply and the main features
		are high efficiency, iron shell protection, and power between
		50W - 2,000W.
AC/DC	Open Frame	Power supply built-in network communication products,
		industrial computers, industrial machinery, and displays have no
		iron shell protection and have a high degree of freedom in design.
		It can be customized based on space and power requirements.
AC/DC	Adapter	The common type of external power supply is covered by a
		plastic case, and is mostly used in notebook computers and
		various consumer electronic products.
DC/DC	Converter	DC power supply is used for buck-boost by AC/DC devices, and
		it is used in electronic products that require precise voltage.
AC/AC	UPS	UPS is an abbreviation for the uninterruptible power system. It is
		usually connected to AC for charging. When the power is off, AC
		power can beprovided to electronicproducts such as computers.

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In recent years, the concept of environmental awareness and energy conservation and carbon reduction has gradually become popular. How to improve the conversion efficiency of power supply and reduce standby power consumption in line with national energy conservation regulations and environmental protection laws and regulations will become the research and development focus of various manufacturers. Therefore, energy-saving products such as LCD TVs and LED lighting appliances are also becoming new markets for the industry; in order to develop revenue sources, manufacturers have taken advantage of power technology to gradually cut into other required high-power power converters, and other products,

The new UBS TYPE C's identifiable system power supply has been gradually applied to the power supply by the new generation of PCs and mobile phones, and the TYPE C's USB interface connector may also become part of the standardization of mobile phones.

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(2) Association Among the Upstream, Midstream, and Downstream Operations
Keyboard
Upstream Midstream Downstream

==> picture [338 x 241] intentionally omitted <==

==> picture [360 x 46] intentionally omitted <==

Digital Camera

Upstream Midstream Downstream

==> picture [435 x 236] intentionally omitted <==

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3. Power Supply and LED Light Source Products

Related Upstream, Midstream, and Downstream Chart for Power Supply Manufacturing Industry

Manufacturing Industry
Active Component Manufacturing (control IC, power transistor, diode)		Communication
		Products Including
Passive Component Manufacturing (protective parts, resistor, capacitor)		Computer Information Products


		Consumer and Other
Magnetic Component Manufacturing (transformer,	Power Supply Manufacturing	Medical Industry Electronic Products

		Aerospace Industry
Printed Circuit Board
Manufacturing		Industrial and Automatic Control
Iron, Wire, Plastic, Packaging Materials		Monitor, LED Lighting

Power supplies usually consist of various active components (electrical signal amplification, oscillation, calculations, such as control ICs, power transistors, diodes), passive components (that do not change the basic characteristics of electrical signals, such as capacitors, resistors, protective parts), and the magnetic component (volatile filter or lifting voltage, such as transformers, inductors, filters), The above mentioned components are fixed on the printed circuit board (PCB) after manual or mechanical automation. If the power supply is not part of the Open Frame product, a metal casing is required to protect and shield the electromagnetic wave, and the external wiring material can be connected before being packaged for shipment. Power supplies are used in a wide variety of applications. In addition to being sold separately or as components of other electronic products, Taiwan manufacturers mainly produce power supplies for communication products, computer information products, and consumer electronics.

In the power supply market, Taiwanese companies are more focused on AC/DC and DC/DC products. Under normal circumstances, AC/DC applications are widely used, and DC/DC can be used as internal components of electronic products. Mostly used for high-end industrial power supply, the product technology level is relatively high. From the upstream, midstream, and downstream structures of the power supply industry, in the control IC part (components) of the “upstream raw materials” industry, it can be found that except for a small part of Taiwan that relies on foreign imports, most of the remaining components have good self-manufacturing capabilities. In the “downstream application industry” part, the Taiwanese information industry is mature and the industry chain is complete. It is highly competitive for PC-related, consumer electronics, Netcom, and industrial machinery.

Development Trend in Power Supply

(1) Product is Oriented towards Being Small and Beautiful

The power supply is a key component of electronic products, and its functional requirements are closely related to the characteristics of the application products. In recent years, electronic products have begun to

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develop into small size, beautiful appearance, lightweight, stackable, low energy consumption, etc. In response to this demand, it is necessary to reduce the size of the module, beautify it, and increase the energy conversion efficiency.

(2) Product Quality and Technical Upgrade
As the standard products of power supply suppliers are becoming more and more mature, the main products of domestic manufacturers are mainly supporting information applications, and more and more competitors are involved, so the price competition is fierce. In the case that the downstream application product gross profit is becoming lower and lower, the Company must enter the new application market, and power supply manufacturers must not only improve their technology and quality, control costs and expand their own industrial economic scale, but also must strengthen the development and design of high value-added products.
(3) Safety Regulations are Becoming Stricter
Due to the increase in energy prices and consumer environmental awareness, the future development trend is to develop environmental protection and energy-saving products. In order to protect consumer safety, each country’s safety requirements for electronic products are becoming stricter. In order to comply with the related regulations on energy conservation, the products and manufacturers that can provide solutions in technical design will have competitive advantages and market opportunities.
(4) Assembly Line and Key Components with Automated Production

In response to the shortage of manpower and rising wages, automated production can solve the delay in delivery and overall cost increase caused by manpower, and can also maintain product quality and reduce the quality problems caused by human negligence.

Competition of Power Supply

Since the power supply industry needs economies of scale or production technology, and some high-end or environmental power supplies need to be patented or certified, and the technical requirements of high-end products are relatively high and the research and development costs are high, so the entry threshold is relatively high. The future trend is that large companies will become bigger and bigger.

Taiwan is a major producer of global information products. Driven by downstream industries, power supply shipments have remained high, and competitors in the power supply industry are mainly Taiwanese manufacturers. Due to the wide range of applications of power supplies, and the fact that most companies focus on specific power ranges or applications, and each competitor has its own advantages, few companies on the market are eliminated, and they can find their own positioning in the market.

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(3) R&D and Technology Overview
Research and Development Expenses for the Most Recent Year and the First Quarter of 2019

2019
	Unit: NT$ 1,000
Year	2019	2020Q1
	Consolidated Financial Report	Consolidated Financial Report
R&D Expenses	3,369,287	492,306
OperatingRevenue(Net)	92,552,325	18,110,219
R&D Expenses to Revenue %	3.64%	2.72%

Research and Development Achievements in 20198

(1) Keyboard, Mouse, Camera, Camera Module and other peripheral products The Company has been actively applying for patents in various countries. In recent years, the Company has obtained nearly 500 approved patents in various countries, with nearly 300 applications being under review. The Company has been listed among the top 100 companies in patent application and certification by the Intellectual Property Office of the Ministry of Economic Affairs in recent years. In 2019, we obtained 49 patents in Taiwan, including the patents for its keyboard, mouse, image device, lens module and other related technologies.

(2)Power Supply

(2)Power Supply
R&D Results	R&D Technology
• Built-in PSUfor PC,150W~850W	• LLCTechnology
• External PSU for notebooks, 30W~ 330W	• Flyback • Half-bridgeLLCarchitecture
• High-power smart DC power module for communications	• Half-bridge resonant • Digital monitoring design • Support for the redundancyfunction
• Miniaturized 30/40/60 W adapter with wall- mount design	• Active clamp Flyback + GaNFET
• New charging platformof Tablet/ Smart Phone	• Type CPD,PPS & QC
• Power supply for multi-function 300W/400W Laserprinters	• LLC+AC Module
• New 700~2500W server PSU	• Full digital control LLC architecture
• USB Type C PD adapter with multiple outputs,26W / 30W /45W /65W/90W	• Designed in accordance with the USB PD Spec and ASIC
• Large and small charging device for lithium batteries,upto 1200W	• LLC+ charging circuit
• IoT-relatedPSU 7W~30W	• Flyback+networked
• PSU platform for gaming consoles, 50W~850W	• Flyback + high-frequency LLC architecture
• PSU for inkjet printers, 15 W~50W	• Flyback architecture and plastic casing
• Direct AC lighting module and Smart Lighting module,10 W~150W	• AC directly controlled LED light source

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R&D Results	R&D Technology
• Built-in PSU for PC,150W~850W	• LLC Technology
• External PSU for notebooks, 30W~ 330W	• Flyback • Half-bridge LLC architecture
	• Zigbeenetwork architecture
• External high efficiency PSU for gaming PCs, 120W~330W	• LLC architecture
• Parallel module for drone charging stations, 1200W~2000W	• LLC architecture + charging auto controlsystem
• Desktop gamingPSU,550W~850W	• LLC architecture + Flyback + Buck
• Industrial Tablet PC embedded power supply, 50W~350W	~~• Active Clamp Forward~~ • APFC • LLC architecture
• LED daylight and positioning lamp module • LED low beam module • LED high beam module • LED high/low beam module • LED fog lamp module • LED daylight and turn signal lamp module • LED combination tail lamp module • LED high mounted stop lamp module • LED interior lampmodule	• Optical design for the LED high/low beam module • Light-guide type LED daylight and turn signal lamp design • Thick-wall type LED daylight and turn signal lamp design • Temperature protection design • Optical design for the LED low beam module

Future Research and Development Plans for the Coming Year

(1) Keyboard, Mouse, Camera, Camera Module and other peripheral products

Apart from environmental protection and energy saving, the Company continues to study the application of environmental protection materials and develop low-power products, and also continues to develop new technologies and products for customers. In the future, we will focus on the development of human/machine interface input devices, emphasize the application technology of products and enhance the traceability (IOT) and intelligent loss prevention (AI) functions of wireless devices.

In response to the arrival of the 5G generation, the bandwidth will be greatly improved, the maturity of video image related products will be accelerated, and the human life style will be changed after the combination with AI intelligence. Therefore, the Company will also focus on the development of AI and visual products, and expand the application of image products for smart home and remote connection.

(2) Power Supply Products and LED Lighting Equipment

A. Office Automation and PC Power Products:

In recent years, various industries have gradually listed energy conservation, carbon reduction, and green energy as requirements. In all types of power products, there are relevant international organizations that define future performance standards. Power products must move toward more efficient R&D. Focus on the future efficiency trend, adhere to the principle of innovation, and the Company invested a lot of resources to develop power products beyond the Platinum brand.

B. Entertainment Input Device:

Due to the advent of the cloud era, network streaming has gradually replaced traditional hardware. The mainstream trend of new hardware input

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devices will be various Set-Top Boxes. Both the in-line power strip and the external thin power adapter are the future trend.

C. Smart Building System:

Smart systems have related abilities that are networking, computing, control, and learning capabilities, and provide a full range of intelligent solutions for lighting, air conditioning, power, security, human-vehicle detection, human-computer interaction, and widely used in residential, office, shopping malls, parks, and the city will be the core of the integrated management system of the future smart city.

D. PSU products for cloud information equipment and data center:

In the future, in the design and development of cloud equipment power supply, it is especially necessary to increase the proportion of software design applications, and focus on the power supply monitoring unit and digital power control, such as the power supply of the home security monitoring system. In the face of cloud service technology needs, the Company's power management solutions will continue to be launched, and challenges of future power supply design will be dealt with.

E. LED Lighting Equipment of Power Supply:

In order to provide a solution for overall system energy-saving lighting, and to meet the lighting environment design of human factors engineering, intelligent lighting has become one of the cores of research and development.

F. Car LED Headlight:

The Company expects to develop LED adaptive lamp (ADB) modules this year. ADB design reduces the glare of the oncoming car by automatically detecting the external environment and converting the light pattern, and the light type conversion is performed in accordance with the road environment conditions. By using the precise and direct characteristics of the laser, we can design a more compact high beam auxiliary light module and give the car factory greater flexibility in the exterior design.

(4) Long and Short-term Business Development Plans
Short-term Business Development Plan
- (1) To expand continually the market share of products such as keyboards, images (lens modules, DV products, IP CAM, driving recorders, etc.), and power supplies.
- (2) To focus on OEM/ODM business, in addition to increasing the number of existing models of new customers and new product lines, and actively seek new customers, and to expand continually the market share.
- (3) In order to make the Company's turnover and profitability grow steadily, the market share of existing competitive products will be expanded, and the proportion of sales of high value-added products will be increased.
- (4) To expand markets in emerging markets such as China, South America, and India, as well as Korean markets.
- (5) The Company's direct investments of Chicony Power Co., Ltd, actively develop smartphones, smart homes, AI technology, and the Internet of Things, and other high value-added products business.
- (6) In addition to augmenting the existing customer EMS product line business, the direct investments company, XAVi Technologies Co., Ltd, actively promoted the three first-line customer groups including Europe, America, and China.
- (7) In order to meet the needs of customers' products and maximize the Company's

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benefits, and continue to integrate the Group's marketing and global operations resources, ONE STOP SHOPPING is adopted for customers.

     - (8) The group integrates key technology in imaging, WIFI, power control, and software, and develops new product areas such as smart home, security, AI, and the Internet of Things.

  2. Long-term Business Development Plan

     - (1) In order to maintain the Company's competitiveness, the Company continues to look for talents and strengthen its marketing, research and development, production, and global operations capabilities.

     - (2) To develop actively non-traditional PC products such as e-sports, servers, game consoles, AI technology, smart homes, and the Internet of Things.

     - (3) To expand the original international sales locations in the US and Japan.

Marketing, production, and sales overview
(1) Market Analysis
1. Sales Market for Primary Products

Distribution of Primary Products and Services in Major Markets and Distribution Methods:

Methods:
Purpose of	PrimaryMarket	Distribution Method
Electronical Parts and Components, Consumer and Other Electronic Products, etc.	America, Europe, Asia, Domestic	Domestic Sales, Export Sales, Indirect Sales

2. Market Share of Product

The Company sells many computer information peripheral products, including keyboards, digital cameras, mobile phone camera modules, notebook computer built-in camera modules, smart home-related products, the subsidiary company, Xavi Technologies Corporation, and subsidiaries Netcom products of Zhanda Communication, etc. From internal company and customers of statistics, the Chicony Group is ranked number 1 in the world market share in many products, such as PC/NB keyboards, NB power supply, PC lens modules, network surveillance cameras, and sports type cameras (Sport DV).

The Supply, Demand, and Growth in the Market of the Future

The Company's current major products are positively related to the consumer electronics market, such as keyboards (NB, DT, Tablet), image devices (NB camera modules, sports cam, IP CAM, driving recorders, etc.), power supplies (PC, NB, server, game console), and global PCs, NBs, smart Mobile phones, game consoles, smart homes, etc. In the PC market, enterprises must update the edge of computing PC hardware equipment to response to the development of artificial intelligence (AI) and big data, so the PC shipments increase offsetting the reduced demand of PCs by consumers through smartphones. The mobile phone market is close to saturation in the tablet PC and smartphone markets, and the impact on NB continues to slow down. The results of market organization statistics show that NB compound growth in 2023 was more than 0.6%. In addition, e-sports and mobile workstations were regarded as a niche market and has become the focus of various layouts. In addition to maintaining the original PC/NB keyboard products, Chicony continues to gain benefit from the sales of these products, such as high-priced 2 in 1 devices and ultra-thin, Type-NB, e-sport keyboards, and backlit keyboard products. In terms of supply, the primary manufacturers of keyboard modules, computer cameras, and notebook computer builtin camera modules are around 2-3.

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With the improvement of consumers' understanding of smart home, the hot sale of low-cost smart speaker devices, and the promotion of various smart home device tying strategies, it is estimated that the overall device shipment will reach 1.66 billion units in 2023, with a combined annual growth rate of about 17% from 2019 to 2023. In terms of device type, currently the shipment of video entertainment devices is still the highest, but the growth rate of shipment will decrease to the last of all kinds of devices. Smart speaker products ranking second in shipment have a growth rate of about 14%, which is lower than 26% of the family monitoring safety devices. It is expected that family security control products will replace smart speakers and become the second in shipment, and this is good news for the Company’s monitoring camera and smart doorbell products. At present, there are about 2 to 3 major manufacturers.

In addition to the global PC and NB booms, servers and game consoles are also the primary markets for us. The Company enters the update cycle of server equipment, coupled with strong demand for cloud service providers. The global server market will grow by about 5%. In the future, due to the rapid development of AI technology, the chip industry is pursuing higher AI computing efficiency, plus that 5G commercialization is on the way, dedicated servers will be the future trend, and AI and 5G will be the driving forces of servers in the medium and long term. Despite the decline in sales volume of PS4 and XBOX, Switch Nintendo sales are still very high. In the current hardware field of video games, PCs, game consoles, and mobile phones are dominating the world. Most of the console games are high-end and for professional players. VR, haptic systems, and instant messaging performance are getting higher and higher, so the service revenue of game players is steadily growing in game software and subscription. It is estimated that the scale of game consoles will still be maintained at around 27% in 2019-2021. In terms of supply, there are currently two or three major manufacturers of power supplies in Taiwan.

Smart commercial buildings may be the future direction of IoT development, such as sensing lighting, portal security network cameras, climate control systems, thermostats, fire monitoring detectors, and other automation systems, which are expected to generate high revenues. The benefits of building and intelligent management of new products will be included in the group.

Competitive Niche and the Impact of Favorable Factors and Unfavorable Factors on the Future Development of the Company
(1) Competitive Niche and Favorable Factors
- A. Economies of Scale Benefit

The Group manufactures and sells a wide range of products with economies of scale and industrial position. The related products are PC/NB keyboards, NB power supplies, PC lens modules, network surveillance cameras, and Sport DVs, and they have reached number one in the product markets. The sales continue growth and shape the economies of scale and also create barriers to entry for this industry.

B. Great Product Manufacturing Experience in ODM/OEM

In addition to the three primary production factories of Suzhou, Tungwan, and Chongqing in China, we have accumulated more than 30 years of experience in ODM/OEM product manufacturing and quality control. To use the information provided by EDI and ERP systems, the VMI system (supplier managed inventory system) has been strengthened. Then, we built the system of global immediate delivery with customers that help us to reduce inventory costs and increase the flexibility of delivery, preparation, and production, speed, and the customer are also satisfied with the current situation. In order to effectively improve manufacture efficiency and continuously add the automation ratio and

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develop new processes, and expand the locations in Southeast Asian outside the mainland. The Company has also launched a global operation plan. In addition to the three major production bases in mainland China, the new plant in Thailand is also under construction and is expected to be completed in the third quarter of 2020. The capacity of the new plant in Thailand will account for about 20% of the overall revenue in the future.

C. Strong Customers

The primary customer base of keyboard and notebook computer built-in camera module products and power supply sold by the Company and Chicony Power Co., Ltd. are the top ten computer factories in the world, and we are also the designated assembly plant. Famous computer and system vendors are also our primary customers; sales to customers account for more than 50% of the total operating income, which can stabilize the Company's operating income and profit sources, and help to upgrade the product development level.

D. New High Value-added Products are Constantly Being Launched
In addition to continually maintaining good relationships with global electronics manufacturers, it is also committed to the development of high value-added products, and in response to the development trend of the future technology industry, the Group will integrate key technology in image, WIFI, power control, and software technology, and actively develop new products such as smart home, security control, smart speakers, AI, and the Internet of Things. In order to keep the performance and profitability of the Company continually growing, except to expand the original international sales base in the United States and Japan and also expand the domestic market for each product line in China.
E. Provide Customers for One Stop Shopping Service
The keyboards, computer cameras, and NB CAM products of the Company have the same primary customers as Chicony Power Co., Ltd. (indirect investment company). In order to save purchasing cost for customers and improve efficiency, the Company provides the One Stop Shopping service, and at the same time it can also increase operating revenue.
F. Complete Global Logistics and Supply System

In order to play the role of a complete global logistics planning system and closely maintain our relationships with customers, from 1996, the Company has installed quick delivery warehouses in the US and Europe to meet customers’ needs. Because customers of ODM/OEM are increasing more and more, the Company has built many factories around the world.

G. Strong Management Team

The management team of the Company has completed academic and practical experience, focusing on the industry, the stable operation style, and have an average of more than 15 years of experience in the Company. The composition includes managers with more than 20 years of relevant experience in manufacturing, sales, management, research and development, and accounting.

H. Research and Development Center of Industry-Academia Cooperation The Company established the “Chicony R&D Scholarship” and cooperates with the Taipei University of Technology and responds to the government-sponsored policy of integrating industry and education, and established the Taipei University of Technology R&D Center at the Taipei University of Technology. The Company cooperates with the students of the Department of Electrical Engineering and Automation by appointing engineers. Divided into a few groups, the group has the power group, electronic research group, automation and vision

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research group, software development group, etc., they jointly develop, and share research resources and results with each other. In order to allow outstanding talents to join the Company, and to create a model of Taiwan's industryuniversity upgrades and respond to the government-sponsored industryuniversity policy, we participated in the ranks of the first P-TECH school of the junior college of the Ministry of Education.

(2) Unfavorable Factors and Response Strategies:
A. The sales prices of computer and digital imaging industry products have fallen because of rapid market changes, fierce competition, and falling prices.
B. The production of the China factory faces the pressure of rising labor wages and a lack of workers.
C. China's electronic component industry has a local advantage, and Chinese companies continue to upgrade technology and accelerate the construction of the supply chain.
D. The global economy is slowly recovering and affecting the terminal consumer market.
E. The traditional PC (including NB) market is already saturated and there is limited growth.

Response Strategies:

－ To develop new technologies, new design abilities, and seek cooperation with more suppliers. In addition to continuously integrating the materials in the Group for common purchase, and also expanding cooperation with China suppliers to reduce the purchasing materials cost.
－ In order to maintain revenue and profit, the Company continued to develop high added value products, and increased sales proportion by ourselves, and continuously expanded market share.
－ In order to deal with the pressure of rising labor costs per year in China and effectively improve production efficiency, the Company has increased the automation ratio and developed new processes.
－ In order to stabilize the source of supply and increase the gross profit margin, and strengthen vertical integration and to increase the ratio of self-made major components.
－ The Company continues to expand its operations to maximize economies of scale.
－ In order to obtain more outstanding R&D talents and enhance R&D strength, we have established a “Chicony R&D Excellence Scholarship” at the school.
－ In order to reduce the impact on production, we have established a good relationship with suppliers, and maintain at least 2 or 3 suppliers for each raw material, and focus on the supplier situation at all times, and provide assistance at all times.
－ In order to reduce the debt ratio of the Company's consolidated statements, save interest expenses, and increase the Company's cash flow, it is necessary to strictly control the inventory and reduce the accounts receivable and fixed assets of capital expenditure.
－ To expand non-PC industry products such as game consoles, sports cameras, and camera modules for smartphones, and to actively develop the Internet of Things (IOT and virtual reality (VR)-related products, and Blue Ocean market products for the Smart Home. In order to effectively create new customers and develop

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more business opportunities in the Blue Ocean market, the ratio of new products in the non-PC industry has surpassed the ratio of PC products.

－ In order to make production more flexible, deliver quickly and with quality control that can meet the customer's demand, the Company strengthens the supplier management system and the customer's immediate shipping system.

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(2) Primary Purpose of the Products and Production Process

1. Primary Use:

(1) Keyboard: The keyboard is an indispensable input device, and it is also the most important interface tool for people to communicate with the computer system. It is also a personal computer, a computer workstation, a test device word processor, a Chinese computer, etc.
(2) Digital Camera, Computer Camera, and Camera Module: Capture scenes and record images.
(3) Smart Home: Uses smart phones and other connected devices to enter the home market, such as smart doorbells, smart speakers, smart lights, etc.
(4) Power Supply and LED Lighting Equipment:

Product	Function	Usage
PSU for desktop PCs (Desktop PC Power)	AC is a full-range 90 ~ 265 VAC voltage, converted into single or multiple sets of output, the main power outputs include 180 W, 200 W, 250 W, 300 W, 350W, 550W, 650W, 750W and 850W.	Used for desktop personal computers.
PSU for notebook computer (Adapter and PSU for gaming PC)	AC is full-range 90~265 VAC voltage, main output is 19V, 20V and greater than 75W. It includes power factor correction circuit and the output ranges from 30W to 400W etc.	Used on general notebook computers and AIO PC; those with output greater than 150W are used for notebook workstations.
PSU for game consoles	AC is full-range 90~265VAC voltage, main output is 12V. It includes power factor correction circuit and the output ranges from 100W to 500W etc.	Mainly used for game consoles.
PSU for set-top-box	Divided into built-in and external (Adapter) forms; to make it easier for repairs, they have gradually changed to the external (Adapter) in recent years. The AC is full range or 115 ranges, and the output is made according to the requirement of the set-top-box; usually under 60W.	Used on various set-top-boxes.
PSU for LED drive	AC is between 85VAC to 265VAC, or between 180VAC to 265VAC. It also provides constant power to work with the demands of numbers and brightness of LED. The new technology that AC directly drives the LED module.	Provided for use with large amounts of indoor light bulbs, linear light, ceiling light, spot lamps and outdoor streetlights and patio lights.
Inkjet printer and laser printer power system	AC is between 85VAC to 135VAC or 180VAC to 265VAC; all outputs are made according to printer requirements and they all have laser engine drivers.	Used for large laser printers with different functions.
Cloud server power system and data power system	Ultra-high power density full digital control (N+1 / N+N) redundant power system. It can be used for monitoring of input AC/output DC, which is the output of 500W~several KW. Communication PSU generally has a 48V output whereas storage/AI servers usually have 12V or 54.5V single/multiple sets of output monitoring systems.	Used for communication systems, storage devices and servers.

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Product	Function	Usage
Charging device IOT PSU USB Type C power adapter	Charges lithium compound batteries.	Used to charge various tablet computers. Drone charging stations and charging devices for electric cars.
Industrial Tablet PC embedded power supply	AC is the full-range 85~265VAC voltage or DC is 18~32VDC voltage, the main output is 12V, 24V isolated power supply. The output power varies from 50W to 450W.	Provide various sizes of industrial touch panel computers.

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==> picture [401 x 721] intentionally omitted <==

----- Start of picture text -----

SHIPPING
Shipment
Inspection OBA
Finished
Warehouse
Product Entry
Sampling
Inspection FQA
Rear Setting Up (FINAL Assembly)
Semi-finished Product Sampling Inspection Semi-finished Product Sampling Inspection IPQA
Printing (AUTO
Automatic PRINTING)
Board Assembly (PCB Assembly)
Automatic Insertion Semi-finished
(AUTO INSE) Product Sampling Inspection (IPQA)
(SMD)
Surface Mount
Button Cap Assembly (KEY TOP Assembly)
Material
Warehouse
2. Production Process: (1) Keyboard
IQA
Material
Acceptance
Material Receiving
----- End of picture text -----

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==> picture [420 x 658] intentionally omitted <==

----- Start of picture text -----

Finished Product Appearance Inspection Sampling Inspection FQA Package
Finished Product
Function Test
OBA
Shipping Inspection
Body
Assembly
SHIPPING
PCBA
Focusing
PCBA
Function Test
SMT
Assembly
Material Receipt Material Acceptance Material Warehouse
(2) Digital Camera, Computer Camera, and Camera Module:
----- End of picture text -----

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(3) Switching Power Supply (including LED drive power):

a. Production Process

==> picture [461 x 143] intentionally omitted <==

----- Start of picture text -----

Prepare Pretreating Auto-Insertion Direct Insertion Visual Inspection Flow Soldering
Materials Process
Package
Quality Control Retest Shell Assembly Inspection Test Secondary
Test Repair Welding
b. Test Process
Line Test Function Test Shell Assembly Burn-in Test High-pressure Visual Inspection
Test
----- End of picture text -----

(3) Supply of Key Materials

In order to reduce production costs, keyboards, computer cameras, mobile phone camera modules, NB built-in camera modules, digital cameras, and cloud cameras are made by Chicony Power (Tungwan) Co., Ltd, Chicony Power (Suzhou) Co., Ltd, Mao Ray Co., Ltd. (Tungwan), and Chicony Power (Chongqing) Co., Ltd., which are the 100% indirect investment of our Company. Primary raw materials required [Keyboard: KEY TOP keycap, membrane switch rubber button, and IC integrated circuit, etc.; Digital Camera, Computer Camera, Camera Module: sensor, DSP/ASIC digital processor, LCD screen, lens, DDR memory, and flash memory, etc.,] and purchase price, etc. are set up by our Unified Purchasing Center, then subsidiaries make the order by themselves. Due to long-term strategic cooperation with our primary suppliers, we have established a good relationship with suppliers. Since most of the material manufacturers have more than two, if there is any supply and demand imbalance in the market there is no impact to our operation. It is beneficial development to the long-term of our Company.

The primary raw materials of the power supply are power lines, capacitors, fans, heat sinks, semiconductors, transformers, molded cases, printed circuit boards, insulating sheets, and sockets. In order to reduce production costs, Chicony Power (Tungwan) Co., Ltd, Chicony Power (Suzhou) Co., Ltd, and Chicony Power (Chongqing) Co., Ltd which are the indirect investment of our Company are responsible for the production of primary materials for us, and the purchasing price is set up by the Company strategic procurement department, then Chicony Power International Inc. and subsidiaries make the order by themselves. Since there are more than two material manufacturers for most of the materials, and we have a good relationship with suppliers, and the source and quality are stable, so there is no impact to our operation.

(4) The names of the customers accounting for more than 10% of the total purchase (sales) in any of the last two years, and the amount of purchase (sale) in proportion to total purchase (sales), and the reasons for the changes, if applicable:
Key Supplier Information
Key Supplier Information in the Consolidated Financial Reports (names of the customers accounting for more than 10% of the total purchase in any of the last two years): None
Key Customers Information Key Customers Information in the Consolidated Financial Reports (names of the customers accounting for more than 10% of the total net sale in any of the last two years)

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					Unit`：`Thousand NT$	Unit`：`Thousand NT$	Unit`：`Thousand NT$	Unit`：`Thousand NT$	Unit`：`Thousand NT$	Unit`：`Thousand NT$	Unit`：`Thousand NT$	Unit`：`Thousand NT$
	2018				2019				1Q2020
Item	Name	Amount	Ratio of net sales of the whole year(%)	Relation ship with the issuer	Name	Amount	Ratio of net sales of the whole year(%)	Relation ship with the issuer	Name	Amount	Ratio of net sales of the whole year(%)	Relationship with the issuer
1					Client A (Note 1)	10,440,897	11	None	Client B (Note 1)	2,262,825	12	None
2	Others	87,260,406	100		Others	82,111,428	89		Others	15,847,394	88
Total	Net Sales	87,260,406	100		Net Sales	92,552,325	100		Net Sales	19,110,219	100

Note ： Explanation of the reason of the changes for trade debtors

1.The products sold to client A and B meet the market demand, so the amount of sales increased.

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(5) Production Volume Table

Unit: Thousand Unit/NT$ 1,000

						Unit: Thousand Unit/NT$ 1,000	Unit: Thousand Unit/NT$ 1,000	Unit: Thousand Unit/NT$ 1,000	Unit: Thousand Unit/NT$ 1,000	Unit: Thousand Unit/NT$ 1,000
Year	2018					2019
Production Volume and Value Premium Products	Production Capacity	Production Volume	Production Value	Purchasing Volume	Purchasing Value	Production Capacity	Production Volume	Production Value	Purchasing Volume	Purchasing Value
Electronic Parts and Components	354,504	261,979	42,036,718	-	-	348,529	270,231	43,701,147	-	-
Consumer and Other Electronic Products	144,857	145,505	49,365,125	2,878	1,948,355	140,873	134,451	48,346,597	3,457	2,054,184
Others	32	1,957	226,355	-		32	235	148,738	-
Total			91,628,198		1,948,355			92,196,482		2,054,184

(6) Sales Volume Table

Unit: Thousand Unit/ NT$ 1,000

Year	2018(Note 1)	2018(Note 1)	2018(Note 1)	2018(Note 1)	2019(Note 2)	2019(Note 2)	2019(Note 2)	2019(Note 2)
Sales Volume and Value Premium Products	Domestic Sale		Export Sales		Domestic Sale		Export Sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Electronic Parts and Components	15,837	2,920,295	159,367	38,989,634	15,199	3,424,175	157,612	42,242,507
Consumer and Other Electronic Products	5,198	3,678,705	84,639	40,892,720	5,324	3,249,456	80,476	42,765,841
Other	1	498,286	3	280,766	0	541,220	3	329,126
Total		7,097,286		80,163,120		7,214,851		85,337,474

Note 1: The consolidated operating revenue for 2018 is NT$87,260,406 thousand.

2: The consolidated operating revenue for 2019 is NT$92,552,325 thousand.
Number of Employees, Average Years of Service, Average Age, and Education Distribution

Taiwan Employee Data During the Past Two Years and Up to March 31, 2020 [Consolidation]

Year	Year	2018	2019	3/31/2020
Number of Employees	Direct Staff	25,523	22,123	24,737
	Indirect Staff	5,294	5,474	5,502
	Total	30,817	27,597	30,239
Average Age		29.59	30.01	32.94
Average Years of Service		2.62	3.31	3.88
Education Distribution (%)	PhD	0.05	0.06	0.06
	Master’s Degree	2.05	2.47	2.38
	University	11.38	13.01	11.83
	Senior High School	23.96	23.59	25.45
	Senior High School and Below	62.56	60.86	60.28

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Information on environmental protection spending
(I) Losses Caused by Environmental Pollution in recent 2 years and up to the date of printing of this Annual Report: None.
(II) Response Strategies:

The Company’s primary products are the research and development, manufacturing, and sales of computer peripherals. Therefore, there is no pollution problem. The overseas production location has purchased inspection equipment for ICP-inspectable materials, perform related personnel training, and have acquired the local government certification, so the Company has complied with the Restriction of Hazardous Substances (RoHS) by EU since July 2006. The Company has also imported related control software systems to ensure related control operations.

As of March 31, 2020, the raw materials required for the manufacture of our products have adopted the international environmental standards and to meet customer requirements.

Our Company thinks the maintenance of environmental quality, and the implementation of safety and sanitation work in various production factories are very important, and continues to strengthen the environmental quality and protection of employee's health. In the spirit of entrepreneurial social responsibility, the Company focuses on environmental protection. In order to improve the overall image of the Company, the Suzhou factory has a dedicated unit responsible for the project, and promoting the product process wastewater recycling system.

(III) Sizable Expenditures for Environmental Protection Expected in the Future: None.

Labor Relations
(I) Employee Benefit Policy:
1. In addition to the labor law and related laws and regulations, the Company's employee welfare includes group insurance (including life insurance, medical insurance, anticancer insurance, accident medical insurance, and accident insurance), regular health checks, education and training subsidies, and emergency counseling. Because of the above welfare, employees will commit more for the Company.
2. The Company established the Employee Welfare Committee based on the employee welfare law. The Company regularly holds domestic and foreign travel, community activities, and birthday parties, it regularly issues birthday and annual vouchers, and urgent for employees, work-related injury, marriage, funeral, sickness, and birth allowances are also given.
3. In order to adjust the employees' condition in mind and body and establish the employees' centripetal force to the Company, we regularly hold various employee networking activities.
4. The Company provides related training in the profession, management, and languages, etc. for employees.
(II) Continuing Education and Training for the Employees:

In order to develop the working ability of employees, the Company cultivates professional knowledge and skills for employees and increases work efficiency by establishing management methods. The methods can also allow employees to ensure the quality of work and to achieve the Company's goal of sustainable business and development. In addition to new staff education and training, newcomers can quickly integrate into the organization team. The department heads and employees can also organize whole Company departmental training courses, seminars, etc. to meet the needs of the Company's internal and external environmental trends, and to strengthen and

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enhance the professional competence and core competitiveness of employees by training and study channels.

(III) Retirement System and Implementation Status:
The Company appropriates 2% of the total salary as pension and stores it in the Taiwan Bank Labor Retirement Reserve account of the Company, and the Company recognizes pension expenses as the net refund cost base on the actuary assessment report every month; In July 2005, the Company performed and compiled the “Labor Pension Act”, and the Company appropriates 6% to the personal accounts of the employees supervised by the Labor Insurance Bureau based on the employees choice new system.
The standard of pension application and the method of payment shall be processed in accordance with the provisions of the Law on Labor and the new system of retiring.
(IV) Important Agreement Between Labor and Management:

The rights and obligations of both employers and employees are processed based on the Company's working rules and personnel administrative rules and regulations. (The work rules of the Company and the personnel administrative rules and regulations are based on the labor law and related laws and regulations, and the work rules have been reported to the local authorities.)

(V) Status of Various Employees Rights of Maintenance Measures:

The Company has established relevant management measures and systems, and clearly defined employee rights, obligations, and welfare items, and regularly reviews and revises relevant measures and systems to maintain the rights and benefits for all employees.

(VI) Since the establishment of the Company on February 22, 1983, the Company has maintained a harmonious relationship with employees, so there is no loss caused by labor disputes. In order to maintain a harmonious relationship with employees, the management of the Company is very concerned with the smooth communication between the employer and the employee, and implements a humanized management system. The Company performs the concept of respect, trust, quality, and innovation, and implements the advancement of quality, and the development of new products. The Company's team is fully committed to achieving the organization's and the Company's operational goals to create a better future.
(VII) Net Losses Suffered by the Company (including affiliated enterprises) Due to Labor Disputes from 2019 to March 31, 2020, and that it May Suffer in the Future: None.

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6. Vital contracts

Number	Nature of the Contracts	Contracting Parties	Term of the Contracts	Principal Content	Restriction Clause
1	Bank Credit Contract	E.SUN.BANK Co., Ltd.	11/1/2018-11/1/2023 5-year Period	NT$2 Billion Medium-term Guarantee Loan Quota	The collateral is set as 14F-25F., No. 69, Sec. 2, Kuangfu Rd., Sanchung Dist., New Taipei City (Chicony Headquarters Building).
2	Bank Credit Contract	LAND BANK OF TAIWAN CO., LTD.	From December 28, 2018 to December 28, 2023 5-year Period	NT$1 Billion Medium-term Guarantee Loan Quota	The collateral is set as 8F-13F., No.69, Sec. 2, Kuangfu Rd., Sanchung Dist., New Taipei City (Chicony Headquarters Building).
3	Bank Credit Contract	HUN NAN BANK CO., LTD.	From December 28, 2018 to December 28, 2023 5-year Period	NT$1 Billion Medium-term Guarantee Loan Quota	The collateral is set as 2F-7F., No.69, Sec. 2, Kuangfu Rd., Sanchung Dist., New Taipei City (Chicony Headquarters Building).
4	Joint Credit Contract (Note)	TAIWAN COOPERATIVE BANK CO., LTD. First Bank CO., LTD. E.SUN.BANK Co., Ltd. CHANG HWA BANK CO., LTD. LAND BANK OF TAIWAN CO., LTD. HUN NAN BANK CO., LTD. BANK OF TAIWAN CO., LTD. Taipei Branch of Bangkok Bank Co., Ltd. Mega Bank Co., Ltd. TAIWAN BUSINESS BANK CO., LTD. Yuanta Bank Co., Ltd. Taipei Fubon Bank Co., Ltd. Shin Kong Bank Co., Ltd. Far Eastern International Bank Co., Ltd.	From the date of first use to the expiration of five years. Date of Signing the Contract: October 30, 2015 Date of First Use: January 20, 2016	The credit quota is equivalent to NT$4.5 billion, which is used cyclically. The portion of the qualified account receivables of the Company shall be transferred to the management bank from the date of signing the joint credit contract, and the balance of the eligible account receivables plus the designated special account shall exceed 50% of the total amount of the credit granted.	Financial Ratio of the Original Commitment that Should be Maintained:
5	Sales Contract (Note)	Company A	This contract is effective for the Company from June 1, 2009. This contract remains in continual effect if one party fails to notify the other party in writing of the termination of the contract by 90 days before the scheduled termination date.	The requirements and details of the purchase of the Company's products are listed in the contract and in the attachment.	Contract Content Confidential by Contract
6	Independent Contractor (Note)	Suzhou Weiye Group Construction Development Co., Ltd.	12.28.2018 - End of Warranty Responsibility	Regarding engineering-related rights and obligations, the Company signed this contract, and performed related projects by handing over the “New Construction Project of Wujiang Economic Development Zone in Suzhou City, Jiangsu Province” to Suzhou Weiye Group Construction Development Co., Ltd.	-

Note: Contracts 4-6 were signed by Chicony Power Technology Co., Ltd. [stock code 6412], which is a direct investment of 50.71% by the Company.

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VII.Financial Highlights

Most Recent 5-Year Concise Financial Information

(I) 1. Concise Consolidated Balance Sheet

Unit: NT$ 1,000

Year Item	Year Item	Most Recent 5-Year Concise Financial Information (Note 1)	Most Recent 5-Year Concise Financial Information (Note 1)	Most Recent 5-Year Concise Financial Information (Note 1)	Most Recent 5-Year Concise Financial Information (Note 1)	Most Recent 5-Year Concise Financial Information (Note 1)	Financial information from the Current Year t~~o~~ March 31, 2020
		2015	2016	2017	2018	2019
Current Assets		36,417,796	39,822,492	43,470,794	46,422,143	47,180,486	39,445,464
Property, Plant, and Equipment(Note 2)		15,461,482	13,495,266	13,554,882	12,371,429	12,821,680	12,698,911
Intangible Assets		263,118	255,143	249,404	233,688	142,341	144,657
Other Assets(Note 3)		6,827,699	10,724,875	10,179,300	9,904,648	11,299,750	10,075,016
Total Assets		58,970,095	64,297,776	67,454,380	68,931,908	71,444,257	62,364,048
Current Liabilities	Before Distribution	30,223,111	33,064,768	36,873,474	39,182,202	38,242,738	35,378,802
	After Distribution	33,249,494	36,100,321	40,095,158	41,949,060	42,605,554	(Note 4)
Non-current Liabilities		2,632,556	2,708,075	2,305,511	1,568,182	1,307,492	1,088,091
Total Liabilities	Before Distribution	32,855,667	35,772,843	39,178,985	40,750,384	39,550,230	36,466,893
	After Distribution	35,882,050	38,808,396	42,400,669	43,517,242	43,913,046	(Note 4)
Shareholders Equity Attributable to the Parent Company		22,278,297	24,159,007	23,793,637	24,078,155	27,268,375	22,037,580
Capital Stock		7,038,101	7,120,820	7,206,051	7,303,799	7,344,975	7,344,975
Additional Paid-in Capital		4,090,426	4,629,152	5,136,660	5,633,933	6,114,005	6,111,348
Retained Earnings	Before Distribution	12,416,132	12,862,540	13,792,778	14,934,034	17,452,333	13,129,655
	After Distribution	9,354,558	9,791,275	10,534,895	12,167,176	13,089,517	(Note 4)
Other Equity		(955,085)	63,660	(1,824,687)	(3,065,027)	(3,331,661)	(4,237,121)
Treasure Shares		(311,277)	(517,165)	(517,165)	(728,584)	(311,277)	(311,277)
Uncontrolled Equity		3,836,131	4,365,926	4,481,758	4,103,369	4,625,652	3,859,575
Total Equity	Before Distribution	26,114,428	28,524,933	28,275,395	28,181,524	31,894,027	25,897,155
	After Distribution	23,052,854	25,453,668	25,017,512	25,414,666	27,531,211	(Note 4)

Note 1: The financial information of each of the above years is audited by the CPA; the first quarter of 2020 is the reviewed amount by the CPA.
Note 2: The asset revaluation has not been processed in each of the above years.
Note 3: Assets revaluation has not been processed in 2015.

From 2016 to 2019: Investment Property is recognized by the acquisition cost, and the subsequent measurement uses the fair value model. The gains or losses from changes in the fair value of the investment property are recognized in profit or loss in the period in which they happen.

Note 4: For the above-mentioned distribution figures, from 2015 to 2018 they are in turn filled in according to the resolutions of the annual shareholders' meeting; the 2019 cash dividend distribution is filled in according to the resolution of the board of directors on March 10,

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2020; there is no earnings distribution plan adopted by the board of directors or the shareholders' meeting in the first quarter of 2020.

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(I) 2. Separate Condensed Balance Sheet:

Unit: NT$ 1,000

		Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000	Unit: NT$ 1,000
Year Item		Most Recent 5-Year Concise Financial Information (Note 1)
		2015	2016	2017	2018	2019
Current Assets		11,328,075	10,607,153	10,621,312	10,612,030	11,924,370
Property, Plant, and Equipment (Note 2)		5,445,330	3,062,806	3,298,479	1,968,170	1,930,484
Intangible Assets		22,031	21,474	21,027	18,179	14,676
Other Assets(Note 3)		30,317,660	36,416,022	35,369,493	39,819,737	43,316,287
Total Assets		47,113,096	50,107,455	49,310,311	52,418,116	57,185,817
Current Liabilities	Before Distribution	23,038,870	23,965,858	24,230,229	27,348,158	28,710,117
	After Distribution	26,065,253	27,001,411	27,451,913	30,115,016	33,072,933
Non-current Liabilities		1,795,929	1,982,590	1,286,445	991,803	1,207,325
Total Liabilities	Before Distribution	24,834,799	25,948,448	25,516,674	28,339,961	29,917,442
	After Distribution	27,861,182	28,984,001	28,738,358	31,106,819	34,280,258
Shareholders Equity Attributable to the Parent Company		22,278,297	24,159,007	23,793,637	24,078,155	27,268,375
Capital Stock		7,038,101	7,120,820	7,206,051	7,303,799	7,344,975
Additional Paid-in Capital		4,090,426	4,629,152	5,136,660	5,633,933	6,114,005
Retained Earnings	Before Distribution	12,416,132	12,862,540	13,792,778	14,934,034	17,452,333
	After Distribution	9,354,558	9,791,275	10,534,895	12,167,176	13,089,517
Other Equity		(955,085)	63,660	(1,824,687)	(3,065,027)	(3,331,661)
Treasure Shares		(311,277)	(517,165)	(517,165)	(728,584)	(311,277)
Uncontrolled Equity		-	-	-	-	-
Total Equity	Before Distribution	22,278,297	24,159,007	23,793,637	24,078,155	27,268,375
	After Distribution	19,216,723	21,087,742	20,535,754	21,311,297	22,905,559

Note 1: The financial information of each of the above years is audited by the CPA.

Note 2: The asset revaluation has not been processed in each of the above years. Note 3: Assets revaluation has not been processed in 2015.

From 2016 to 2019: Investment Property is recognized by the acquisition cost and the subsequent measurement uses the fair value model. The gains or losses arising from changes in the fair value of investment property are recognized as losses or benefits in the period when it happens.

Note 4: For the above-mentioned distribution figures, from 2015 to 2018 they are in turn filled in according to the resolutions of the annual shareholders' meeting; the 2019 cash dividend distribution is filled in according to the resolution of the board of directors on March 10, 2020.

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(II) 1. Concise Consolidated Comprehensive Income Statement

Unit: NT$ 1,000 (Except for the unit of earnings per share, which is “dollars”)

Year Item	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Financial information from the Current Year to March 31, 2020
	2015	2016	2017	2018	2019
OperatingRevenue	80,663,369	77,018,060	78,155,686	87,260,406	92,552,325	18,110,219
Gross Profit	12,251,817	13,517,449	13,454,337	12,616,764	16,281,488	2,813,739
OperatingIncome	4,605,263	5,028,077	4,569,330	4,649,536	6,269,465	1,285,653
Non-operating Income and Expenses	614,476	331,284	1,520,689	385,936	1,919,271	(1,163,004)
Earnings Before Taxation	5,219,739	5,359,361	6,090,019	5,035,472	8,188,736	122,649
Net Income of Continued Operations	5,219,739	5,359,361	6,090,019	5,035,472	8,188,736	122,649
Loss From Discontinued Operations (value after deducting income tax)	-	-	-	-	-	-
Net Income (loss) in Current Period	4,393,240	4,309,071	4,872,216	3,978,909	6,802,752	78,980
Other Comprehensive Income in Current Period (net income)	(970,589)	979,506	(2,403,270)	(517,092)	(886,943)	(964,115)
Total Comprehensive Income in Current Period	3,422,651	5,288,577	2,468,946	3,461,817	5,915,809	(885,135)
Net Income Attributable to Shareholders of the Parent Company	3,761,498	3,531,068	4,021,529	3,590,711	5,838,817	40,137
Net Income Attributable to Uncontrolled Equity	631,742	778,003	850,687	388,198	963,935	38,843
Total Comprehensive Income Attributable to the Parent Company	2,836,580	4,526,727	2,113,156	3,203,987	5,018,523	(865,323)
Comprehensive Income Attributable to Uncontrolled Equity	586,071	761,850	355,790	257,830	897,286	(19,812)
Earningsper Share	5.63	5.21	5.89	5.22	8.45	0.06

Note: The above annual financial information is audited by the CPA; the first quarter of 2020 is the reviewed amounts of the CPA.

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(II) 2.Separate Condensed Comprehensive Income Statement

Unit: NT$ 1,000 (Except for the unit of earnings per share, which is “dollars”)

Year Item	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]	Most Recent 5-Year Financial Information (Note) [reasons and conditions of correction or restatement must be described]
	2015	2016	2017	2018	2019
OperatingRevenue	33,498,853	24,819,362	23,309,518	24,501,048	28,369,842
Gross Profit	3,526,181	4,317,560	4,136,135	4,172,651	5,344,693
OperatingIncome	1,069,916	1,488,756	1,147,835	1,011,352	1,600,928
Non-operatingIncome and Expenses	2,907,946	2,326,485	3,387,272	2,729,615	4,650,814
Earnings Before Taxation	3,977,862	3,815,241	4,535,107	3,740,967	6,251,742
Net Income of Continued Operations	3,977,862	3,815,241	4,535,107	3,740,967	6,251,742
Discontinued Operation Loss (value after deductingincome tax)	-	-	-	-	-
Net Income(loss)in Current Period	3,761,498	3,531,068	4,021,529	3,590,711	5,838,817
Other Comprehensive Income in Current Period(net income)	(924,918)	995,659	(1,908,373)	(386,724)	(820,294)
Total Comprehensive Income in Current Period	2,836,580	4,526,727	2,113,156	3,203,987	5,018,523
Net Income Attributable to Shareholders of the Parent Company	3,761,498	3,531,068	4,021,529	3,590,711	5,838,817
Net Income Attributable to Uncontrolled Equity	-	-	-	-	-
Total Comprehensive Income Attributable to the Parent Company	2,836,580	4,526,727	2,113,156	3,203,987	5,018,523
Comprehensive Income Attributable to Uncontrolled Equity	-	-	-	-	-
Earningsper Share	5.63	5.21	5.89	5.22	8.45

Note 1: The financial information of each of the above years is audited by the CPA.

(III ) Audit Situation for the CPA

Name of the CPA and Audit Comments in the Past Five Years

Year	Name of CPA	Audit Opinions
2015	Wang,Hui-Hsien/Lin,Chun-Yao	Modified Unqualified Opinions
2016	Wang,Hui-Hsien/Lin,Chun-Yao	Unqualified Opinions
2017	Lin,Chun-Yao/Weng,Shih-Jung	Unqualified Opinions
2018	Weng,Shih-Jung/Chen,Chin-Chang	Unqualified Opinions
2019	Weng,Shih-Jung/Chen,Chin-Chang	Unqualified Opinions

Change of the CPA in the Most Recent Five Years:

Due to internal organization restructuring in PricewaterhouseCoopers Accounting Firm, the Firm has replaced Chun Yao Lin CPA and Hui Hsien Wang CPA with Chin Chang Chen CPA and Weng Shirong CPA for fiscal year 2017; For fiscal year 2018, the Firm replaced Chun Yao Lin CPA and Shih Jung Weng CPA with Shih Jung Weng CPA and Chin Chang Chen CPA.

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2. Financial Analysis of the Recent 5 years

(1) 1. The Financial Ratio Analysis of Consolidated Financial Statements (if there is a standalone financial report, the financial ratio analysis of stand-alone financial statement should be edited)

should be edited)	should be edited)
Year Analytical Item		Most Recent 5-Year Financial Analysis (Note 1) (one season before the date ofprinting)							As of this year of March 31, 2020 (Note 1)
		2015	2016	2017	2018	2019	Change in 2019 Compared to 2018 %	Description of Reason
Financial Structure	Liabilities to Assets Ratio(%)	55.72	55.64	58.08	59.12	55.36	-6.36		58.47
	Long-term Capital to Property, Plant and Equipment Ratio(%)	161.12	199.09	192.54	207.30	222.87	7.51		182.11
Ability to Repay Debts	Current Ratio(%)	120.50	120.44	117.89	118.48	123.37	4.13		111.49
	Quick Ratio(%)	85.66	85.03	80.16	70.94	83.34	17.49		72.11
	Debt Service Coverage Ratio	69.49	69.72	59.17	36.20	67.50	86.45	1	8.55
Utility	A/R Turnover(times)	4.30	4.04	4.04	4.68	4.77	1.90		4.02
	Average Days of Payment Collection	85	90	90	78	77	-1.86		91
	Inventory Turnover (times) (Note 9)	6.10	5.70	5.09	4.90	4.84	- 1.17		4.25
	A/P Turnover(Times)	3.51	3.16	3.05	3.35	3.23	-3.47		2.84
	Average Days of Sale	60	64	72	75	75	1.18		86
	Property, Plants, and Equipment Turnover (times)	5.43	5.31	5.77	6.72	7.33	9.12		5.66
	Total Assets Turnover (times)	1.39	1.25	1.18	1.28	1.32	3.02		1.08
Profitabil ity	ROA(%)	6.60	5.83	6.24	5.43	8.46	55.69	2	0.32
	ROE(%)	16.94	15.21	16.77	15.00	22.74	51.60	3	0.65
	EBIT to Paid-in Capital Ratio(%) (note 7)	74.16	75.26	84.51	68.94	111.49	61.71	4	6.68
	Net Profit Margin(%)	4.67	4.58	5.15	4.11	6.31	53.31	5	0.22
	Earnings per Share (NTD)	5.63	5.21	5.89	5.22	8.45	61.95	6	0.06
Cash Flows	Cash Flow Ratio(%)	27.47	23.60	17.19	16.67	28.92	73.46	7	N/A
	Cash Flow Adequacy Ratio(%)	103.41	115.77	110.74	101.31	114.32	12.84		N/A
	Cash Reinvestment Ratio(%)	14.43	14.00	9.80	9.73	21.79	123.83	8	N/A
Leverage	Operational Leverage	3.85	3.63	3.84	3.90	3.28	-15.98		3.45
	Financial Leverage	1.02	1.02	1.02	1.03	1.02	-1.13		1.01

Please describe the reasons for the changes in the financial ratios in the recent two years. (Exempt from analysis if the increase or decrease of change is less than 20%)

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In 2019, the increase or decrease from 2018 was more than 20%, as described below:

The decrease in interest expense is mainly due to an increase in net profit before tax and a decrease in average loan amount in the current period.
The main reason is an increase in profit of this year, resulting in an increase in the return on assets compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the return on shareholders' equity compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the ratio of operating profit to paid-in capital and the ratio of pre-tax net profit to paid-in capital compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the net profit ratio compared with last year.
The main reason is an increase in profit in this year, resulting in an increase in earnings per share compared with last year.
The main reason is a higher cash flow of operating activities than that of the previous period, resulting in a higher cash flow ratio than that of the same period last year.
The main reason is a higher cash flow of operating activities than that of the previous period, resulting in a higher cash reinvestment ratio than that of the same period last year.
Note 1: The financial information of each of the above years is audited by the CPA; the first quarter of 2020 is the reviewed amount by the CPA.
Note 2: The calculated formula of the important financial ratios in the above table: same as (I) 2. Note 2.
Note 3: The calculated formula of the earnings per share mentioned above should be specially considered when measuring the use of this formula: same as (1I) 2. Note 3.
Note 4: The special considerations for measuring the use of cash flow analysis are as follows: same as (I) 2. Note 4.

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(1) 2. The Financial Ratio Analysis of Stand-alone Financial Statements (if there is a stand-alone financial report, the financial ratio analysis of stand-alone financial statement should be edited)

Year Analytical Item	Year Analytical Item	Most Recent 5-Year Financial Analysis (Note 1)	Most Recent 5-Year Financial Analysis (Note 1)	Most Recent 5-Year Financial Analysis (Note 1)	Most Recent 5-Year Financial Analysis (Note 1)	Most Recent 5-Year Financial Analysis (Note 1)	Most Recent 5-Year Financial Analysis (Note 1)	Most Recent 5-Year Financial Analysis (Note 1)
		2015	2016	2017	2018	2019	Change in 2019 Compared to 2018 %	Description of Reason
Financial Structure	Liabilities to Assets Ratio (%)	52.71	51.79	51.75	54.07	52.32	-3.24
	Long-term Capital to Property, Plant and Equipment Ratio(%)	442.11	853.52	760.35	1,273.77	1,475.05	15.80
Ability to Repay Debts	Current Ratio (%)	49.17	44.26	43.83	38.80	41.53	7.04
	Quick Ratio (%)	43.22	39.13	38.74	32.89	35.87	9.04
	Debt Service Coverage Ratio	150.24	552.02	163.95	88.51	161.32	82.27	1
Utility	A/R Turnover(times)	5.51	4.61	4.57	6.12	7.41	21.06	2
	Average Days of Payment Collection	66	79	80	60	49	-17.40
	Inventory Turnover (times) (Note 9)	22.89	14.84	15.00	14.13	14.41	1.97
	A/P Turnover(Times)	1.82	1.14	1.07	1.08	1.06	-2.33
	Average Days of Sale	16	25	24	26	25	-1.93
	Property, Plants, and Equipment Turnover (times)	6.60	5.67	7.11	8.89	14.12	58.91	3
	Total Assets Turnover (times)	0.72	0.50	0.46	0.46	0.50	9.18
Profitability	ROA(%)	8.26	7.28	8.14	7.13	10.71	50.30	4
	ROE (%)	16.94	15.21	16.77	15.00	22.74	51.60	5
	EBIT to Paid-in Capital Ratio (%)	56.52	53.58	62.93	51.22	85.12	66.18	6
	Net Profit Margin(%)	11.41	14.64	17.78	14.66	20.58	40.43	7
	Earningsper Share(NTD)	5.63	5.21	5.89	5.22	8.45	61.95	8
Cash Flows	Cash Flow Ratio (%)	24.45	10.63	8.87	19.08	18.96	-0.61
	Cash Flow Adequacy Ratio(%)	112.11	106.07	89.89	93.81	111.41	18.76
	Cash Reinvestment Ratio (%)	10.47	-2.57	-4.99	12.41	14.06	13.26
Leverage	Operational Leverage	1.77	1.61	1.70	2.04	1.91	-6.43
	Financial Leverage	1.03	1.00	1.02	1.04	1.02	-1.84

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Please describe the reasons for the changes in the financial ratios in the recent two years. (Exempt from analysis if the increase or decrease of change is less than 20%)

In 2019, the increase or decrease from 2018 was more than 20%, as described below:

The main reason is an increase in net profit before tax and a decrease in average loan amount in the current period, resulting in a decrease in interest expense.
The main reason is an increase in operating income in the current period.
The main reason is an increase in operating income in the current period.
The main reason is an increase in profit of this year, resulting in an increase in the return on assets compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the return on shareholders' equity compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the ratio of operating profit to paid-in capital and the ratio of pre-tax net profit to paid-in capital compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the net profit ratio compared with last year.
The main reason is an increase in profit of this year, resulting in an increase in the earnings per share compared with last year.

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Note 1: The financial information of each of the above years is audited by the CPA.
Note 2: The calculated formula of the important financial ratios in the above table, listed below:
Financial Structure
(1) Liabilities to assets ratio = total liabilities/total assets.
(2) Long-term capital to property, plant, and equipment ratio = (total equity + non-current liabilities)/net property, plant, and equipment.
Ability to Repay Debts
(1) Current ratio = current assets/current liabilities.
(2) Quick ratio = (current assets – inventory – prepayments)/current liabilities.
(3) Debt service coverage ratio = EBIT/interest expense in current period.
Utility
(1) Receivables turnover (including account receivables and note receivables from operation) = net sale/the balance of average receivables in each period including account receivables and note receivables from operation.
(2) Average days of payment collection = 365/receivable turnover.
(3) Inventory turnover = cost of goods sold/average inventory.
(4) Payables turnover (including account payables and note payables from operation) = net sale/the balance of average payables in each period including account payables and note payables from operation.
(5) Average days of sale = 365/inventory turnover.
(6) Property, plant, and equipment turnover = net sale/net average property, plant, and equipment.
(7) Total assets turnover = net sale/total average assets.
Profitability
(1) Return on Assets (ROA) = [net income + interest expense x (1 – tax rate)]/average total assets.
(2) Return on Equity (ROE) = net income/total average equity.
(3) Net profit rate = net income/net sales.
(4) Earnings per share = (income attributable to the shareholders of the parent company – dividend of preferred shares)/weighted average quantity of outstanding shares. (Note 3)
Cash Flows
(1) Cash flow ratio = net cash flows from operation/current liabilities.
(2) Net cash flow adequacy ratio = net cash flow from operation in the last 5 years/(capital expenditures + increase in inventory + cash dividend) in the last 5 years.
(3) Cash reinvestment ration = (net cash flow from operation – cash dividend)/(gross property, plant, and equipment + long-term investment + other non-current assets + working capital). (Note 4)
Leverage:
(1) Operational leverage = (net operating income – variable operating cost and expense)/operating income (Note 5).
(2) Financial leverage = operating income/(operating income – interest expenses).
Note 3: Pay attention to the following in measurement with the aforementioned equation of the earnings per share in the calculation:
Based on the weighted average quantity of common shares, not the outstanding quantity of shares at the end of the year.
Consider the period of circulation for transactions with the offering of new shares for raising capital or repurchase of treasury shares in the calculation of the weighted average quantity

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of outstanding shares.

If there is capitalization of retained earnings or capitalization of additional paid-in capital into new shares, make adjustment in the calculation of earnings per share of the previous year and on semi-annual basis in retrospect of the increase in the size of capital irrespective of the period of capitalization.
If the preferred shares are unconvertible accumulative preferred shares, the dividend of the year (released or not) shall be deducted from net income, or added to net loss after tax. If the preferred shares are not accumulative, and there is the net income, dividends for preferred shares shall be deducted from net income. If there is net loss, no adjustment is necessary.
Note 4: Pay attention to the following in the measurement of cash flow in the analysis:
Net cash flow from operation is the net cash inflow from operation as presented in the statement of cash flows.
Capital expenditure shall be the cash outflow from annual capital investment.
The increase of inventory is only included in the calculation when the balance at the ending of the period is greater than the balance at the beginning of the period. If there is a decrease of inventory at year end, calculate on the basis of zero.
Cash dividends include the cash dividends for common shares and preferred shares.
Gross property, plant, and equipment are the total property, plant, and equipment before accumulated depreciations.
Note 5: Issuers shall classify operating costs and expenses by purpose of use as fixed or variable. If estimation or subjective judgment is involved, make sure it is rational and consistent.
Note 6: If the stock issued by the Company bears no face value, or the face value is not NT$10/share, the calculation of the aforementioned ratio to paid-in capital shall be based on the ratio of the equity attributable to the parent company of the balance sheet.

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2019 Financial Report: The Audit Committee’s Review Report

Chicony Electronics CO., Ltd.

The Audit Committee’s Review Report

We hereby confirm

The Board of Directors of Chicony Electronics Co., Ltd prepared and presented the 2019 business report, consolidated financial statements and individual financial statements, and the statement of retained earnings. The financial statements were audited by the PwC Taiwan, appointed by Board, and an independent auditor's report was issued by it.

The Audit Committee has audited the above-mentioned reports that were composed and presented by the Board of Directors. They have been audited and it is concluded the reports are presented fairly according to Corporate Law and other related regulation; therefore, a Supervisor's Report is hereby issued in accordance with Article 14-4 of the Securities and Exchange Act and Company Law Article 219.

For your review

Shareholders’ Meeting 2020

Convener of the Audit Committee: Lee, Yen-Sung

March 10, 2020

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Consolidated Financial Report Audited by the CPA in 2019

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS

DECEMBER 31, 2019 AND 2018

For the convenience of readers and for information purpose only, the 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. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of CHICONY ELECTRONICS CO., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of Chicony Electronics Co., Ltd. and its subsidiaries (the “Group”) as at December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to “Other matter” section of our report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements of the current period are stated as follows:

Appropriateness of warehouse operating revenue cut-off

Description

Refer to Notes 4(32) and 6(25) for policies on revenue recognition and details of revenue.

The Group’s revenue arises from sales of goods, consisting mainly of factory direct shipment and warehouse sales revenue. Warehouse sales revenue is recognised when the goods are dispatched from the warehouses (transfer of control of products) and it is based on the reports and other relevant information provided by the warehouse custodians. The Group’s warehouses are located in multiple countries, and the revenue recognition process involves several manual operations. Thus, we determine the warehouse sales revenue cut off as one of the key areas of focus for this fiscal year’s audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Evaluated the internal controls for regular reconciliation between the Group and its warehouse custodians.
Performed the revenue recognition cut-off tests, including obtaining sufficient appropriate audit evidences from the warehouse custodians and reviewing the reconciliations of the Group’s accounting records.
Conducted warehouse inventory audit by using physical counts or using confirmation letters to validate inventory balances with the warehouse custodians.

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Valuation of inventory

Description

Refer to Notes 4(12), 5(2) and 6(7) for the description of accounting policy, critical accounting estimates, uncertainty of assumptions and details of accounts.

The Group's main inventories are keyboard, power supplies, camera modules and other electronic products. The prices of such inventories are affected by market demand and the rapid technological changes. Therefore, there is higher risk of market decline. As the assessment of net realisable value of inventories is subject to management judgement, we consider the valuation of inventory as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Assessed whether the Group's accounting policies comply with the relevant standards and the Group’s industry practice and the reasonableness of management’s evaluation process, including the determination of net realisable value of inventories, the sales expenses and the judgement of obsolete inventories. Checked whether the provision policies were consistently adopted in the reporting periods.
Obtained net realisable value statement of inventories to confirm whether the calculation logic was adopted consistently, and tested the data sources of selected samples which includes inventory price or purchase price to verify whether the net realisable value used by the management was in compliance with its policies, and recalculated the accuracy of allowance for inventory valuation losses.

Other matter - Audit by other auditors

We did not audit the financial statements of certain consolidated subsidiaries and investments accounted for under the equity method, which statements reflect total assets (including investments accounted for under the equity method) of NT$1,605,559 thousand and NT$1,450,280 thousand, constituting 2.25% and 2.10% of consolidated total assets as of December 31, 2019 and 2018, respectively, and total sales revenue of NT$2,763,206 thousand and NT$2,815,523 thousand, constituting 2.99% and 3.23% of consolidated total sales revenue for the years then ended, respectively. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the financial

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statements and the information disclosed in Note 13 relative to these subsidiaries and investees, is based solely on the reports of other auditors.

Other matter - Parent company only financial reports

We have audited and expressed an unmodified opinion on the parent company only financial statements of Chicony Electronics Co., Ltd. as at and for the years ended December 31, 2019 and 2018.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 ROC GAAS 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 consolidated financial statements.

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As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated 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 controls.
Obtain an understanding of internal controls 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 Group’s internal controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the consolidated 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 report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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We communicate with those charged with governance regarding 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 consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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.

Chen, Chin-Chang Weng, Shih-Jung For and on behalf of PricewaterhouseCoopers, Taiwan March 10, 2020

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(5) 6(5) 7 6(7) 6(13) 6(2) 6(3) 6(4) 6(8) 6(9) and 8 6(10) 6(11) and 8 6(12) 6(31) 6(14) and 8	December 31, 2019 $ 4,136,522 3,922,064 2,983,854 153,736 20,184,038 332,350 160,242 13,847,346 1,453,360 - 6,974 47,180,486 1,658,144 523,618 482,573 205,522 12,821,680 891,285 6,447,876 142,341 152,339 938,393 24,263,771 $ 71,444,257	December 31, 2018
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Financial assets at fair value through other comprehensive income - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 130X Inventories, net 1410 Prepayments 1460 Non-current assets classified as held for sale, net 1470 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1535 Financial assets at amortised cost - non-current 1550 Investments accounted for using equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			$ 1,952,439 4,316,587 2,920,108 360,995 17,615,816 314,182 314,508 15,078,468 1,591,001 1,956,546 1,493
			46,422,143
			1,993,760 858,124 - 31,755 12,371,429 - 5,537,730 233,688 97,958 1,385,321
			22,509,765
			$ 68,931,908

(Continued)

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CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

Notes
December 31, 2019
December 31, 2018
6(15) and 8
$ 895,000 $ 5,643,630
6(2)
550,620
70,777
6(25)
147,815
145,243
26,342
1,720
6(16)
23,736,390
22,713,760
7
415,577
300,503
6(17)
10,871,450
8,307,849
1,207,284
1,490,003
117,066
-
6(18)
275,194
508,717
38,242,738
39,182,202
6(18) and 8
100,000
1,006,224
6(31)
583,333
297,554
365,703
-
6(19)
258,456
264,404
1,307,492
1,568,182
39,550,230
40,750,384

6(21)
7,344,975
7,303,799
6(22)
6,114,005
5,633,933
6(23)
4,976,270
4,617,199
3,105,405
1,861,304
9,370,658
8,455,531
6(24)
(
3,331,661) (
3,065,027)
6(21) and 8
(
311,277) (
728,584)

27,268,375
24,078,155
4(3)
4,625,652
4,103,369
31,894,027
28,181,524
9
11
$ 71,444,257 $ 68,931,908

Current liabilities
2100
Short-term borrowings

2120
Financial liabilities at fair value
through profit or loss - current

2130
Contract liabilities - current

2150
Notes payable
2170
Accounts payable

2180
Accounts payable - related parties

2200
Other payables

2230
Income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities

21XX
Total current liabilities
Non-current liabilities
2540
Long-term borrowings

2570
Deferred income tax liabilities

2580
Lease liabilities - non-current
2600
Other non-current liabilities

25XX
Total non-current liabilities
2XXX
Total liabilities
Equity attributable to owners of
parent

Share capital

3110
Share capital - common stock
Capital surplus

3200
Capital surplus
Retained earnings

3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest

3400
Other equity interest
3500
Treasury stocks

31XX
Equity attributable to owners of
the parent

36XX
Non-controlling interest

3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments

Significant events after the balance
sheet date

3X2X
Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

-146-

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items

Years ended December 31,
Notes
2019
2018
6(25) and 7
$
92,552,325$ 87,260,406
6(7)(29)(30) and
7
(
76,270,837) (
74,643,642)

16,281,488

12,616,764
6(29)(30)

(
3,708,989) (
3,140,664)

(
2,970,822) (
2,162,176)

(
3,369,287) (
2,515,632)
12(2)

37,075 (
148,756)

(
10,012,023) (
7,967,228)

6,269,465

4,649,536

6(26)

706,268

799,617
6(27)

1,321,223 (
255,145)
6(28)
(
123,131) (
143,035)
6(8)

14,911 (
15,501)

1,919,271

385,936

8,188,736

5,035,472
6(31)
(
1,385,984) (
1,056,563)

$
6,802,752$ 3,978,909

4000
Sales revenue

5000
Operating costs

5900
Net operating margin

Operating expenses

6100
Selling expenses

6200
General and administrative
expenses

6300
Research and development
expenses

6450
Impairment gain (loss)
determined in accordance with
IFRS 9

6000
Total operating expenses

6900
Operating profit

Non-operating income and
expenses

7010
Other income

7020
Other gains and losses

7050
Finance costs

7060
Share of profit or loss of
associates and joint ventures
accounted for under equity
method

7000
Total non-operating income
and expenses

7900
Profit before income tax

7950
Income tax expense

8200
Profit for the year

(Continued)

-147-

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items

Years ended December 31,
Notes
2019
2018

6(19)
($
15,311) ($
13,253)
6(9)

-

155,281
6(3)

368,798 (
493,547)

- (
161,893)

353,487(
513,412)

(
1,232,704) (
5,217)
6(8)
(
7,726)
1,537

(
1,240,430) (
3,680)

($
886,943) ($
517,092)

$
5,915,809$ 3,461,817

$
5,838,817$ 3,590,711

$
963,935$ 388,198

$
5,018,523$ 3,203,987

$
897,286$ 257,830

6(32)

$
8.45$ 5.22

$
8.33$ 5.15

Other comprehensive income

Components of other
comprehensive income (loss) that
will not be reclassified to profit
or loss

8311
Actuarial loss on defined benefit
plan

8312
Gain on revaluation

8316
Unrealised gain (loss) on equity
instruments at fair value through
other comprehensive income

8349
Income tax related to
components of other
comprehensive income that will
not be reclassified to profit or
loss

8310
Other comprehensive income
(loss) that will not be
reclassified to profit or loss

Components of other
comprehensive income (loss) that
will be reclassified to profit or
loss

8361
Financial statements translation
differences of foreign operations

8370
Share of other comprehensive
(loss) income of associates and
joint ventures accounted for
using equity method

8360
Other comprehensive loss
that will be reclassified to
profit or loss

8300
Total other comprehensive loss
for the year

8500
Total comprehensive income for
the year

Profit attributable to:

8610
Owners of the parent

8620
Non-controlling interest

Comprehensive income
attributable to:

8710
Owners of the parent

8720
Non-controlling interest

Earnings per share (in NT
dollars)

9750
Basic earnings per share

9850
Diluted earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

-148-

Unappropriated differences of comprehensive Assetrevaluation Non-controlling	Capital surplus Legal reserve Special reserve retained earnings foreign operations income increment Treasury stocks Total interest Total equity		$ 5,136,660 $ 4,215,046 $ 433,524 $ 9,144,208 ($ 1,009,474) ($ 2,203,492) $ 1,388,279 ($ 517,165) $ 23,793,637 $ 4,481,758 $ 28,275,395	- - - 860,203 - ( 905,391) - - ( 45,188) ( 8,690 ) ( 53,878)	5,136,660 4,215,046 433,524 10,004,411 ( 1,009,474) ( 3,108,883) 1,388,279 ( 517,165) 23,748,449 4,473,068 28,221,517	- - - 3,590,711 - - - - 3,590,711 388,198 3,978,909	- - - ( 8,143 ) 23,660 ( 395,629) ( 6,612 ) - ( 386,724) ( 130,368 ) ( 517,092)	- - - 3,582,568 23,660 ( 395,629) ( 6,612 ) - 3,203,987 257,830 3,461,817		- 402,153 - ( 402,153 ) - - - - - - -	- - 1,427,780 ( 1,427,780 ) - - - - - - -	- - - ( 36,199 ) - - - - - - -	- - - ( 3,221,684 ) - - - - ( 3,221,684) - ( 3,221,684)	391,451 - - - - - - - 453,000 - 453,000	- - - - - - - ( 211,419) ( 211,419) - ( 211,419)	165,439 - - - - - - - 165,439 - 165,439		( 134,690 ) - - - - - - - ( 134,690) 134,690 -		73,905 - - - - - - - 73,905 56,433 130,338	- - - - - - - - - ( 630,314 ) ( 630,314)		- - - ( 43,632 ) - 43,632 - - - ( 7,675 ) ( 7,675)	- - - - - - - - - ( 180,663 ) ( 180,663)	1,168 - - - - - - - 1,168 - 1,168	$ 5,633,933 $ 4,617,199 $ 1,861,304 $ 8,455,531 ($ 985,814) ($ 3,460,880) $ 1,381,667 ($ 728,584) $ 24,078,155 $ 4,103,369 $ 28,181,524		$ 5,633,933 $ 4,617,199 $ 1,861,304 $ 8,455,531 ($ 985,814) ($ 3,460,880) $ 1,381,667 ($ 728,584) $ 24,078,155 $ 4,103,369 $ 28,181,524	- - - 5,838,817 - - - - 5,838,817 963,935 6,802,752	- - - ( 13,143 ) ( 1,129,577) 322,426 - - ( 820,294) ( 66,649 ) ( 886,943)	- - - 5,825,674 ( 1,129,577) 322,426 - - 5,018,523 897,286 5,915,809		- 359,071 - ( 359,071 ) - - - - - - -	- - 1,244,101 ( 1,244,101 ) - - - - - - -	- - - ( 2,766,858 ) - - - - ( 2,766,858) - ( 2,766,858)	238,824 - - - - - - - 280,000 - 280,000	164,322 - - - - - - 417,307 581,629 - 581,629	141,980 - - - - - - - 141,980 - 141,980		46,544 - - - - - - - 46,544 136,805 183,349		( 111,598 ) - - - - - - - ( 111,598) 111,598 -	- - - - - - - - - ( 389,496 ) ( 389,496)		- - - ( 540,517 ) - 540,517 - - - - -	- - - - - - - - - ( 233,910 ) ( 233,910)	$ 6,114,005 $ 4,976,270 $ 3,105,405 $ 9,370,658 ($ 2,115,391) ($ 2,597,937) $ 1,381,667 ($ 311,277) $ 27,268,375 $ 4,625,652 $ 31,894,027
Share capital -	common stock		$ 7,206,051	-	7,206,051	-	-	-		-	-	36,199	-	61,549	-	-		-		-	-		-	-	-	$ 7,303,799		$ 7,303,799	-	-	-		-	-	-	41,176	-	-		-		-	-		-	-	$ 7,344,975
	Notes						6(24)		6(23)													6(3)								6(24)		6(23)												6(3)
		Year ended December 31, 2018	Balance at January 1, 2018	Effect of retrospective application and restatement	Balance at January 1, 2018 after adjustments	Profit for 2018	Other comprehensive income (loss) for 2018	Total comprehensive income (loss)	Appropriations of 2017 earnings	Legal reserve	Special reserve	Stock dividends	Cash dividends	Employees’ stock dividends	Purchase of treasury shares	Cash dividends paid to the subsidiaries	Difference between proceeds from addition and disposal of	subsidiary and book value	Adjustments to share of changes in equity of associates and joint	ventures	Cash dividends distributed by subsidiaries	Disposal of investments in equity instruments at fair value through	other comprehensive income	Non-controlling interest adjustment	Others (overdue dividends)	Balance at December 31, 2018	Year ended December 31, 2019	Balance at January 1, 2019	Profit for 2019	Other comprehensive income (loss) for 2019	Total comprehensive income (loss)	Appropriations of 2018 earnings	Legal reserve	Special reserve	Cash dividends	Employees’ stock dividends	Treasury stock transferred to employees	Cash dividends paid to the subsidiaries	Adjustments to share of changes in equity of associates and joint	ventures	Difference between proceeds from addition and disposal of	subsidiary and book value	Cash dividends distributed by subsidiaries	Disposal of investments in equity instruments at fair value through	other comprehensive income	Non-controlling interest adjustment	Balance at December 31, 2019

-149-

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortisation

Other non-current assets recognised as expenses

Long-term prepaid rent expense

Impairment (gain) loss determined in accordance with IFRS 9
Share-based payments

Interest income

Dividend income

Interest expense

Net loss (gain) on financial assets and liabilities at fair value -
derivative instruments

Net (gain) loss on financial assets and liabilities at fair value -
other

Share of (profit) loss of associates accounted for using equity
method

Gain on disposal of investments

Loss on disposal of property, plant and equipment

Gain on disposal of non-current assets held for sale

Impairment loss of non-financial assets

Gain on fair value adjustment of investment property

Changes in operating assets and liabilities
Changes in operating assets
Financial assets and liabilities at fair value through profit or
loss - current
Notes receivable
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash flows from operating activities

Years ended December 31,
Notes
2019
2018

$ 8,188,736 $ 5,035,472
6(9)(10)(29)
2,251,870
2,043,512
6(12)(29)
74,166
78,488
6(29)
106,070
57,839
6(29)
-
10,119
12(2)
(
34,119 )
148,756
6(20)
173,052
16,077
6(26)
(
62,299 ) (
50,882 )
6(26)
(
214,688 ) (
231,228 )
6(28)
123,131
143,035
6(2)(27)
529,054 (
449,292 )
6(27)
(
1,181,949 )
530,390
6(8)
(
14,911 )
15,501
6(27)
(
73,665 )
-
6(27)
39,982
15,161
6(27)
(
645,713 )
-
6(12)(27)
71,299
-
6(10)(27)
(
64,552 ) (
31,930 )
237,721
93,580
207,260
481,821
(
2,534,104 )
295,904
(
18,168 )
11,815
156,949
197,006
1,231,122 (
2,620,207 )
137,641 (
189,175 )
5,481
50,230
2,572 (
21,746 )
24,622 (
467 )
1,022,630
1,976,193
115,074 (
181,916 )
2,520,751 (
78,501 )
(
9,369 )
32,572
(
5,948 )
20,983
12,359,698
7,399,110
59,616
50,905
214,688
231,228
(
137,890 ) (
137,734 )
(
1,437,305 ) (
1,011,559 )
11,058,807
6,531,950

(Continued)

-150-

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of financial assets and liabilities at fair value through
profit or loss - other

Disposal of financial assets and liabilities at fair value through
profit or loss - other

Acquisition of financial assets through other comprehensive
income

Proceeds from disposal of financial assets at fair value through
other comprehensive income

Acquisition of financial assets at amortised cost

Acquisition of investments accounted for using equity method

Acquisition of property, plant and equipment

Acquisition of investment property

Proceeds from disposal of property, plant and equipment

Proceeds from disposal of non-current assets held for sale

Acquisition of intangible assets

Increase in other non-current assets

Increase in refundable deposits

Proceeds from disposal of investment property received in
advance

Net cash flows from (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

(Decrease) increase in short-term borrowings

Increase in long-term borrowings

Decrease in long-term borrowings

Treasury stock transferred to employees

Change in non-controlling interests

Cash dividends distributed by subsidiaries

Repayment of lease liabilities

Payment of cash dividends

Payments to acquire treasury shares

Overdue stock dividends

Net cash flows used in financing activities

Effect of exchange rate changes

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Years ended December 31,
Notes
2019
2018

( $ 771,302 ) ( $ 4,082,081 )

2,367,268
3,018,862

(
71,867 )
-

721,025
67,341

(
498,303 )
-

(
166,582 )
-
6(33)
(
2,981,326 ) (
2,214,556 )

(
376,095 ) (
33,763 )

220,953
128,909
6(13)
2,605,512
-
6(12)
(
64,363 ) (
62,267 )

(
312,045 ) (
756,838 )

(
15,145 ) (
40,305 )

192,802
-

850,532 (
3,974,698 )

(
4,752,915 )
1,397,247

100,000
-

(
1,443,449 ) (
480,000 )

408,578
29,119

(
233,910 ) (
296,568 )

(
389,496 ) (
630,314 )

(
93,320 )
-

(
2,624,878 ) (
3,056,245 )

- (
211,419 )

-
1,168

(
9,029,390 ) (
3,247,012 )

(
695,866 ) (
37,742 )

2,184,083 (
727,502 )
6(1)
1,952,439
2,679,941
6(1)
$ 4,136,522 $ 1,952,439

The accompanying notes are an integral part of these consolidated financial statements.

-151-

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars,

except as otherwise indicated)

1. HISTORY AND ORGANISATION

Chicony Electronics Co., Ltd. (the “Company”) was incorporated in 1983 as a company limited by shares under the provisions of the Company Law of the Republic of China. The Company has been a listed company since 1999. The Company and its subsidiaries (collectively referred herein as the “Group”) are engaged in the manufacturing and sales of keyboards and other computer peripheral components.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 10, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2019 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ IFRS 16, ‘Leases’ Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ IFRIC 23, ‘Uncertainty over income tax treatments’ Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

-152-

IFRS 16, ‘Leases’

A. IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
B. The Group has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by the FSC. Accordingly, the Group increased ‘right-of-use asset’ and ‘lease liability’ by $913,892 and $470,130, respectively, and decreased ‘long-term prepaid rents’ (shown as ‘other non-current assets’) by $443,762 with respect to the lease contracts of lessees on January 1, 2019.
C. The Group has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
(a) Reassessment as to whether a contract is, or contains, a lease is not required, instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.
(b) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
(c) The accounting for operating leases whose period will end before December 31, 2019 as shortterm leases and accordingly, rent expense of $35,519 was recognised in 2019.
(d) The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.
D. The Group calculated the present value of lease liabilities by using weighted average incremental borrowing interest rate ranging from 1% to 5.65%.
E. The Group recognised lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate and lease liabilities recognised as of January 1, 2019 is as follows:

		Amount
Operating lease commitments disclosed by applying IAS 17 as at	$	568,050
December 31, 2018
Less: Short-term leases	(	35,519)
Total lease contracts amount recognised as lease liabilities by applying
IFRS 16 on January 1, 2019	$	532,531
Lease liabilities recognised as at January 1, 2019 by applying IFRS 16	$	470,130

-153-

Incremental borrowing interest rate at the date of initial application	Weighted average incremental borrowing interest rate
	1%~5.65%

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’	January 1, 2020 January 1, 2020 January 1, 2020

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non- current’	To be determined by International Accounting Standards January 1, 2021 January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

-154-

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

-155-

(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Name of Name of Main business investor subsidiary activities Chicony Chicony Sales of computer Electronics Overseas Inc. peripherals and Co., Ltd. (COI) management of overseas (CEC) acquisitions and investments " Unikey Manufacturing and sales Electronics Co., of computers and Ltd. (UNIKEY) computer peripherals " Hipro Overseas Sales of switching power (BVI) Inc. (HOI) supplies and other electronic parts and management of overseas acquisitions and investments " Hipro Electronics Sales of switching power Ltd. (HEC) supplies and other electronic parts		December 31, December 31, 2019 2018 100% 100% 100% 100% 100% 100% 100% 100% Ownership (%)	Description
		December 31, 2019
		100% 100% 100% 100%

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Name of Name of Main business investor subsidiary activities CEC XAVi Researching, Technology manufacturing and sales Corp. (XAVi) of DSL bridges and routers " Chicony Manufacturing and sales Electronics of computer peripherals (Thailand) Co., Ltd. (CET) " Chicony Global Sales of computer Inc. (CGI) peripherals " Chicony Power Manufacturing and sales Technology Co., of plastic goods Ltd. (CP) COI Chicony America Sales of computer Inc. (CAI) peripherals " Chicony Manufacturing and sales Electronics (Dong of computers and Guan) Co., Ltd. computer peripherals (CEM2) " Mao-Feng Sales of computer International Inc. peripherals and (Mao-Feng) management of overseas acquisitions and investments " Chicony Manufacturing and sales Electronics of computers and (Suzhou) Co., computer peripherals Ltd. (CEM3) " Global Faith Sales of computer Inc. (GFI) peripherals and management of overseas acquisitions and investments " Real Young Design and sales of Electronics Co., computer peripherals Ltd. and management of (Real Young) overseas acquisitions and investments " Mao-Ray Manufacturing of Electronics electronic parts, (DongGuan) keyboards and plastic Co., Ltd. (Mao- products Ray) " Suzhou Mao- Manufacturing of Qun Electronics electronic parts, Co., Ltd. (Mao- keyboards and plastic Qun) products " Chicony Sales of computer Electronics CEZ peripherals s.r.o. (CEZ)		December 31, December 31, 2019 2018 45.94% 44.30% 100% 100% 100% 100% 49.59% 49.08% 100% 100% 100% 100% 100% 100% 100% 100% 60% 60% 100% 100% 100% 100% 60% 60% 100% 100% Ownership (%)	Description
		December 31, 2019
		45.94% 100% 100% 49.59% 100% 100% 100% 100% 60% 100% 100% 60% 100%	Note A Note A

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Name of Name of Main business investor subsidiary activities COI Suzhou Qun- Manufacturing and sales Yang Electronics of electronic parts, Co., Ltd. (Qun- keyboard and plastic Yang) products " Chicony Sales of computer Electronics peripherals Japan Co., Ltd. (CEJ) " Kuang Mao Sales of computer International peripherals and Inc. (Kuang management of Mao) overseas acquisitions and investments " Chicony Internet solution for America Group E-Commerce solution Inc. (CAGI) " Chicony Manufacturing and Electronics sales of computer (Chong-Qing) peripherals Co., Ltd. (CEM5) " Hikari Investment holdings Investment GK (Hikari) HEC Quansun Investment holdings Investment Corp. Ltd. (Quansun) " Qun-Jing Sales of computer Power Co., peripherals and Ltd. consumer equipment (Qun-Jing) CP Chicony Power Investment holdings Holdings Inc. (CPH) Chicony Power Technology (Thailand) Co., Ltd. (CPTH) Manufacturing and sales of switching power supplies and other electronic parts " Chicony Power Manufacturing and International sales of switching Inc. (CPI) power supplies and other electronic parts		December 31, December 31, 2019 2018 60% 60% 100% 100% 100% 100% 100% 100% 100% 100% - 99% 100% 100% 100% 100% 100% 100% 100% - 100% 100% Ownership (%)	Description
		December 31, 2019
		60% 100% 100% 100% 100% - 100% 100% 100% 100% 100%	Note B Note C

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Name of Name of Main business investor subsidiary activities CP Chicony Power Manufacturing and USA Inc. sales of switching (CPUS) power supplies and other electronic parts " Chicony Power Research and Technology development centre HongKong Limited (CPHK) " WitsLight Design, researching and Technology developing of LED Co., Ltd. lighting modules and (WTS) investment holdings WTS WitsLight Design, research and Technology development of LED Co., Ltd. (WT) lighting modules and " WitsLight Technology sales of LED lighting (Kunshan) Co., modules Ltd. (WTK) " Zhuzhou Torch Production and sales Auto Lamp of automotive and CO., Ltd. motorcycle (Zhuzhou components, electric Torch) machine and device, lamps and plastic products " Carlight Design, researching Technology and developing and Co., Ltd. (CT) sales of automotive and motorcycle lamps and other components CPHK Chicony Power Manufacturing and Technology sales of switching (DongGuan) power supplies and Co., Ltd. other electronic parts (CPDG) (Formerly Hipro Electronics (Dong Guan) Co., Ltd.)(HDG) international trade Manufacturing and		December 31, December 31, 2019 2018 100% 100% 100% 100% 78.125% 78.125% - 100% 100% 100% 100% 100% 100% 100% 100% 100% Ownership (%)	Description
		December 31, 2019
		100% 100% 78.125% - 100% 100% 100% 100%	Note D

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Name of Name of Main business investor subsidiary activities CPHK Chicony Power Production and sales Technology of electronic (Suzhou) Co., equipment (high- Ltd. (CPSZ) performance power supply, power module and voltage transformer) and LED lighting equipment " Quang Sheng Production and sales Electronics of electronic (Nanchang) equipment (magnetic Co., Ltd. element, circuit board (GSE) and keyboard) and voltage transformer " Chicony Power Production and sales Technology of electronic (Chong-Qing) equipment (high- Co., Ltd. performance power (CPCQ) supply, power module and voltage transformer) and LED lighting equipment " Chicony Energy Sales of LED lighting Saving equipments Technology (Shanghai) Co., Ltd. (CPSH) " Chicony Power Importing and Technology Trading exporting of switching (Dong Guan) power supplies, LED Co., Ltd. lighting equipment, (CPDGT) and other electronics Chicony Power Technology (Taizhou) Co., Ltd. (CPTZ) Researching and developing, manufacturing, sales, installation, after- sale, and advisory services of electric machinery, electric frequency device and industry automation equipment; manufacturing and sales of electrical machinery and components; import and export of goods and goods		December 31, December 31, 2019 2018 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% - Ownership (%)	Description
		December 31, 2019
		100% 100% 100% 100% 100% 100%	Note E

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Ownership (%)

Name of Name of Main business investor subsidiary activities XAVi Directmax Management of International overseas acquisitions Ltd. and investments (Directmax) " XAVi Overseas Management of Ltd. (XAVi overseas acquisitions Overseas) and investments " Systemax Development Ltd. (Systemax) Sales of DSL bridges and routers " XAVi Manufacturing and Technologies sales of DSL bridges (Suzhou) Co., Ltd. and routers	December 31, 2019	December 31, 2018 100% 100% 100% 100%	Description
	100% 100% 100% 100%

Note A: Although the Company holds less than 50% of the voting shares directly or indirectly, it meets the criteria of having control power that is reported in the consolidated financial statements.
Note B: On May 8, 2019, the Board of Directors resolved to liquidate the subsidiary, Hikari, and the company was deregistered on September 25, 2019.
Note C: On November 4, 2019, the Board of Directors of CP resolved to invest THB 38 million to establish CPTH, and the procedure was completed in the fourth quarter of 2019.
Note D: The Group sold 100% of shares in WitsLight Technology Co., Ltd. (WT) on August 1, 2019. As a result, the Group lost its control over the subsidiary. The Group recognised gain of $13,401 and shown as ‘other gains and losses’ in the statements of comprehensive income.
Note E: On May 6, 2019, the Board of Directors of CP resolved to invest USD 3 million through CPHK, a company in the third area, to establish CPTZ, and the procedure was completed in June 2019.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group:

As of December 31, 2019 and 2018, the non-controlling interest amounted to $4,625,652 and $4,103,369, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

is as follows:
Name of subsidiary Chicony Power Technology Co., Ltd.	Principal place ofbusiness Taiwan		Non-controllinginterest
		December	Ownership (%) 50.41% 31,2019	December 31,2018
		Amount $ 4,175,810		Ownership Amount (%) $ 3,718,030 50.92%

Summarised financial information of the subsidiaries:

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Balance sheets

Chicony Power Technology Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets

	December 31,2019		December 31,2018
$	17,201,000	$	17,955,003
	4,572,024		3,920,715
(	13,141,403)	(	14,440,152)
(	314,209)	(	95,722)
$	8,317,412	$	7,339,844

Statements of comprehensive income

Chicony Power Technology Co., Ltd.

			ChiconyPower TechnologyCo.,Ltd.	ChiconyPower TechnologyCo.,Ltd.	ChiconyPower TechnologyCo.,Ltd.
			Years ended December 31,
			2019		2018
Revenue	$		34,415,370	$	31,292,361
Profit before income tax			2,219,807		1,334,666
Income tax expense	(		501,917)	(	311,266)
Profit for the year			1,717,890		1,023,400
Other comprehensive loss, net of tax	(		158,999)	(	267,987)
Total comprehensive income for the year	$		1,558,891	$	755,413
Comprehensive income attributable to non-
controlling interest	$		783,647	$	380,757
Dividends paid to non-controlling interest	$		389,496	$	619,916
Statements of cash flows
			ChiconyPower Technology		Co.,Ltd.
			Years ended	December31,
			2019		2018
Net cash provided by operating activities		$	3,582,738	$	579,849
Net cash used in investing activities	(		903,711)	(	925,301)
Net cash (used in) provided by financing
activities	(		1,901,432)		128,839
Effect of exchange rates on cash and cash
equivalents	(		95,072)	(	37,158)
Increase (decrease) in cash and cash equivalents			682,523	(	253,771)
Cash and cash equivalents, beginning of year			705,018		958,789
Cash and cash equivalents, end of year		$	1,387,541	$	705,018

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(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

A. Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within other gains and losses.
B. Translation of foreign operations
(a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- (i) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- (ii) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- (iii) All resulting exchange differences are recognised in other comprehensive income.
(b) When the foreign operation partially disposed of or sold is an associate or joint arrangements, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group still retains partial interest in the former foreign associate or joint arrangements after losing significant influence over the former foreign associate, or losing joint control of the former

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joint arrangements, such transactions should be accounted for as disposal of all interest in these foreign operations.

(c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.
(d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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(7) Financial assets and liabilities at fair value through profit or loss

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(8) Financial assets at fair value through other comprehensive income

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
(a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:
(a) The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.

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(9) Accounts receivable

A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
C. The Group’s operating pattern of accounts receivable that are expected to be factored is for the purpose of selling, and the accounts receivable are subsequently measured at fair value, with any changes in fair value recognised in profit or loss.

(10) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income including accounts receivable that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

The Group derecognises a financial asset when one of the following conditions is met:

A. The contractual rights to receive the cash flows from the financial asset expire.
B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
C. The contractual rights to receive cash flows of the financial asset have been transferred; and the Group has not retained control of the financial asset.

(12) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

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- (13) Leasing arrangements (lessor) lease receivables / operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(14) Investments accounted for using equity method / associates

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

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H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

(15) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives are 20~55 years for buildings and structures, 1~10 years for machinery and testing equipment, 1~5 years for molding equipment and 1~20 years for other equipment.

(16) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

Effective 2019

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

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C. At the commencement date, the right-of-use asset is stated at cost comprising the following:
(a) The amount of the initial measurement of lease liability; and
(b) Any lease payments made at or before the commencement date.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(17) Investment property

An investment property is stated initially at its cost and measured subsequently using the fair value model. A gain or loss arising from a change in the fair value of investment property is recognised in profit or loss.

(18) Operating leases (lessee)

Applicable for 2018

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

(19) Intangible assets

A. Trademarks and licenses

Separately acquired trademarks and licenses are stated at historical cost. Trademarks and licenses acquired in a business combination are recognised at fair value at the acquisition date. Trademarks and licenses have a finite useful life and are amortised on a straight-line basis over their estimated useful lives of 1~10 years.

B. Computer software

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 1~10 years.

C. Goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method.

D. Other intangible assets are mainly technical skill and amortised on a straight-line basis over its estimated useful life of 2~14 years.

(20) Impairment of non-financial assets

A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

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B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use shall be evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(21) Non-current assets held for sale

Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell, except for an investment property is measured subsequently using the fair value model.

(22) Borrowings

A. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(23) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as effect of discounting is immaterial.

(24) Financial liabilities at fair value through profit or loss

A. Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial

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liabilities held for trading unless they are designated as hedges. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:

(a) Hybrid (combined) contracts; or
(b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.
B. Financial liabilities at fair value through profit or loss are initially recognised at fair value. Related transaction costs are expensed in profit or loss. These financial liabilities are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial liabilities are recognised in profit or loss.

(25) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(26) Non-hedging and embedded derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

(27) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.

B. Pensions
(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected

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unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

  - ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  - iii. Past service costs are recognised immediately in profit or loss.

C. Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.
D. Employees’ compensation and directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal obligation or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

- (28) Employee share based payment

A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.
B. Restricted stocks:
(a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.
(b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Group recognises the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the

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date of dividends declared.

(c) For restricted stocks where employees do not need to pay to acquire those stocks, if employees resign during the vesting period, the Company will redeem at no consideration and retire those stocks.

(29) Income tax

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

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training costs and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

(30) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(31) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(32) Revenue recognition

A. Sales of goods

(a) Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
(b) According to the contracts with customers, as the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.
(c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Group recognises the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

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(33) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are presented by deducting the grants from the asset’s carrying amount and are amortised to profit or loss over the estimated useful lives of the related assets as reduced depreciation expense.

(34) Business combinations

A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.
B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date.

(35) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION

UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets

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and liabilities within the next financial year; and the related information is addressed below:

- (1) Critical accounting judgements Evaluation of investment property

The Group follows the guidance of IAS 40 ‘Investment property’ to determine the assets to be measured at fair value. The Group’s investment properties are mainly land and buildings. Their fair value is determined by an external appraiser and the fair value may be adjusted by the judgement of the external appraiser.

(2) Critical accounting estimates and assumptions

A. Impairment assessment of goodwill

The impairment assessment of goodwill relies on the Group’s subjective judgement, including identifying cash-generating units, allocating assets and liabilities as well as goodwill to related cash-generating units, and determining the recoverable amounts of related cash-generating units.

B. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

C. Evaluation of investment property

The Group’s investment properties are measured at fair value. The fair value is evaluated using the income approach by an external appraiser. It involves critical assumptions including occupancy rate, rent growth rate, discount rate, etc.. Those assumptions may be affected by the economic conditions, market needs, etc. that may change.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2019 11,540 $ 3,563,547 561,435 4,136,522 $	December31,2018
		29,338 $ 1,485,538 437,563
		1,952,439 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Details of cash and cash equivalents pledged as collateral are provided in Note 8.

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(2) Financial assets and liabilities at fair value through profit or loss

Items	December	31,2019	December	31,2018
Current items:
Financial assets mandatorily measured at fair
value through profit or loss
Listed stocks	$	3,223,483	$	4,021,134
Emerging stocks		36,253		125,097
Beneficiary certificates		200,078		660,722
Corporate bonds		264,017		321,774
Non-hedging derivatives
Forward exchange contracts		63,320		350,252
		3,787,151		5,478,979
Valuation adjustment		134,913	(	1,162,392)
	$	3,922,064	$	4,316,587
Financial liabilities mandatorily measured at fair
value through profit or loss
Non-hedging derivatives
Forward exchange contracts	$	546,310	$	68,161
Exchange rate swaps		4,310		2,616
	$	550,620	$	70,777
Non-current items:
Financial assets mandatorily measured at fair
value through profit or loss
Unlisted stocks	$	786,810	$	584,409
Beneficiary certificates		955,016		1,232,628
		1,741,826		1,817,037
Valuation adjustment	(	83,682)		176,723
	$	1,658,144	$	1,993,760

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

		31,2019		31,2018
Financial assets and liabilities mandatorily
measured at fair value through profit or loss
Equity instruments	$	1,057,828	($	272,814)
Debt instruments		3,164	(	1,893)
Beneficiary certificates		120,957	(	255,683)
Derivatives	(	529,054)		449,292
	$	652,895	($	81,098)

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B. The Group entered into contracts relating to derivative financial assets and liabilities which were not accounted for under hedge accounting. The information is listed below:

Derivative instruments Forward foreign exchange contracts -SELL NTD/BUY USD -SELL RMB/BUY USD -SELL USD/BUY RMB -SELL USD/BUY NTD Exchange rate swaps -SELL NTD/BUY USD Derivative instruments Forward foreign exchange contracts -SELL NTD/BUY USD -SELL RMB/BUY USD -SELL USD/BUY RMB -SELL USD/BUY NTD -Currency products Exchange rate swaps -SELL NTD/BUY USD	December 31,2019	December 31,2019
	Contract amount (Notional Principal) (In thousands) Due Date USD 625,000 2020.01.07~2020.12.16 USD 105,116 2020.01.22~2020.07.02 USD 240,500 2020.01.06~2020.12.07 USD 20,000 2020.01.02~2020.06.22 USD 47,000 2020.01.02~2020.01.03 December 31,2018	Due Date
	Contract amount (Notional Principal) (In thousands) USD 572,000 USD 110,762 USD 296,000 USD 5,000 USD 4,198 USD 36,000	Due Date
		2019.01.03~2019.12.20 2019.01.03~2019.01.31 2019.01.03~2019.12.31 2019.02.25 2019 03.18~2019.03.27 2019.01.02~2019.01.03

Forward foreign exchange contracts / Foreign exchange swap contracts

The Group entered into forward foreign exchange contracts and foreign exchange swap contracts to buy (sell) foreign exchange swap and interest rate swap to hedge exchange rate risk of import and export proceeds. However, these forward foreign exchange contracts and foreign exchange swap contracts are not accounted for under hedge accounting.

C. The Group has no financial assets and liabilities at fair value through profit or loss pledged to others.

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(3) Financial assets at fair value through other comprehensive income

	December	31,2019	December	31,2018
Current items:
Listed stocks	$	4,552,788	$	5,739,109
Valuation adjustment	(	1,568,934)	(	2,819,001)
	$	2,983,854	$	2,920,108
Non-current items:
Listed stocks	$	1,281,850	$	1,281,850
Unlisted stocks		664,748		967,709
		1,946,598		2,249,559
Valuation adjustment	(	1,422,980)	(	1,391,435)
	$	523,618	$	858,124

A. The Group has elected to classify equity investments that are considered to be strategic investments or steady dividend income as financial assets at fair value through other comprehensive income - current and financial assets at fair value through other comprehensive income - non-current. The fair value of such investments on December 31, 2019 and 2018 was equivalent to their carrying amount.
B. Aiming to satisfy the capital needs, the Group sold $721,025 and $67,341 equity investments at fair value which resulted in cumulative losses on disposal of $849,728 and $51,307 and were transferred as a deduction item to unappropriated retained earnings during the years ended December 31, 2019 and 2018, respectively.
C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative losses reclassified to retained earnings due to derecognition Dividend income recognised in profit or loss held at end of year	2019 2018 368,798 $ 493,547) ($ 849,728 $ 51,307 $ 120,541 $ 111,308 $

D. The Group has no financial assets at fair value through other comprehensive income pledged to others.
E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

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(4) Financial assets at amortised cost

Items December 31, 2019 Non-current items: Corporate bond $ 482,573

As of December 31, 2018, the Group had no financial assets measured at cost.

A. The Group has no amounts recognised in profit or loss in relation to financial assets at amortised cost for the year.
B. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(5) Accounts receivable

	December31,2019	December31,2019	December31,2018	December31,2018
Notes receivable	$	153,736	$	360,995
Accounts receivable	$	20,360,815	$	17,844,440
Less: Allowance for uncollectible accounts	(	176,777)	(	228,624)
	$	20,184,038	$	17,615,816

A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

December	December	31,2018
Accounts receivable 19,684,560 $ 323,535 309,054 268 43,398 20,360,815 $	Accounts receivable 17,003,966 $ 334,648 441,145 11,453 53,228 17,844,440 $	Notes receivable
		360,995 $ - - - -
		360,995 $

The above ageing analysis was based on past due date.

B. As of December 31, 2019 and 2018, the balances of accounts and notes receivable were all from contracts with customers. As of January 1, 2018, the balance of receivables from contracts with customers amounted to $19,004,846.
C. The Group has no notes or accounts receivable pledged to others as collateral.
D. As at December 31, 2019 and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents notes and accounts receivable held by the Group was equal to carrying amount.

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E. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(6) Transfer of financial assets - Transferred financial assets that are derecognised in their entirety

A. The Group entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Group is not obligated to bear the default risk of the transferred accounts receivable and does not have any continuing involvement in the transferred accounts receivable. Thus, the Group derecognised the transferred accounts receivable. As of December 31, 2019, details of the guarantee notes issued for the factoring agreement are provided in Note 9(1).
B. As of December 31, 2019, no outstanding accounts receivable were sold. As of December 31, 2018, the outstanding accounts receivable sold were as follows:

		December 31,2018	December 31,2018
Purchaser of accounts receivable E. SUN BANK	Accounts receivable transferred 1,619,443 $	Amount derecognised 1,619,443 $	Facilities 2,626,075 $	Amount advanced 1,006,632 $	Interest rate of amount advanced
					3.33%~3.47%

On December 31, 2018, the Group has no retention for the factoring of accounts receivable.

(7) Inventories

Raw materials Work in progress Finished goods		December 31,2019
	Allowance for Cost valuation loss 4,386,555 $ 321,086) ($ 2,178,881 164,060) ( 8,429,177 662,121) ( 14,994,613 $ 1,147,267) ($		Book value
			4,065,469 $ 2,014,821 7,767,056
			13,847,346 $

Raw materials Work in progress Finished goods		December 31,2018
	Allowance for Cost valuation loss 5,436,655 $ 513,406) ($ 2,210,890 206,626) ( 8,877,403 726,448) ( 16,524,948 $ 1,446,480) ($		Bookvalue
			4,923,249 $ 2,004,264 8,150,955
			15,078,468 $

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The cost of inventories recognised as expense for the year:

Cost of goods sold Loss on decline in market value Others	2019 2018 76,257,112 $ 74,091,054 $ 10,779 580,053 2,946 27,465) ( 76,270,837 $ 74,643,642 $ For theyears ended December 31,

The other losses (gains) represent income from the loss (gain) on physical count and sale of scraps and wastes.

(8) Investments accounted for using equity method

A. Investments accounted for under the equity method were as follows:

Associate: Sky-Fine Investment Limited (Sky-Fine) Swift Success Holdings Limited (Swift Success)	December 31,2019 21,264 $ 184,258 205,522 $	December 31,2018 31,755 $ - 31,755 $

B. The share of profit (loss) of associates accounted for using equity method for the years ended December 31, 2019 and 2018 are as follows:

	December	31,2019	December	31,2018
Associate:
Sky-Fine Investment Limited (Sky-Fine)	($	10,279)	($	15,501)
Swift Success Holdings Limited (Swift Success)		25,190		-
	$	14,911	($	15,501)

The amount of profit or loss of associates and other comprehensive income or loss of Sky-Fine Investment Limited is evaluated based on its financial statements audited by auditors for the same reporting period.

C. Associates

As of December 31, 2019 and 2018, the carrying amount of the Group’s individually immaterial associates amounted to $205,522 and $31,755, respectively. The Group’s share of the operating results are summarised below:

		For theyears ended	For theyears ended	December 31,
		2019		2018
Profit (loss) for the year from continuing
operations	$	14,911	($	15,501)
Other comprehensive income (loss), net of tax	(	7,726)		1,537
Total comprehensive income (loss)	$	7,185	($	13,964)

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	Total		27,049,417 $			14,677,988) (	12,371,429 $			12,371,429 $	3,029,116	260,935) (	262,105	2,134,598) (		445,437) (		12,821,680 $		27,736,074 $			14,914,394) (	12,821,680 $
	Others		4,169,865 $			2,933,414) (	1,236,451 $			1,236,451 $	324,226	19,351) (	91,383	473,288) (		70,793) (		1,088,628 $		3,875,891 $			2,787,263) (	1,088,628 $
Construction	in progress		91,193 $			-	91,193 $			91,193 $	1,171,495	-	86,054) (	-		70,675) (		1,105,959 $		1,105,959 $			-	1,105,959 $
Testing	equipment		2,234,291 $			1,698,221) (	536,070 $			536,070 $	386,244	7,246) (	53,182	227,883) (		20,713) (		719,654 $		2,512,656 $			1,793,002) (	719,654 $
Tooling	equipment		5,243,730 $			4,126,256) (	1,117,474 $			1,117,474 $	491,015	73,714) (	120,879	489,620) (		27,920) (		1,138,114 $		5,174,391 $			4,036,277) (	1,138,114 $
	Machinery		7,590,657 $			3,894,255) (	3,696,402 $			3,696,402 $	587,612	157,187) (	84,271	672,671) (		174,204) (		3,364,223 $		7,499,023 $			4,134,800) (	3,364,223 $
	Buildings		7,098,611 $			2,025,842) (	5,072,769 $			5,072,769 $	68,524	3,437) (	1,556) (	271,136) (		81,375) (		4,783,789 $		6,946,841 $			2,163,052) (	4,783,789 $
	Land	At January 1, 2019	Cost 621,070 $	Accumulated	depreciation	and impairment -	621,070 $	2019	Opening net book	amount 621,070 $	Additions -	Disposals -	Reclassifications -	Depreciation -	Net exchange	differences 243	Closing net book	amount 621,313 $	At December 31, 2019	Cost 621,313 $	Accumulated	depreciation	and impairment -	621,313 $

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	Total		27,381,120 $			13,826,238) (	13,554,882 $			13,554,882 $	2,249,093	144,070) (	1,009,488) (	2,043,512) (		235,476) (		12,371,429 $		27,049,417 $			14,677,988) (	12,371,429 $
	Others		3,793,133 $			2,612,688) (	1,180,445 $			1,180,445 $	460,409	14,038) (	133,541	462,372) (		61,534) (		1,236,451 $		4,169,865 $			2,933,414) (	1,236,451 $
Construction	in progress		710,447 $			-	710,447 $			710,447 $	406,296	-	1,024,457) (	-		1,093) (		91,193 $		91,193 $			-	91,193 $
Testing	equipment		2,084,777 $			1,600,120) (	484,657 $			484,657 $	228,856	4,376) (	43,385	206,796) (		9,656) (		536,070 $		2,234,291 $			1,698,221) (	536,070 $
Tooling	equipment		5,468,324 $			4,264,091) (	1,204,233 $			1,204,233 $	308,307	52,921) (	186,336	490,328) (		38,153) (		1,117,474 $		5,243,730 $			4,126,256) (	1,117,474 $
	Machinery		6,965,235 $			3,541,705) (	3,423,530 $			3,423,530 $	717,531	72,735) (	329,965	629,078) (		72,811) (		3,696,402 $		7,590,657 $			3,894,255) (	3,696,402 $
	Buildings		7,008,820 $			1,807,634) (	5,201,186 $			5,201,186 $	127,694	-	52,369	254,938) (		53,542) (		5,072,769 $		7,098,611 $			2,025,842) (	5,072,769 $
	Land		1,350,384 $			-	1,350,384 $			1,350,384 $	-	-	730,627) (	-		1,313		621,070 $		621,070 $			-	621,070 $
		At January 1, 2018	Cost	Accumulated	depreciation	and impairment		2018	Opening net book	amount	Additions	Disposals	Reclassifications	Depreciation	Net exchange	differences	Closing net book	amount	At December 31, 2018	Cost	Accumulated	depreciation	and impairment

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A. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:

Amount capitalised Interest rate	For theyears ended December 31,	For theyears ended December 31,
	2019 - $ -	2018
		16,209 $
		0.96%~1.32%

B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.
C. As the management intends to sell the Group’s land and residential compound building located in Sanchong District, New Taipei City after construction completion, the Group reclassified “Land” and “Construction in progress” to “Investment property”, amounting to $1,656,343 (the original book value). To promptly reflect the fair value information, the Group has undertaken a revaluation of the aforementioned properties in accordance with the regulations on revaluation at fair value when transferred to investment property at fair value in the fourth quarter of 2018. The revaluation surplus amounted to $155,281 which was recognised as other comprehensive income – revaluation surplus on the day of change in use of the property. After deduction of deferred tax liabilities recognised due to revaluation amounting to $150,136, the remaining balance of $5,145 was added to revaluation surplus of shareholders’ equity.

(10) Leasing arrangements - lessee

Effective 2019

A. The Group leases various assets including land use right, buildings, machinery and equipment, business vehicles, multifunction printers. Rental contracts are typically made for periods of 1 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants.
B. Short-term leases with a lease term of 12 months or less comprise multifunction printers, lowvalue assets comprise warehouses, offices and business vehicles. Those were not included in right-of-use assets.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Buildings and structures Land use right	December 31,2019 Bookvalue 474,510 $ 416,775 891,285 $	2019
		Depreciationexpense
		106,541 $ 10,731
		117,272 $

D. In April 2018, the Group signed a land use rights contracts located in Wujiang Development Zone WJ-G-2018-021, Suzhou City with Bureau of Land Resources for use of the land in the municipality of Wujiang District, Suzhou City with a term of 50 years. All rentals have been paid on the contract date.

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E. As of December 31, 2019, the Group signed a land use right contract with Bureau of Land Resources for use of the land in municipality of Chongqing, WuJiang City of Jiangsu Province and Dongguan City of Guangdong Province with term of 50 years. All rentals had been paid on the contract date, shown as ‘Long-term prepaid rents - Land use right’. The grants received from the local government, as a reward for the local investment, were deducted from the cost of land use right.
F. For the year ended December 31, 2019, the additions to right-of-use assets was $121,169.
G. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	2019
	16,616 $ 57,258 2,237

H. For the year ended December 31, 2019, the Group’s total cash outflow for leases was $169,431.
I. Details on land use right shown as ‘other non-current assets - long-term prepaid rents’ on December 31, 2018 are provided in Note 6(14).

(11) Investment property

At January 1 Additions`－`from subsequent expenditures Reclassifications－transfer out Reclassifications－transfer in Gain on fair value adjustment Net exchange differences At December 31	2019 2018 5,537,730 $ 5,517,981 $ 839,561 33,763 - 1,956,546) ( 6,033 1,811,624 64,552 31,930 - 98,978 6,447,876 $ 5,537,730 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year

Direct operating expenses arising from the investment property that did not generate rental income during the year

Years ended December 31,	Years ended December 31,
2019 61,835 $ 15,777 $ 24,231 $	2018 163,925 $ 90,340 $ 33,596 $

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B. Basis of investment property at fair value:

The Group’s investment properties are land and buildings of office building. Office buildings are located in Tokyo City, Sanchong District and Wugu District in New Taipei City. They mainly earn from rental revenue with rental periods ranging from 1 to 10 years. The assumptions used for the years ended December 31, 2019 and 2018 are as follows:

(a) Details of the Group’s investment property are as follows:

	December 31,2019
CECHeadquarter Sanchong District, New Taipei City Income approach Panasia Shao You, Chung December 16, 2019 (Note)	WuguBuilding Wugu District, New Taipei City Income approach Panasia Wei Yuan, Cheng December 16, 2019 (Note) December 31,2018	Residential CompoundBuilding
		Sanchong District, New Taipei City Income approach Panasia Shao You, Chung December 16, 2019 (Note)
CEC Headquarter Sanchong District, New Taipei City Income approach Panasia Shao You, Chung November 30, 2018 (Note)	Wugu Building Wugu District, New Taipei City Income approach Panasia Wei Yuan, Cheng October 22, 2018 (Note)	Residential Compound Building
		Sanchong District, New Taipei City Income approach Panasia Shao You, Chung October 30, 2018 (Note)

Note: We obtained effective statements of appraisal report on December 31, 2019 and 2018 from appraiser.

(b) The Company’s office buildings’ (including car parks) fair value was evaluated using the discounted cash flow analysis of income approach.
The estimation process of the valuation method involves differentiating between rented and not yet rented. The former is calculated by contract rent and the latter is calculated by market price. It also considers comparative rent information of similar properties to determine annual growth range of rent; includes idle loss, decoration offset loss, and the closing balance of disposal value of that property to calculate future cash inflow, then discounted by an appropriated discount rate accumulated until the valuation date. Future cash outflow which consists of expenses directly related to operations, i.e. land tax, house tax, insurance fee, management fee, maintenance fee, replacement allocation, amortization of agent fee, etc., is estimated based on the actual expenses incurred in the current year, considering the Company’s current operating results and changes which may occur in the future.

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(c) The rent, occupancy rate and income of past year of the Group’s office buildings (including car parks) and comparative rent information of similar properties are as follows:

Year ended December 31, 2019 CEC Headquarter Wugu Building Residential Compound Building Year ended December 31, 2018 CEC Headquarter Wugu Building Shinkawa Building Residential Compound Building	Estimated rent ($/3.3m2/month) $870~$1,044 $277~$725 $822~$984 $521~$1,076 $291~$713 $2,173~$6,519 $838~$993	Similar comparative local or market Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent	Occupancy rate 36.03% 100% - 21.45% 100% 100% -	Income of pastyear
				39,795 $ 22,040 - 23,803 $ 22,040 118,082 -

(d) Rent growth rate is evaluated by considering the lease contract and actual market situation. Discount rate is evaluated by risk premium approach which takes the return rate on investment of the most general goods as standard, adopted the floating interest rate on a 2- year time deposits of a small amount, as posted by the Chunghwa Post Co., Ltd. plus 0.75 percentage points; and explore the liquidity, risk level, value-added level and the ease of management of the subject. The rent growth rates and discount rates are as follows:

	December 31,2019	Residential Compound Building
CECHeadquarter 1.00% 2.40%	WuguBuilding 1.00% 3.05% December31,2018
		1.00% 2.22% Residential Compound Building
CECHeadquarter 1.00% 3.75%	WuguBuilding 0.50% 4.05%
		1.00% 3.05%

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C. The fair value information about the investment property is provided in Note 12(3).
D. Impairment of investment property: None.
E. Information about the investment property that was reclassified is provided in Notes 6(9) and (13).
F. Information about the investment property that was pledged to others as collateral is provided in Note 8.
G. The maturity analysis of the lease payments receivables under the operating leases is as follows:

2020 2021 2022 2023 2024 After 2025	December 31,2019
	54,255 $ 36,492 30,659 25,260 24,720 67,980
	239,366 $

H. Amount of borrowing costs capitalised as part of investment property and the range of the interest rates for such capitalisation are as follows:

Amount capitalised Range of the interest rates for capitalisation	2019 10,054 $ 0.48%~1.44%	2018
		- $
		－

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(12) Intangible assets

	Trademarks	Trademarks
	and	patents		Software		Goodwill		Others		Total
At January 1, 2019
Cost	$	54,183	$	272,703	$	136,953	$	67,720	$	531,559
Accumulated
amortisation and
impairment	(	37,475)	(	211,855)		-	(	48,541)	(	297,871)
	$	16,708	$	60,848	$	136,953	$	19,179	$	233,688
2019
Opening net book
amount	$	16,708	$	60,848	$	136,953	$	19,179	$	233,688
Additions		18,433		44,276		-		1,654		64,363
Reclassifications		-		4,678		-		-		4,678
Amortisation	(	15,557)	(	53,629)		-	(	4,980)	(	74,166)
Proceeds from disposal
of subsidiaries		-		-		-	(	12,328)	(	12,328)
Impairment loss		-		-	(	71,299)		-	(	71,299)
Net exchange
differences		-	(	587)	(	1,944)	(	64)	(	2,595)
Closing net book
amount	$	19,584	$	55,586	$	63,710	$	3,461	$	142,341
At December 31, 2019
Cost	$	72,616	$	320,372	$	132,795	$	31,634	$	557,417
Accumulated
amortisation and
impairment	(	53,032)	(	264,786)	(	69,085)	(	28,173)	(	415,076)
	$	19,584	$	55,586	$	63,710	$	3,461	$	142,341

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Trademarks
and patents
Software
At January 1, 2018
Cost
38,294
$ 251,452
$ Accumulated
amortisation and
impairment
24,004)
(
178,468)
(
14,290
$ 72,984
$ 2018
Opening net book
amount
14,290
$ 72,984
$ Acquired separately
15,889
46,378
Reclassifications
-
148
Amortisation
13,471)
(
58,417)
(
Net exchange
differences
-
245)
(
Closing net book
amount
16,708
$ 60,848
$ At December 31, 2018
Cost
54,183
$ 272,703
$ Accumulated
amortisation
37,475)
(
211,855)
(
16,708
$ 60,848
$

Goodwill
Others
Total
136,612
$ 66,494
$ 492,852
$ -
40,976)
(
243,448)
(
136,612
$ 25,518
$ 249,404
$ 136,612
$ 25,518
$ 249,404
$ -
-
62,267
-
-
148
-
6,600)
(
78,488)
(
341
261
357
136,953
$ 19,179
$ 233,688
$ 136,953
$ 67,720
$ 531,559
$ -
48,541)
(
297,871)
(
136,953
$ 19,179
$ 233,688
$

A. Details of amortisation on intangible assets are as follows:

Operating costs Selling expenses Administrative expenses Research and development expenses	Years ended December 31,	Years ended December 31,
	2019 3,186 $ 6,819 12,685 51,476 74,166 $	2018
		4,080 $ 3,570 21,302 49,536
		78,488 $

B. Goodwill is allocated to the Group’s cash-generating units identified according to operating segment as follows:

Asia America	December 31,2019 54,274 $ 9,436 63,710 $	December 31,2018
		71,944 $ 65,009
		136,953 $

C. Goodwill of the Group’s America segment is allocated to the cash-generating units identified by WitsLight Technology Co., Ltd. (WT). The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. The key assumptions used for value-in-use calculations are as follows: The value-in-use was discounted at the weighted average cost of

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capital’s discount rate of 3.33% for the year ended December 31, 2019, to reflect the specific risks relating to the relevant cash-generating units. Due to the fact that WT has incurred continued losses for years, the actual growth of operating revenue is not as expected. For the year ended December 31, 2019, based on WT’s assessment, an impairment loss of $55,843 (listed under ‘other gains and losses’ in the statement of comprehensive income) was recognised for the goodwill of America segment due to the recoverable amount is less than the carrying amount.

D. Goodwill of the Group’s Asia segment is allocated to the cash-generating units identified by Zhuzhou Torch Auto Lamp Co., Ltd. (TORCH). The recoverable amount of all cash-generating units has been determined based on value-in-use calculations. The key assumptions used for value-in-use calculations are as follows: The value-in-use was discounted at the weighted average cost of capital’s discount rate of 4.48% for the year ended December 31, 2019, to reflect the specific risks relating to the relevant cash-generating units. For the year ended December 31, 2019, based on WT’s assessment that its future operating profit will not be as expected, an impairment loss of $15,456 (listed under ‘other gains and losses’ in the statement of comprehensive income) was recognised for the goodwill of Asia segment due to the recoverable amount is less than the carrying amount.

(13) Non-current assets held for sale

On December 26, 2018, the Group determined to sell investment property held by Hikari in line with future business plans under the resolution of Board of Directors. The asset was then reclassified as held for sale. Its book value measured at fair value amounting to $1,956,546 on December 31, 2018. The transaction was completed in the first quarter of 2019 for the price of JPY 9,500 million and the relevant gain and loss on the disposal is provided in Note 6(27).

A. Basis at fair value:

The Group’s non-current assets held for sale are office building land and buildings. Office buildings are located in Tokyo City. They mainly earn from rental revenue. The assumptions used for the year ended December 31, 2018 are as follows:

(a) Details of the Group’s non-current assets held for sale are as follows:

Details of the Group’s non-current assets held for sale are as follows:
The subject Location Valuation method Valuation firm Valuer Evaluation basis date	December 31,2018
	Shinkawa Building
	Tokyo, Japan Income approach Panasia Shao You, Chung November 30, 2018

(b) The Company’s office buildings’ (including car parks) fair value was evaluated using the discounted cash flow analysis of income approach.

The estimation process of the valuation method involves differentiating between rented and not yet rented. The former is calculated by contract rent and the latter is calculated by market price. It also considers comparative rent information of similar properties to determine annual growth range of rent; includes idle loss, decoration offset loss, and the closing balance of disposal value of that property to calculate future cash inflow, then discounted by an appropriated discount rate accumulated until the valuation date. Future cash outflow which

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consists of expenses directly related to operations, i.e. land tax, house tax, insurance fee, management fee, maintenance fee, replacement allocation, amortization of agent fee, etc., is estimated based on the actual expenses incurred in the current year, considering the Company’s current operating results and changes which may occur in the future.

(c) Rent growth rate is evaluated by considering the lease contract and actual market situation. Discount rate is evaluated by risk premium approach which takes the return rate on investment of the most general goods as standard, adopted the floating interest rate on a 2- year time deposits of a small amount, as posted by the Chunghwa Post Co., Ltd. plus 0.75 percentage points; and explore the liquidity, risk level, value-added level and the ease of management of the subject. The rent growth rate and discount rate are as follows:

Rent growth rate Discount rate

December 31, 2018 Shinkawa Building 1.00% 4.10%

B. The fair value information is provided in Note 12(3).

(14) Other non-current assets

Long-term prepaid rents - land use right Guarantee deposits paid Prepayments for business facilities Others	December 31,2019 - $ 115,378 585,315 237,700 938,393 $	December 31,2018
		443,762 $ 100,234 496,259 345,066
		1,385,321 $

A. The Group recognised rental expense of $10,119 for the year ended December 31, 2018.
B. Information on other non-current assets that were pledged to others as collateral is provided in Note 8.

(15) Short-term borrowings

Type ofborrowings Bank unsecured borrowings Type of borrowings Bank unsecured borrowings	December31,2019 895,000 $ December 31,2018 5,643,630 $	Interestraterange 0.8%~1.05% Interest rate range 0.45%~1.15%	Collateral
			None Collateral
			None

As of December 31, 2019, the Group had issued promissory notes as guarantee for the short-term loans. Please see Note 9(1).

(16) Accounts payable

Accounts payable Estimated accounts payable	December 31,2019 18,373,426 $ 5,362,964 23,736,390 $	December 31,2018
		18,078,035 $ 4,635,725
		22,713,760 $

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(17) Other payables

Marketing allowance payable Salary payable and annual bonus Employees' dividends and directors' and supervisors' remuneration payable Construction and equipment expense payable Processing expense payable Miscellaneous purchase payable Others	December31,2019 3,628,296 $ 1,991,518 1,186,566 931,518 769,189 424,416 1,939,947 10,871,450 $	December31,2018
		2,664,859 $ 1,636,551 775,716 420,262 668,721 500,567 1,641,173
		8,307,849 $

- (18) Long term borrowings

Type of
Borrowing period
borrowings
and repayment term
Interest rate
Long-term bank
borrowings
TCB
Borrowing period is from
November 4, 2019 to February,
2020; interest is repayable until
maturity of the principal (Note)
1.797%
Type of
Borrowing period
borrowings
and repayment term
Interest rate
Long-term bank
borrowings
DBS Bank
Borrowing period is from
December 1, 2017 to November
29, 2019; interest is repayable
until maturity of the principal
0.57%
Sumitomo Mitsui
Banking
Corporation
(Secured
borrowings)
Borrowing period is from
March 13, 2015 to March 12,
2022; interest is repayable until
maturity of the principal
0.78%
Less: Current portion (shown as other current liabilities)

December 31,
Collateral
2019
None
100,000
$ December 31,
Collateral
2018
None
416,956
$ Investment
property
1,006,224
416,956)
(
1,006,224
$

Note: Revolving credit for five years starting from the first drawdown (January, 2016), each credit period is limited to 90 to 180 days.

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A. As of December 31, 2019 and 2018, the Group’s Chairman had issued promissory notes to guarantee the long-term loans. Please see Note 9(1).
B. Information about the long-term borrowings that were pledged to others as collateral is provided in Note 8.
C. In the fourth quarter of 2018, the Group had signed individual credit contracts with E. Sun Commercial Bank, Land Bank of Taiwan and Hua Nan Commercial Bank for long-term operating use. The contract period is five years, and the loan facilities are $2,000,000, $1,000,000 and $1,000,000, respectively. For the loan facility mentioned above, the Group had pledged partial floors of the headquarters building. For the information on pledged assets, please refer to Note 8.
D. A long-term syndicated loan facility amounting to $4,500,000 (can be drawndown in United States Dollars or New Taiwan Dollars within the total credit facility) for five years was signed by the Company, with Taiwan Cooperative Bank as the lead bank in October 2015. It is to be used for the operations.

The main contents of the contract are as follows:

(a) CP’s annual consolidated financial statements should maintain financial ratios as follows:
i. Current ratio is above 100%,
ii. Financial liabilities divided by net tangible assets after subtracting cash and cash equivalents is under 250%,
iii. Time interest earned is above 300%, and
iv. Net tangible assets are above $4,000,000.

The above financial ratios are based on the annual financial statements. If the Company does not conform to the contract, the Company should increase capital by cash or by other means. From the next day of the managing bank’s notification until the next interest paid date after the Company conforms to the contract, the lending rates will be increase by 0.125% of the used but unsettled amount of this contract, and it will not be considered a breach of contract. If CP could not adjust the financial ratios by next inspection day (subjected to the consolidated financial statements audited by auditors), the borrower is considered to have violated the contract.

(b) CP should maintain appropriate accounts receivable ratio, which means the total of qualified accounts receivable balance and the compensation accounts balance divided by the remainder of undrawn balance should be above 50%. The remainder of undrawn balance is CP’s expected drawdown amounts plus the remainder of undrawn amounts. If the ratio cannot be maintained appropriately, CP should choose any of the following actions to make the accounts receivable ratio comply with the contract within seven days after the managing bank’s notification:
i. Provide other qualified accounts receivable which was certified by the managing bank, or,
ii. Repay the loan before maturity, or,

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iii. Repay or deposit in compensation accounts to maintain appropriate accounts receivable ratio above (or equal to) 50%.
(c) As part of the contract, the commitment fee should be calculated every three months, which begins six months after CP drawdowns the credit for the first time. During the commitment fee calculation period, if the average drawdown amounts are less than 60% of the total loan facility, the commitment fee should be calculated quarterly, using the difference of actual drawdown amounts and 50% of the total loan facility, multiplied by 0.1%, the annual fee rate, and then pay the managing bank every three months.

(19) Pensions

A. Defined benefit plans: Employee contributions
(a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contribution to cover the deficit by next March.
(b) The amounts recognised in the balance sheet are determined as follows:

	December	31,2019	December	31,2018
Present value of defined benefit obligations	($	398,989)	($	394,170)
Fair value of plan assets		176,945		187,285
Net defined benefit liability	($	222,044)	($	206,885)

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(c) Movements in net defined benefit liabilities are as follows:

	Present value of	Present value of
		defined benefit		Fair value of		Net defined
		obligations		planassets	benefitliability
Year ended December 31, 2019
Balance at January 1	($	394,170)	$	187,285	($	206,885)
Current service cost	(	2,482)		-	(	2,482)
Interest (expense) income	(	4,039)		1,952	(	2,087)
Past service cost	(	5,288)		-	(	5,288)
	(	405,979)		189,237	(	216,742)
Remeasurements:
Return on plan assets (excluding
amounts included in interest
income or expense)		-		6,476		6,476
Change in demographic
assumptions	(	1,540)		-	(	1,540)
Change in financial assumptions	(	10,577)		-	(	10,577)
Experience adjustments	(	9,670)		-	(	9,670)
	(	21,787)		6,476	(	15,311)
Pension fund contribution		-		10,009		10,009
Paid pension		28,777	(	28,777)		-
Balance at December 31	($	398,989)	$	176,945	($	222,044)
	Present value of
		defined benefit		Fair value of		Net defined
		obligations		planassets	benefitliability
Year ended December 31, 2018
Balance at January 1	($	374,673)	$	174,478	($	200,195)
Current service cost	(	2,685)		-	(	2,685)
Interest (expense) income	(	4,407)		2,048	(	2,359)
	(	381,765)		176,526	(	205,239)
Remeasurements:
Return on plan assets (excluding
amounts included in interest
income or expense)		-		5,040		5,040
Change in demographic
assumptions	(	14,581)		-	(	14,581)
Change in financial assumptions	(	5,869)		-	(	5,869)
Experience adjustments		2,157		-		2,157
	(	18,293)		5,040	(	13,253)
Pension fund contribution		-		11,607		11,607
Paid pension		5,888	(	5,888)		-
Balance at December 31	($	394,170)	$	187,285	($	206,885)

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(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2019 and 2018 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.
(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	2019 0.700%~0.750% 2.500%~3.000%	2018
		0.900%~1.125%
		2.500%~3.000%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

obligation is affected. The analysis was as follows:
Increase Decrease 0.25% 0.25% December 31, 2019 Effect on present value of defined benefit obligation 9,395) ($ 9,745 $ December 31, 2018 Effect on present value of defined benefit obligation 9,392) ($ 9,747 $ Discount rate	Future salaryincreases
	Increase Decrease 0.25% 0.25% 9,391 $ 9,103) ($ 9,412 $ 9,120) ($	Decrease 0.25%

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

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The method and assumptions used for the preparation of sensitivity analysis during 2019 and 2018 are the same.

(f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2020 amount to $9,770.
(g) As of December 31, 2019, the weighted average duration of the retirement plan is 9.1~10.9 years. The analysis of timing of the future pension payment was as follows:

Within 1 year 1-2 year(s) 2-5 years Over 5 years	16,171 $ 20,507 80,688 125,710
	243,076 $

B. Defined contribution plans
(a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The overseas subsidiaries of the Company have defined contribution plans.
(c) The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.
(d) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2019 and 2018 were $845,897 and $724,282, respectively.

(20) Share-based payment

A. For the year ended December 31, 2019, CP’s share-based payment arrangements were as follows:

Type of arrangement Treasury stock transferred to employees	Grant date September 27, 2019	Quantity granted 6,377 thousand shares	Contract period -	Vesting conditions
				Vested immediately

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2019

(a) Details of treasury stock transferred to employees are as follows:

No. of options Options outstanding at January 1 - Options granted 6,377 Options exercised 6,377) ( Options outstanding at December 31 - Options exercisable at December 31 -	Weighted-average exercise price (in dollars)
	- $ 64.26 64.26 - -

(b) The fair value of stock options granted on grant date is measured using the closing price on the grant date less the exercise price.
(c) Expenses incurred on share-based payment transactions are shown below:

The aforementioned options were all exercised on October 30, 2019. Equity-settled	2019
	173,052 $

B. For the year ended December 31, 2018, CP’s share-based payment arrangements were as follows:

Type of arrangement Treasury stock transferred to employees	Grant date March 6, 2018	Quantity granted 746 thousand shares	Contract period -	Vesting conditions
				Vested immediately

(a) Details of treasury stock transferred to employees are as follows:

		2018	2018
				Weighted-average
		No. of		exercise price
		options		(indollars)
Options outstanding at January 1		-	$	-
Options granted		746		39.15
Options exercised	(	746)		39.15
Options outstanding at December 31		-		-
Options exercisable at December 31		-		-

(b) For the year ended December 31, 2018, the weighted average stock price of options on the exercise date was NT$61.91 (in dollars).

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(c) CP’s fair value of stock options granted on grant date is measured using the Black-Scholes option-pricing model. Relevant information is as follows:

Type of arrangement Treasury stock transferred to employees	Grant date March 6, 2018	Stock price NTD 61.2	Exercise price NTD 39.15	Expected price volatility (Note)	Expected option life 0.0411	Risk-free Expected interest dividends rate - 0.25%	Fair value perunit
							NTD 22.05

Note: Expected price volatility rate was estimated by using the stock prices of the most recent period with length of this period approximate to the length of the stock options’ expected life, and the standard deviation of return on the stock during this period.
(d) Expenses incurred on share-based payment transactions are shown below:

No such transaction in 2019.

Equity-settled	2018
	16,077 $

(21) Share capital

A. As of December 31, 2019, the Company’s authorised capital was $8,000,000, and the paid-in capital was $7,344,975 with a par value of $10 (in dollars) per share, and the outstanding common stock was 800 million shares.

Movements in the number of the Company’s ordinary shares outstanding are as follows (shares in thousands):

At January 1 Common stock dividends Employee share compensation Treasury stock transferred to employees Shares retired Subsidiary received stock dividends from parent company At December 31	2019 2018 686,640 680,642 - 3,620 4,118 6,155 6,377 - - 3,591) ( - 186) ( 697,135 686,640	2018
		686,640

B. On March 7, 2019, the Company’s Board of Directors approved the employees’ stock bonus amounting to $280,000 at the previous closing price of $68 (in dollars) before the day of the Board of Directors’ meeting, issuing 4,118 thousand shares. The Company has obtained a letter of approval from the appropriate authorities. The issue date was set on April 3, 2019, and the Company had completed the related registration on April 24, 2019.
C. On September 13, 2018, the Company’s Board of Directors during its meeting resolved to purchase treasury shares with the ceiling of 10 million shares to be reissued to employees. As of November 13, 2018 (the expiration of the execution period), the Company has purchased 3,591 thousand treasury shares amounting to $211,419.

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D. The stockholders during their meeting held on June 5, 2018 had approved to issue common stock dividends amounting to $36,199. A total of 3,620 thousand shares had been issued and, the Company has obtained a letter of approval from the appropriate authorities. The issue date was set on July 25, 2018, and the Company had completed the related registration on August 8, 2018.
E. On March 9, 2018, the Company’s Board of Directors approved the employees’ stock bonus amounting to $453,000 at the previous closing price of $73.6 (in dollars) before the day of the Board of Directors’ meeting, issuing 6,155 thousand shares. The Company has obtained a letter of approval from the appropriate authorities. The issue date was set on April 3, 2018, and the Company had completed the related registration on April 23, 2018.
F. Treasury stock
(a) Reason for stocks reacquisition and movements in the number of the Company’s treasury stocks are as follows:

December 31,2019	December 31,2019	December 31,2019
Number of Fair value shares (in Carrying (in dollars) thousands) amount (per share) 21,174 205,795 $ 89.00 $ 16,189 105,482 89.00 37,363 311,277 $ December 31,2018		Fair value (in dollars) (per share)
Number of shares (in thousands) 6,377 21,174 16,189 43,740	Carrying amount 417,307 $ 205,795 105,482 728,584 $	Fair value (in dollars) (per share)
		62.60 $ 62.60 62.60

(b) Pursuant to the R.O.C. Securities and Exchange Law, the number of stocks bought back as treasury stock should not exceed 10% of the number of the Company’s issued and outstanding stocks and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Law, treasury stocks should not be pledged as collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Law, treasury stocks should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.
(e) Details of treasury stock transferred to employees are provided in Note 6(20).

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(22) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

A summary of the Company’s capital surplus as of December 31, 2019 and 2018 is as follows:

Share premium Treasury share transactions Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Others	December31,2019 3,527,510 $ 1,589,835 421,988 573,501 1,171 6,114,005 $	December31,2018
		3,288,686 $ 1,283,533 533,586 526,957 1,171
		5,633,933 $

(23) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses, if any; and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the total capital stock balance and as special reserve in accordance to relevant regulations when necessary; and the remainder, if any, to be appropriated shall be presented by the Board of Directors and resolved by the stockholders at the stockholders’ meeting.
B. The Company’s dividend policy is summarised below: the Company is in the development of electronics industry, the dividend policy should be formulated by achieving both targets that supply the new products capital requirement and increase the return on shareholders’ investment. Therefore, the total dividend each year cannot be above of the total distributable earnings, and the cash dividend cannot be less than 90% of the total dividend paid. The ratio is restricted until the total distributable common stock dividends reach $0.5 per share.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

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D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. The Company elected to reclassify the unrealised revaluation increment and cumulative translation adjustment to unappropriated earnings and accrue special reserve by $433,524 on initial application of IFRSs.
E. The appropriations of 2018 and 2017 earnings had been resolved at the shareholders’ meeting on June 5, 2019 and June 7, 2018, respectively, and the details are summarised below:

Years ended December 31,	Years ended December 31,	Years ended December 31,
Dividends per share Amount (in dollars) 359,071 $ 1,244,101 - - $ 2,766,858 3.80 2018	2017
Amount 359,071 $ 1,244,101 - 2,766,858	Amount 402,153 $ 1,427,780 36,199 3,221,684	Dividends per share (in dollars)
		0.05 $ 4.45

F. Subsequent events: The appropriations of 2019 earnings had been proposed at the Board of Directors’ meeting on March 10, 2020. However, the appropriations of earnings for 2019 has not yet been resolved by the shareholders’ in 2020. Details are summarised below:

Legal reserve Special reserve Cash dividends	Year ended December 31,2019	Year ended December 31,2019
	Amount 583,882 $ 185,424 4,362,816	Dividends per share (in dollars)
		5.90 $

As of March 10, 2020, the aforementioned appropriations of 2019 earnings has not yet been resolved by the shareholders.

G. For the information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(30).

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(24) Other equity items

											2019	2019
							Unrealised				gains
				Currency			(losses)				on	Revaluaion
				translation			valuation						increment							Total
At January 1		($		985,814)			($	3,460,880)				$			1,381,667			($		3,065,027)
Revaluation
-Group						-			322,426								-			322,426
-Transfer						-			540,517								-			540,517
Currency translation
differences:
-Group		(		1,121,851)							-						-	(		1,121,851)
-Associates		(			7,726)						-						-	(		7,726)
At December 31		($		2,115,391)			($	2,597,937)				$			1,381,667			($		3,331,661)
											2018
						Available-				Unrealised
		Currency				for-sale			gains (losses)						Revaluaion
		translation			investment					on valuation						increment				Total
At January 1	($	1,009,474)			($	2,203,492)			$			-		$		1,388,279			($	1,824,687)
Effect of
retrospective
application and
restatement				-		2,203,492			(		3,108,883)							-	(	905,391)
At January 1 after
adjustments	(	1,009,474)					-		(		3,108,883)					1,388,279			(	2,730,078)
Revaluation
-Group				-			-		(		395,629)					155,281			(	240,348)
-Tax on Group				-			-					-		(		161,893)			(	161,893)
-Transfer				-			-				43,632							-		43,632
Currency translation
differences:
-Group			22,123				-					-						-		22,123
-Associates				1,537			-					-						-		1,537
At December 31	($	985,814)			$		-		($		3,460,880)			$		1,381,667			($	3,065,027)

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(25) Operating revenue

A. Disaggregation of revenue from contracts with customers

Year ended December 31, 2019 Revenue from contracts with customers Electronic component products Consumer electronic products and other electronic products Others Year ended December 31, 2018 Revenue from contracts with customers Electronic component products Consumer electronic products and other electronic products Others	Taiwan 29,628,437 $ 28,939,447 118,252 58,686,136 $ Taiwan 26,993,734 $ 25,513,774 143,915 52,651,423 $	Mainland China 15,182,514 $ 15,167,507 755,110 31,105,131 $ Mainland China 14,393,349 $ 16,760,396 627,232 31,780,977 $	America 848,791 $ 1,224,949 1,872 2,075,612 $ America 522,734 $ 1,744,214 6,706 2,273,654 $	Europe 244 $ 683,333 1,869 685,446 $ Europe 112 $ 553,041 1,199 554,352 $	Total
					45,659,986 $ 46,015,236 877,103
					92,552,325 $
					Total
					41,909,929 $ 44,571,425 779,052
					87,260,406 $

B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

Contract liabilities	December 31,2019 147,815 $	December 31,2018 145,243 $	January1,2018 166,989 $

C. Contract liability balance at the beginning of 2019 and 2018 was all included in the operating revenue.

(26) Other income

Rental revenue Interest income Dividend income Others	2019 2018 62,634 $ 164,363 $ 62,299 50,882 214,688 231,228 366,647 353,144 706,268 $ 799,617 $ Years ended December 31,
	2019 62,634 $ 62,299 214,688 366,647 706,268 $

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(27) Other gains and losses

		Years ended	December 31,
		2019	2018
Net (loss) gain on financial assets and liabilities	($	529,054)	$	449,292
at fair value through profit or loss - derivative
instruments
Net gain (loss) on financial assets and liabilities
at fair value through profit or loss - others		1,181,949	(	530,390)
Net currency exchange gain (loss)		277,489	(	61,534)
Loss on disposal of property, plant and equipment	(	39,982)	(	15,161)
Gain on disposal of non-current assets held for
sale		645,713		-
Impairment on non-financial assets	(	71,299)		-
Gain on disposal of investments		73,665		-
Gain on fair value adjustment of investment
property		64,552		31,930
Others	(	281,810)	(	129,282)
	$	1,321,223	($	255,145)

(28) Finance costs

		Years ended	December 31,
		2019	2018
Interest expense:
Bank borrowings	$	116,569	$	159,244
Lease liability		16,616		-
Less: Capitalisation of qualifying assets	(	10,054)	(	16,209)
	$	123,131	$	143,035

(29) Expenses by nature

Employee benefit expense Depreciation on property, plant and equipment Amortisation on intangible assets Other non-current assets transferred to expense	Year ended December 31,2019	Year ended December 31,2019	Year ended December 31,2019
	Cost of revenue 7,927,560 $ 1,862,233 3,186 40,843	Operatingexpense 4,804,439 $ 389,637 70,980 65,227	Total
			12,731,999 $ 2,251,870 74,166 106,070

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Year ended December 31,2018	Year ended December 31,2018	Year ended December 31,2018
Cost of revenue Operatingexpense Total 7,474,691 $ 3,812,901 $ 11,287,592 $ 1,741,026 302,486 2,043,512 4,080 74,408 78,488 32,849 24,990 57,839 - 10,119 10,119 Year ended December 31,2019		Total
Cost of revenue Operating expense Total 6,740,424 $ 4,308,037 $ 11,048,461 $ 85,942 174,927 260,869 683,558 172,196 855,754 417,636 149,279 566,915 7,927,560 $ 4,804,439 $ 12,731,999 $ Year ended December 31,2018		Total
		11,048,461 $ 260,869 855,754 566,915
		12,731,999 $
Cost of revenue 6,276,348 $ 78,088 575,269 544,986 7,474,691 $	Operating expense 3,378,625 $ 148,825 154,056 131,395 3,812,901 $	Total
		9,654,973 $ 226,913 729,325 676,381
		11,287,592 $

(30) Employee benefit expense

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 11% for employees’ compensation and shall not be higher than 1% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2019 and 2018, employees’ compensation was accrued at $838,112 and $503,034, respectively; directors’ and supervisors’ remuneration was accrued at $52,070 and $31,252, respectively. The aforementioned amounts were recognised in salary expenses.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 11.74% and 0.73% of distributable profit of current year for the year ended December 31, 2019, respectively. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $838,112 and $52,070, respectively.

Employees’ compensation of $503,034 and directors’ and supervisors’ remuneration of $31,252 for 2018 as resolved at the meeting of Board of Directors were in agreement with those amounts

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recognised in the 2018 financial statements. For the year ended December 31, 2018, 4,118 thousand shares of stock were issued as employee compensation, and the number of shares were calculated based on the closing price of $68 (in dollars) on the day before the Board of Directors’ meeting.

Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(31) Income tax

A. Income tax expense
(a) Components of income tax expense:

		Years ended	December 31,	December 31,
		2019		2018
Current tax:
Current tax on profits for the year	$	1,161,713	$	1,163,272
Tax on undistributed surplus earnings		1,455		-
Prior year income tax over estimation	(	8,582)	(	75,427)
Total current tax		1,154,586		1,087,845
Deferred tax:
Origination and reversal of temporary
differences		231,398	(	20,125)
Impact of change on tax rate		-	(	11,157)
Total deferred tax		231,398	(	31,282)
Income tax expense	$	1,385,984	$	1,056,563

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

Land value increment tax from revaluation Impact of change on tax rate	Year ended December 31,2018
	150,136 $ 11,757
	161,893 $

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B. Reconciliation between income tax expense and accounting profit

		Years ended	December	December	31,
		2019		2018
Tax calculated based on profit before tax and	$	1,560,851	$		1,070,893
statutory tax rate (Note)
Effect from items adjusted in accordance
with tax regulation	(	157,740)			61,097
Effect from investment tax credits	(	10,000)			-
Prior year income tax overestimation	(	8,582)	(		75,427)
Undistributed earnings		1,455			-
Income tax expense	$	1,385,984	$		1,056,563

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate.

C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

				2019
				Recognised in
		January1		profit or loss		December31
Temporary differences:
-Deferred tax assets:
Provision for inventory price	$	24,741	$	17,252	$	41,993
decline
Unrealised accrued expenses		21,699		30,740		52,439
Unrealised compensation
revenue		42,940		549		43,489
Others		8,578		5,840		14,418
	$	97,958	$	54,381	$	152,339
-Deferred tax liabilities:
Fair value adjustment of	($	284,860)	($	109,391)	($	394,251)
investment property
Unrealised exchange gain	(	10,003)	(	98,545)	(	108,548)
Temporary differences of
fixed assets for tax and
financial purposes	(	2,241)		103	(	2,138)
Others	(	450)	(	77,946)	(	78,396)
	($	297,554)	($	285,779)	($	583,333)

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2018

							Recognised in
			Recognised in			other comprehensive
		January1		profit	or loss		income	December 31
Temporary differences:
-Deferred tax assets:	$	17,987	$		6,754	$	-	$	24,741
Provision for inventory price
decline		76	(		76)		-		-
Allowance for doubtful
accounts in excess of tax
limit		66,357	(		44,658)		-		21,699
Unrealised accrued expenses		45,088	(		2,148)		-		42,940
Unrealised compensation
revenue		565	(		565)		-		-
Impairment loss
Fair value adjustment of
investment property		22,500	(		22,500)		-		-
Others		9,723	(		1,145)		-		8,578
	$	162,296	($		64,338)	$	-	$	97,958
-Deferred tax liabilities:
Fair value adjustment of
investment property	($	122,899)	($		68)	($	161,893)	($	284,860)
Unrealised exchange gain	(	104,967)			94,964		-	(	10,003)
Temporary differences
of fixed assets for tax
and financial purposes	(	2,943)			702		-	(	2,241)
Others	(	472)			22		-	(	450)
	($	230,809)	$		95,598	($	161,893)	($	297,554)

D. On December 31, 2018, expiration dates of unused net operating loss carryforward and amounts of unrecognised deferred tax assets of domestic subsidiaries are as follows, and the Company disposed this subsidiary in 2019:

December 31, 2018

Year incurred 2010 2011 2012 2013 2014 2015 2016 2017	Amount filed/ assessed 13,233 $ 12,688 10,162 8,559 7,873 14,500 7,867 1,188	Unused amount 13,233 $ 12,688 10,162 8,559 7,873 14,500 7,867 1,188	Unrecognised deferred tax assets 13,233 $ 12,688 10,162 8,559 7,873 14,500 7,867 1,188	Expiry year
				2020 2021 2022 2023 2024 2025 2026 2026

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E. As of December 31, 2019 and 2018, the amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

December 31, 2019 December 31, 2018 Deductible temporary differences $ 1,057,760 $ 1,338,526

F. The Company’s income tax returns through 2017 have been assessed and approved by the Tax Authority.

(32) Earnings per share

Year	ended December 31,2019	ended December 31,2019
Amount after tax 5,838,817 $ - 5,838,817 $ Year	Weighted average number of ordinary Earnings per shares outstanding share (shares in thousands) (in dollars) 691,107 8.45 $ 10,149 701,256 8.33 $ ended December 31,2018	Earnings per share (in dollars)
		8.45 $
		8.33 $
Amount after tax 3,590,711 $ - 3,590,711 $	Weighted average number of ordinary shares outstanding (shares in thousands) 688,299 9,164 697,463	Earnings per share (in dollars)
		5.22 $
		5.15 $

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The above weighted-average outstanding shares of common stock have been adjusted according to the earnings distribution approved by the Board of Directors and stockholders.

(33) Supplemental cash flow information

Investing activities with partial cash payments

		Years ended	December 31,	December 31,
		2019		2018
Purchase of property, plant and equipment	$	3,029,116	$	2,249,093
Add: Opening balance of payable on equipment		420,262		385,725
Less: Ending balance of payable on equipment	(	468,052)	(	420,262)
Cash paid during the year	$	2,981,326	$	2,214,556

(34) Changes in liabilities from financing activities

				2019	2019	2019
		Short-term	Long-term
		borrowings	borrowings			Lease liability					Total
At January 1	$	5,643,630	$	1,423,180		$	470,130			$	7,536,940
Changes in cash flow from
financing activities	(	4,752,915)	(	1,343,449)	(		93,320)		(		6,189,684)
Impact of changes in foreign
exchange rate		4,285		20,269	(		7,550)				17,004
Changes in other non-cash
items		-		-			113,509				-
At December 31	$	895,000	$	100,000		$	482,769			$	1,477,769
				2018
		Short-term		Long-term
		borrowings		borrowings							Total
At January 1	$	4,246,383		$	1,831,281			$			6,077,664
Changes in cash flow from
financing activities		1,397,247		(		480,000)					917,247
Impact of changes in foreign
exchange rate			-				71,899				71,899
At December 31	$	5,643,630		$	1,423,180			$			7,066,810

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties and relationship
Names of relatedparties	Relationshipwith the Company
Newmax Technology Co., Ltd.	Other related party
Clevo Co.	Other related party
Hongwell	Other related party
Chicony Square	Other related party
Kapok Computer (Kunshan) Co., Ltd.	Other related party
Buynow Group (includinig Loyang, Anshan, Quanzhou,	Other related party
Zhengzhou, etc)
Far win (Kunshan) Co., Ltd.	Other related party
Far win (Dong guan) Co., Ltd.	Other related party
ShunOn Electronic Co.	Other related party
Jiaxing Chunxiang Electronic Technology Co., Ltd.	Other related party
Chongqing Chunxiang Electronic Technology Co., Ltd.	Other related party
Jim Yu Plastic Electronic (Wujiang) Co., Ltd.	Other related party
Cheung Shun (Wujiang) Plastic Processing Technology Co., Ltd. Other related party

(2) Significant related party transactions

A. Operating revenue:

Sales of goods: Other related parties	Years ended December 31,	Years ended December 31,
	2019 926,516 $	2018
		844,038 $

The terms of the sales to related parties were the same as those to third parties.

B. Purchases:

Purchases of goods: Other related parties	Years ended December 31,	Years ended December 31,
	2019 1,625,025 $	2018
		1,688,955 $

The terms of the purchases from related parties were the same as those to third parties.

C. Receivables from related parties:

Accounts receivable: Other related parties	December 31,2019 332,350 $	December 31,2018
		314,182 $

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The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest. There was no allowance for doubtful accounts pertaining to accounts receivable from related parties.

D. Payables to related parties:

Accounts payable: Other related parties	December 31,2019 415,577 $	December 31,2018
		300,503 $

The payables from related parties arise mainly from purchase transactions. The payables are unsecured in nature and bear no interest.

E. Property transactions

Accounts Other related parties Investments accounted for using equity method Other related parties Property, plant and equipment	Years ended December 31,	Years ended December 31,
	2019 Consideration 166,582 $ -	2018
		Consideration
		- $ 243

The consideration of $166,582 paid for acquiring 40% shares in Swift Success Holdings Limited for the year ended December 31, 2019 was determined by reference to the entity’s appraisal report.

F. Dividend income:

(3)	Key management compensation Other related parties	Years ended December 31,	Years ended December 31,
		2019 65,188 $	2018
			54,577 $

Salaries and other short-term employee benefits Termination benefits	Years endedDecember31,	Years endedDecember31,
	2019 338,686 $ 2,143 340,829 $	2018
		307,333 $ 2,691
		310,024 $

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8. PLEDGED ASSETS

(1) The Group’s assets pledged as collateral are as follows:

Pledged asset Refundable deposits (shown as other non- current assets) Property, plant and equipment Investment property (Note)	December31,2019 December31,2018 115,378 $ 100,234 $ 1,092,657 1,214,224 3,076,801 5,029,563 4,284,836 $ 6,344,021 $ Book value	Purpose
	December31,2019 115,378 $ 1,092,657 3,076,801 4,284,836 $
		Deposits and guarantee for plant and operating leases Long-term borrowings and short-term borrowings Long-term borrowings and short-term borrowings

Note: The investment property of $1,956,546, which was measured at fair value on December 31, 2018, was reclassified as ‘non-current assets classified as held for sale, net’ on December 26, 2018.
(2) As of December 31, 2019 and 2018, UNIKEY has pledged the Company’s common stock (shown as “treasury stock”) amounting to 8,500,000 shares, as collateral for loans.
(3) As of December 31, 2019 and 2018, HEC has pledged the Company’s common stock (shown as “treasury stock”) amounting to 12,600,000 shares, as collateral for loans.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

(1) As of December 31, 2019, for bank loans, financing forward exchange contracts, bill purchased and accounts receivable factoring purposes, the Group provided standby promissory notes totaling $43,090,357 as security.
(2) On December 27, 2018, the subsidiaries, Chicony Power Technology (Suzhou) Co., Ltd. and Suzhou Weiye Group Co., Ltd., signed a construction contract amounting to RMB 247,825 thousand ($1,103,069) and the subcontract work will follow the construction schedule. As of December 31, 2019, capital expenditures for the contract but not yet incurred amounted to RMB 83,071 thousand ($357,645).
(3) Apart from item(2) above, the amounts of unpaid payment for construction in progress and acquisition of machinery and equipment are as follows:

December 31, 2019 December 31, 2018 $ 482,846 $ 685,353

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10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

(1) Please see Notes 6(23) and 6(30) for the details on appropriation of the 2019 earnings.
(2) The Group sold partial residential compound building (shown as investment property) in condominium located in Sanchong District, New Taipei City with estimated amount of over $488,820 to the employees of the Group and the qualified related parties.

12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income - designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable (including related parties) Other receivables Guarantee deposits paid	December 31,2019 5,580,208 $ 3,507,472 4,136,522 482,573 153,736 20,516,388 160,242 115,378 34,652,519 $	December 31,2018
		6,310,347 $ 3,778,232 1,952,439 - 360,995 17,929,998 314,508 100,234
		30,746,753 $

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Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable (including related parties) Other accounts payable Long-term borrowings (including current portion) Lease liability	December 31,2019 550,620 $ 895,000 26,342 24,151,967 10,871,450 100,000 482,769 37,078,148 $	December 31,2018
		70,777 $ 5,643,630 1,720 23,014,263 8,307,849 1,423,180 -
		38,461,419 $

B. Financial risk management policies
(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange contracts and foreign exchange swap contracts are used to hedge certain exchange rate risk. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
(b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Note 6(2).
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is

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measured through a forecast of highly probable USD and RMB expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.

iii. The Group hedges exchange rate risk by foreign exchange rate and foreign exchange swap rate. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Note 6(2).
iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, RMB and HKD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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Year ended December 31, 2019	Effect on other	Degree of Effect on comprehensive	variation profit or loss income				1% 170,660 $ - $	1% 368,095 -			1% 358,819 $ - $	1% 222,949 -	1% 10,030 -	Year ended December 31, 2018	Effect on other	Degree of Effect on comprehensive	variation profit or loss income				1% 128,705 $ - $	1% 316,978 -			1% 296,623 $ - $	1% 249,686 -	1% 10,986 -
		Book value	(NTD)				17,065,967 $	36,809,486			35,881,877 $	22,294,939	1,002,994			Book value	(NTD)				12,870,506 $	31,697,757			29,662,305 $	24,968,592	1,098,583
December 31, 2019			Exchange rate				30.0100	6.9693			30.0100	6.9693	29.9500	December 31, 2018			Exchange rate				30.7150	6.8668			30.7150	6.8668	0.0091
	Foreign	currency amount	(In thousands)	(Foreign currency: functional currency)	Financial assets	Monetary items	USD:NTD 568,676 USD	USD:RMB (Note) 1,226,574 USD	Financial liabilities	Monetary items	USD:NTD 1,195,664 USD	USD:RMB (Note) 742,917 USD	USD:THB (Note) 33,422 USD		Foreign	currency amount	(In thousands)	(Foreign currency: functional currency)	Financial assets	Monetary items	USD:NTD 419,030 USD	USD:RMB (Note) 1,031,996 USD	Financial liabilities	Monetary items	USD:NTD 965,727 USD	USD:RMB (Note) 812,912 USD	JPY:USD (Note) 3,930,437 JPY

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Note: The functional currencies of certain subsidiaries belonging to the Group are not NTD, thus, this information has to be considered when reporting. For example, when a subsidiary’s functional currency is RMB, the subsidiary’s segments that are involved with USD have to be taken into consideration.

Total exchange gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2019 and 2018, amounted to $277,489 and ($61,534), respectively.

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic and foreign companies. The prices of fincial instruments would change due to the change of the future value of investee companies. If the prices of these financial instruments had increased/decreased by 1% with all other variables held constant, posttax profit for the years ended December 31, 2019 and 2018 would have increased/decreased by $52,539 and $56,416, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $35,075 and $37,782, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. During the years ended December 31, 2019 and 2018, the Group’s borrowings at variable rate were denominated in the NTD, USD and JPY.

At December 31, 2019 and 2018, if market interest rates had been 0.25% higher with all other variables held constant, other comprehensive income for the years ended December 31, 2019 and 2018 would have been $419 and $4,084 higher, respectively.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost and at fair value through profit or loss.

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ii. According to the Group’s internal management policy, the Group only trades with the good credit bank. According to the credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

iv. The Group classifies customer’s accounts receivable, contract assets and rents receivable in accordance with customer types. The Group applies the simplified approach using provision matrix, loss rate methodology to estimate expected credit loss under the provision matrix basis.
v. According to the Group’s internal management policy, the default occurs when the contract payments are past due over 360 days.
vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

vii.The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable (including related parties). On December 31, 2019 and 2018, the provision matrix is as follows:

December 31, 2019 Not past due 1-30 days past due 31-120 days past due 121-125 days past due Over 360 days past due	Expected lossrate 0%~0.6% 2%~18% 3%~30% 20%~30% 100%	Total book value 20,016,910 $ 323,535 309,054 268 43,398 20,693,165 $	Loss allowance
			28,433 $ 1,276 103,590 80 43,398
			176,777 $

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December 31, 2018 Not past due 1-30 days past due 31-120 days past due 121-125 days past due Over 360 days past due	Expected lossrate 0%~0.6% 2%~18% 3%~30% 20%~30% 100%	Total book value 17,318,148 $ 334,648 441,145 11,453 53,228 18,158,622 $	Loss allowance
			24,132 $ 9,077 139,088 3,099 53,228
			228,624 $

viii. Movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

		2019		2018
		Accounts		Accounts
		receivable		receivable
At January 1	$	228,624	$	101,554
Provision for impairment		-		148,756
Reversal of impairment	(	37,075)		-
Effect of foreign exchange	(	14,772)	(	21,686)
At December 31	$	176,777	$	228,624

ix. Movements in loss allowance for investments in debt instruments carried at amortised cost are as follows:

	December 31,2019
12 months 482,573 $	Significant increase in Impairment credit risk of credit - $ - $ Lifetime	Total
	Significant increase in credit risk - $
		482,573 $

The financial assets at amortised cost held by the Group are expected loss rate unrecognised loss allowance amounted $0.

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.

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ii. Group treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2019 and 2018, the Group held money market position of $10,967,380 and $8,809,544, respectively, that are expected to readily generate cash inflows for managing liquidity risk.

iii.The Group has the following undrawn borrowing facilities:

Floating rate: Expiring within one year Expiring beyond one year	December 31,2019 26,105,280 $ 7,950,000 34,055,280 $	December 31,2018
		19,294,552 $ 8,500,000
		27,794,552 $

iv. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2019 Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable (including related parties) Other payables Lease liability Long-term borrowings (including current portion) Derivative financial liabilities: Financial liabilities at fair value through profit or loss	Less than 1year 895,591 $ 26,342 24,151,967 10,871,450 134,013 - 550,620 $	Over 1year
		- $ - - - 396,820 100,172 - $

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December 31, 2018 Non-derivative financial liabilities Short-term borrowings Notes payable Accounts payable (including related parties) Other payables Long-term borrowings (including current portion) Derivative financial liabilities: Financial liabilities at fair value through profit or loss	Less than 1year 5,648,775 $ 1,720 23,014,263 8,307,849 419,124 70,777 $	Over 1year
		- $ - - - 1,031,220 - $

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks (including emerging stocks), beneficiary certificates and convertible bonds, is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in most derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in certain derivative instruments and investment property is included in Level 3.
B. The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables (including related parties), short-term borrowings, accounts payable and other payables (including related parties) are approximate to their fair values.
C. The related information of financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2019 and 2018 are as follows:

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(a) The related information of the nature of the assets and liabilities is as follows:

December 31, 2019 Assets Recurring fair value measurements Financial assets mandatorily measured at fair value through profit or loss - current Equity securities Debt securities Beneficiary certificates Non-hedging derivatives Forward exchange contracts Financial assets mandatorily measured at fair value through profit or loss-non-current Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income - current Equity securities Financial assets at fair value through other comprehensive income - non-current Equity securities Investment property (Note 1) Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss - current Non-hedging derivatives Forward exchange contracts Exchange rate swaps	Level 1 3,375,279 $ 263,000 220,465 - - 57,240 2,983,854 - - 6,899,838 $ Level 1 - $ - - $	Level 2 - $ - - 63,320 - - - 18,735 - 82,055 $ Level 2 546,310 $ 4,310 550,620 $	Level 3 - $ - - - 862,505 738,399 - 504,883 6,447,876 8,553,663 $ Level3 - $ - - $	Total
				3,375,279 $ 263,000 220,465 63,320 862,505 795,639 2,983,854 523,618 6,447,876
				15,535,556 $
				Total
				546,310 $ 4,310
				550,620 $

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December 31, 2018 Assets Recurring fair value Financial assets mandatorily measured at fair value through profit or loss - current Equity securities Debt securities Beneficiary certificates Non-hedging derivatives Forward exchange contracts Financial assets mandatorily measured at fair value through profit or loss -non-current Equity securities Beneficiary certificates Financial assets at fair value through other comprehensive income - current Equity securities Financial assets at fair value through other comprehensive income - non-current Equity securities Investment property (Note 1) Non-recurring fair value measurements Non-current assets held for sale (Note 2) December 31, 2018 Liabilities Recurring fair value Financial liabilities at fair value through profit or loss - current Non-hedging derivatives Forward exchange contracts Exchange rate swaps	Level 1 3,064,273 $ 318,468 583,594 - - 597,331 2,920,108 - - - 7,483,774 $ Level 1 - $ - - $	Level 2 - $ - - 350,252 - - - 30,813 - - 381,065 $ Level 2 68,161 $ 2,616 70,777 $	Level 3 - $ - - - 638,727 757,702 - 827,311 5,537,730 1,956,546 9,718,016 $ Level3 - $ - - $	Total
				3,064,273 $ 318,468 583,594 350,252 638,727 1,355,033 2,920,108 858,124 5,537,730 1,956,546
				17,582,855 $
				Total
				68,161 $ 2,616
				70,777 $

Note 1: Investment property measured at fair value.

Note 2: Under IFRS 5, assets held for sale must be measured at fair value less costs to sell when the fair value less the cost to sell is lower than the carrying amount.

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(b) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Market quoted price	Listed shares Closing price	Emergingstock Average trades price	Open-end fund Net asset value	Convertible bond
				Closing

D. For the years ended December 31, 2019 and 2018, there was no transfer between Level 1 and Level 2.
E. The following chart is the movement of Level 3 for the years ended December 31, 2019 and 2018:

2018:
				2019
		Beneficiary		Equity
		certificates		instruments		Total
At January 1	$	757,702	$	1,466,038	$	2,223,740
Acquired in the period		17,489		151,164		168,653
Sold in the period		-	(	312,954)	(	312,954)
Recognised in profit or loss	(	25,981)		72,729		46,748
Recognised in other comprehensive
income		-	(	19,467)	(	19,467)
Effect of exchange rate changes	(	10,811)		9,878	(	933)
At December 31	$	738,399	$	1,367,388	$	2,105,787
Movement of unrealised gain or loss
in profit or loss of assets and
liabilities held as at December 31,
2019 (Recorded as non-operating
income and expense)	($	25,981)	$	72,729	$	46,748
				2018
		Beneficiary		Equity
		certificates		instruments		Total
At January 1	$	626,028	$	1,586,751	$	2,212,779
Acquired in the period		79,141		30,182		109,323
Sold in the period		-	(	106,697)	(	106,697)
Recognised in profit or loss		40,160	(	20,369)		19,791
Recognised in other comprehensive
income		-	(	43,809)	(	43,809)
Effect of exchange rate changes		12,373		19,980		32,353
At December 31	$	757,702	$	1,466,038	$	2,223,740
Movement of unrealised gain or loss
in profit or loss of assets and
liabilities held as at December 31,
2019 (Recorded as non-operating
income and expense)	$	40,160	($	20,369)	$	19,791

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Information about the movements of the investment property in Level 3 is provided in Note 6(11).

F. For the years ended December 31, 2019 and 2018, there was no transfer into or out from Level 3.
G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Fair value at December 31, 2019 Non-derivative equity instrument: Unlisted shares 177,890 $ " 1,189,498 Venture capital shares Private equity fund investment 738,399 Investment property 6,447,876 Fair value at December 31, 2018 Non-derivative equity instrument: Unlisted shares 224,870 $ " 1,241,168 Venture capital shares Private equity fund investment 757,702 Investment property 5,537,730 Non-current assets held for sale 1,956,546	Significant Valuation unobservable technique input Market approach Discount for lack of marketability Net asset value N/A Net asset value N/A Income approach Revenue growth rate, Discount rate Significant Valuation unobservable technique input Market approach Discount for lack of marketability Net asset value N/A Net asset value N/A Income approach Revenue growth rate, Discount rate Income approach Revenue growth rate, Discount rate	Range Relationship of (weighted inputs to fair average) value - The higher the discount for lack of marketability, the lower the fair value - N/A - N/A - The higher the revenue growth rate, the higher the fair value; the higher the discount rate, the lower the fair value Range Relationship of (weighted inputs to fair average) value - The higher the discount for lack of marketability, the lower the fair value - N/A - N/A - The higher the revenue growth rate, the higher the fair value; the higher the discount rate, the lower the fair value - The higher the revenue growth rate, the higher the fair value; the higher the discount rate, the lower the fair value

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H. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

Financial assets Equity instrument Beneficiary certificates Financial assets Equity instrument Beneficiary certificates	Input Market approach, Net asset value Net asset value Input Market approach, Net asset value Net asset value	Change ±1% Change ±1% ±1% ±1%	December	Favourable Unfavourable change change - - 5,049 $ 5,049) ($ Favourable Unfavourable change change - - 8,273 $ 8,273) ($ 8,273) ($ 8,273 $ 31,2018 Recognised in other comprehensive income 31,2019 Recognised in other comprehensive income 5,049 $ 5,049) ($
			Favourable Unfavourable change change 7,384 7,384) ( 16,009 $ 16,009) ($ December 8,625 $ Recognised in profit or loss 8,625) ($
			Favourable Unfavourable change change 7,577 7,577) ( 13,964 $ 13,964) ($ 6,387 $ 6,387) ($ Recognised in profit or loss

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 5.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 6.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 7.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 8.

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I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).
J. Significant inter-company transactions during the reporting periods: Please refer to table 9.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 10.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 11.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 13(1).

14. SEGMENT INFORMATION

(1) General information

The Group operates business from a geographic perspective; geographically, the Group currently focuses on wholesale in Taiwan, Mainland China, America, and Europe.

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(2) Measurement of segment information	The Chief Operating Decision-Maker evaluates the performance of the operating segments based on a measure of adjusted EBITDA. Interest income	and expense are not allocated to operating segments, as this type of activity is driven by the Group central treasury, which manages the cash position of	the group. The accounting policies of the operating segments are in agreement with the significant accounting policies summarised in Note 4.	(3) Information about segment profit or loss, assets and liabilities	The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:	Year ended December 31, 2019	Reconciliation	Taiwan Asia America Europe and elimination Total	Revenue from external customers 58,686,136 $ 31,105,131 $ 2,075,612 $ 685,446 $ - $ 92,552,325 $	Inter-segment revenue 1,906,773 96,385,866 15,355,982 4,351 113,652,972) ( -	Segment revenue 60,592,909 $ 127,490,997 $ 17,431,594 $ 689,797 $ 113,652,972) ($ 92,552,325 $	Segment profit 2,394,160 $ 5,143,541 $ 612,683 $ 7,938 $ 543,249 $ 8,701,571 $	Year ended December 31, 2018	Revenue from external customers 52,651,423 $ 31,780,977 $ 2,273,654 $ 554,352 $ - $ 87,260,406 $	Inter-segment revenue 2,051,773 79,534,924 35,145,844 4,861 116,737,402) ( -	Segment revenue 54,703,196 $ 111,315,901 $ 37,419,498 $ 559,213 $ 116,737,402) ($ 87,260,406 $	Segment profit 2,008,705 $ 4,294,780 $ 447,277 $ 6,100) ($ 94,832 $ 6,839,494 $	The adoption of IFRS 16, ‘Leases’, had the following impact on the segment information in 2019.	Taiwan Asia America Europe Total	Depreciation expense increased 29,553 $ 84,105 $ 3,614 $ - $ 117,272 $

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(4) Reconciliation for segment income

The revenue from external customers reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income. A reconciliation of reportable segment profit or loss to the profit before tax and discontinued operations for the years ended December 31, 2019 and 2018 is provided as follows:

			Years ended	December 31,	December 31,
			2019		2018
Reportable segments income		$	8,701,571	$	6,839,494
Related loss not yet classified	(		2,432,106)	(	2,189,958)
Total non-operating income and expenses			1,919,271		385,936
Income before tax from continuing operations		$	8,188,736	$	5,035,472

(5) Information on products and services

Revenue from third parties is mainly derived from the sale of computer peripheral products, consumer electronic products and other electronic products as follows:

Electrical components Consumer and other electronic products Others	Years ended December 31,	Years ended December 31,
	2019 45,659,986 $ 46,015,236 877,103 92,552,325 $	2018
		41,909,929 $ 44,571,425 779,052
		87,260,406 $

(6) Geographical information

Geographical information for the years ended December 31, 2019 and 2018 is as follows:

Non-current Revenue assets 58,686,136 $ 3,462,185 $ 31,105,131 11,163,877 2,075,612 51,398 685,446 861 92,552,325 $ 14,678,321 $ Year ended December 31,2019	Year ended December 31,2018	Year ended December 31,2018
Revenue 58,686,136 $ 31,105,131 2,075,612 685,446 92,552,325 $	Revenue 52,651,423 $ 31,780,977 2,273,654 554,352 87,260,406 $	Non-current assets
		3,416,312 $ 10,309,547 163,144 1,202
		13,890,205 $

The Group’s geographical revenue information is determined based on the area collecting the accounts receivable.

Non-current assets include property, plant and equipment, right-of-use assets, intangible assets and other non-current assets, but excluding financial assets and deferred income tax assets.

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(7) Major customer information

For the years ended December 31, 2019 and 2018, details of revenue from which customers accounted for at least 10% of operating revenues in the consolidated comprehensive income statement are as follows:

A customer	Revenue Segment 10,440,897 $ Asia Year ended December 31,2019	Year ended December 31,2018	Year ended December 31,2018
	Revenue 10,440,897 $	Revenue 6,300,948 $	Segment
			Asia

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Item
Value
Footnote
Collateral
Limit on loans
granted to
a single party
Ceiling on
total loans
granted
Interest
rate
Nature of
loan
Amount of
transactions
with the
borrower
Reason
for short-term
financing
Allowance
for
doubtful
accounts
Maximum
outstanding
balance during
the year ended
December 31, 2019
Balance at
December
31, 2019
Actual amount
drawn down
Table 1
Expressed in thousands of NTD
(Except as otherwise indicated)
No.
Creditor
Borrower
General
ledger
account
Is a related
party

(Note 4)
(Note 5)
(Note 3)
(Note 1,2)
(Note 1,2)
0
The Company
Qun-Jing
Other receivables
Yes
400,000
$ 200,000
$ 192,000
$ 1.00%
2
-
$ Working capital
-
$ -
-
$ 8,180,513
$ 10,907,350
$ -
0
The Company
Quansun
"
"
1,300,000
650,000
603,000
1.00%
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
0
The Company
UNIKEY
"
"
3,200,000
1,600,000
1,251,500
1.00%
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
0
The Company
CET
"
"
627,900
600,200
150,050
1.00%
2
-
"
- -
-
8,180,513
$ 10,907,350
$ -
(USD 20,000)
(USD 20,000)
(USD 5,000)
1
CGI
The Company
"
"
1,004,640
960,320
729,243
2%-2.6%
2
-
"
-
-
-
110,376
US$ 110,376
US$ -
(USD 32,000)
(USD 32,000)
(USD 24,300)
2
COI
CGI
"
"
6,008,925
3,601,200
3,526,465
1%-1.7%
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
(USD 195,000)
(USD 120,000)
(USD 117,510)
2
COI
CET
"
"
94,815
60,020
55,657
1.1%-1.5%
2
-
"
-
-
-
303,020
US$ 303,020
US$ -
(USD 3,000)
(USD 2,000)
(USD 1,855)
2
COI
KUM
"
"
244,000
240,080
207,369
1.00%
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
(USD 8,000)
(USD 8,000)
(USD 6,910)
2
COI
CEM5
"
"
153,800
-
-
-
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
(USD 5,000)
3
Mao-Feng
The Company
"
"
926,850
-
-
-
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
(USD 30,000)
3
Mao-Feng
CGI
"
"
1,011,360
960,320
875,296
1.2%-1.3%
2
-
"
-
-
-
8,180,513
$ 10,907,350
$ -
(USD 32,000)
(USD 32,000)
(USD 29,167)
4
CEM3
Mao-Qun
"
"
351,280
172,240
172,240
2.00%
2
-
"
-
-
-
8,180,513
$ 1,938,379
RMB
-
(RMB 80,000)
(RMB 40,000)
(RMB 40,000)
5
CEM5
CPDG
"
"
520,320
516,720
516,720
1.5%-1.7%
2
-
"
-
-
-
565,610
RMB
565,610
RMB
-
(RMB 120,000)
(RMB 120,000)
(RMB 120,000)
5
CEM5
CEM3
"
"
298,870
279,890
279,890
1.50%
2
-
"
-
-
-
565,610
RMB
565,610
RMB
-
(RMB 65,000)
(RMB 65,000)
(RMB 65,000)
5
CEM5
XAVi Suzhou
"
"
474,228
163,628
86,120
2.00%
2
-
"
-
-
-
226,244
RMB
226,244
RMB
-
(RMB 108,000)
(RMB 38,000)
(RMB 20,000)
6
HOI
CGI
"
"
2,228,153
2,054,515
2,054,515
1%-2%
2
-
"
-
-
-
90,684
US$ 90,684
US$ -
(USD 70,500)
(USD 68,461)
(USD 68,461)
6
HOI
RealYoung
"
"
107,457
102,034
102,034
1.00%
2
-
"
-
-
-
90,684
US$ 90,684
US$ -
(USD 3,400)
(USD 3,400)
(USD 3,400)
6
HOI
HEC
"
"
568,890
501,167
474,158
1.2%-2%
2
-
"
-
-
-
36,273
US$ 36,273
US$ -
(USD 18,000)
(USD 16,700)
(USD 15,800)
7
CP
CPUS
"
"
189,630
180,060
156,052
1.70%
2
-
"
- -
-
3,313,477
$ 3,313,477
$ -
(USD 6,100)
(USD 6,000)
(USD 5,200)
7
CP
CPHK
"
"
1,517,040
1,440,480
1,301,534
1.70%
2
-
"
- -
-
3,313,477
$ 3,313,477
$ -
(USD 48,000)
(USD 48,000)
(USD 43,370)
7
CP
CPTH
"
"
91,500
90,030
360
1.70%
2
-
"
- -
-
3,313,477
$ 3,313,477
$ -
(USD 3,000)
(USD 3,000)
(USD 12)

-235-

Item
Value
Footnote
Collateral
Limit on loans
granted to
a single party
Ceiling on
total loans
granted
Interest
rate
Nature of
loan
Amount of
transactions
with the
borrower
Reason
for short-term
financing
Allowance
for
doubtful
accounts
Maximum
outstanding
balance during
the year ended
December 31, 2019
Balance at
December
31, 2019
Actual amount
drawn down
No.
Creditor
Borrower
General
ledger
account
Is a related
party

(Note 4)
(Note 5)
(Note 3)
(Note 1,2)
(Note 1,2)
7
CP
WTS
Other receivables
Yes
63,210
$ 60,020
$ 34,632
$ 1.70%
2
-
Working capital
-
-
-
3,313,477
$ 3,313,477
$ -
(USD 2,000)
(USD 2,000)
(USD 1,154)
7
CP
CT
"
"
90,000
45,000
27,600
1.5%-1.7%
2
-
"
-
-
-
3,313,477
$ 3,313,477
$ -
8
CPI
CPUS
"
"
173,828
-
-
1.60%
2
-
"
-
-
-
2,485,108
$ 3,313,477
$ -
(USD 5,500)
8
CPI
CPHK
"
"
1,295,805
-
-
1.60%
2
-
"
-
-
-
2,485,108
$ 3,313,477
$ -
(USD 41,000)
8
CPI
WTS
"
"
41,087
-
-
2.00%
2
-
"
-
-
-
75,057
US$ 75,057
US$ -
(USD 1,300)
9
WTS
WT
"
"
44,247
-
-
2.00%
2
-
"
-
-
-
2,049
US$ 2,049
US$ -
(USD 1,400)
10
CPSZ
WTK
"
"
16,553
-
-
1.60%
2
-
"
-
-
-
227,964
RMB
227,964
RMB
-
(RMB 3,600)
10
CPSZ
Zhuzhou Torch
"
"
331,056
-
-
1.60%
2
-
"
-
-
-
227,964
RMB
227,964
RMB
-
Auto Lamp Co., Ltd.
(RMB 72,000)
11
CPDG
Zhuzhou Torch
"
"
257,070
245,442
244,581
1.60%
2
-
"
-
-
-
106,956
RMB
106,956
RMB
-
Auto Lamp Co., Ltd.
(RMB 57,000)
(RMB 57,000)
(RMB 56,800)
11
CPDG
WTK
"
"
16,236
15,502
15,502
1.60%
2
-
"
- -
-
106,956
RMB
106,956
RMB
-
(RMB 3,600)
(RMB 3,600)
(RMB 3,600)
Note 1: In accordance with the financing procedures of the Company, total financing amount should not exceed 40% of the Company’s stockholders’ equity and
a. the total financing amount to any individual party should not exceed 30% of the Company’s stockholders’ equity and the amount of sales/purchase during the year for the purpose of business.
b. the total financing amount to any individual party should not exceed 30% of the Company’s stockholders’ equity for the purpose of loan.
d. except for c., the financing period should not exceed one year.
Note 2: In accordance with the financing procedures of the subsidiary, total financing amount should not exceed 40% of the subsidiary’s stockholders’ equity and
a. the total financing amount to any individual party should not exceed 40% of the subsidiary’s stockholders’ equity for the purpose of short-term financing.
b. the total financing amount to any individual party should not exceed 50% of the subsidiary’s stockholders’ equity and the amount of sales/purchase during the year for the purpose of business.
d. except for c., the financing period should not exceed one year.
Note 3: The numbers filled in the column of ‘Nature of loan are as follows:
(1) The business transaction is ‘1’.
(2) The short-term financing is ‘2’.
Note 4: The maximum balance is the maximum outstanding balance during the year ended December 31, 2019.
Note 5: The ending balance had been approved at the Board of Directors’ meeting.
c. for the purpose of loan between the Company’s foreign subsidiaries or from foreign subsidiaries to the Company, for which the Company both have 100% shares directly or indirectly, the financing amount to single company should not exceed 100% of the subsidiaries' stockholders' equity and 30%
of the company 's stockholders' equity, and the total financing amount should not exceed 100% of the subsidiaries' stockholders' equity and 40% of the company 's stockholders' equity, and the lending period may not exceed 3 years.
c. the limit on the loans to granted between the subsidiary – CP’s foreign subsidiaries or from foreign subsidiaries to the Company for which the subsidiary – CP directly or indirectly holds 100% of its voting shares is not restricted to 40% of the lending company’s
net asset based on the latest audited or reviewed consolidated financial statements. The ceiling on total loans is 40% of CP’s net asset based on the latest audited or reviewed consolidated financial statements. The limit on loans to a single party is 30% of CP’s net
asset based on the latest audited or reviewed consolidated financial statements and the lending period may not exceed 3 years.

-236-

Company
name
Relationship
with the
endorser/
guarantor
Number
Endorser/
guarantor
Footnote
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
Provision of
endorsements/
guarantees to
the party in
Mainland
China
Party being
endorsed/guaranteed
Limit on
endorsements/
guarantees
provided for a
single party
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31, 2019
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
Outstanding
endorsement/
guarantee
amount at
December 31, 2019
Actual amount
drawn down
Table 2
Expressed in thousands of NTD
(Except as otherwise indicated)

(Note 1)
(Note 2,3)
0
The Company
CEZ
3
6,817,094
$ 369,780
$ 360,120
$ 134,496
$ -
1.32%
13,634,188
$ Y
N
N
-
(USD 12,000)
(USD 12,000)
(EUR 4,000)

-237-

			Expressed in thousands of NTD			Fair value Footnote	149,401 $ -	114,412 -	77,679 -	8,910 -	1,006 -	12,760 -	67,014 -	20,515 -	108,140 -		3,000 -	246,080 -	68,672 -	107,820 -	30,000 -	65,746 -		84,060 -		28,620 -	482,102 -	1,351 -	90,007 -	361,785 -	19,825 -	12,758 -	46,427 -
				As of December 31, 2019	Ownership	Book value (%)	149,401 $ 6.50%	114,412 0.67%	77,679 0.77%	8,910 0.58%	1,006 0.17%	12,760 0.15%	67,014 0.60%	20,515 0.27%	108,140 -		3,000 -	246,080 15.38%	68,672 9.38%	107,820 7.41%	30,000 10.71%	65,746 4.37%		84,060 -		28,620 -	482,102 1.96%	1,351 0.43%	90,007 0.72%	361,785 7.91%	19,825 1.87%	12,758 6.03%	46,427 11.67%
						Number of shares	4,922,604	1,243,607	1,134,000	1,100,000	115,000	290,000	2,985,019	485,000	2,000,000		30,000	15,380,000	7,500,000	10,000,000	3,000,000	454,296		9,000,000		9,000,000	13,100,608	304,350	3,727,000	11,708,254	1,406,000	4,224,458	3,500,000
CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES	Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)	December 31, 2019			Relationship with the securities issuer General ledger account		Corporate director Financial assets at fair value through profit or loss - current	" "	- "	- "	- "	- "	- "	- "	- "		- "	Corporate director Financial assets at fair value through profit or loss - non-current	" "	" "	- "	- "		- "		- "	Common chairman Financial assets at fair value through other comprehensive income - current	- "	- "	Corporate director "	" "	- Financial assets at fair value through other comprehensive income - non-current	Corporate director "
						Marketable securities	Laster Tech Corporation Ltd.	Newmax Technology Co., Ltd.	PharmaEngine, Inc.	Aslan Pharmaceuticals Limited	TWi Pharmaceuticals, Inc.	JHL BIOTECH, INC.	Solar Applied Materials Technology Corp.	MOSA INDUSTRIAL CORPORATION	Fuh Hwa Digital Economy Fund	Everlight Electronics Co., Ltd. The sixth unsecured convertible bonds		WK Venture Capital XI	Top Taiwan Venture Capital Group	Chengding Venture Capital Group	Sheng Da Venture Capital Group	Magi Capital Venture Co., Ltd	Fuh Hwa Smart Energy Securities	Investment Trust Fund	Fuh Hwa New Oriental Securities	Investment Trust Fund	Clevo Co.	Genesis Photonics Inc.	AcBel Polytech Inc.	ShunOn Electronic Co.	Alcor Micro,Corp.	Genesis Photonics Inc.	Taipei Tech innoFund
							Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Beneficiary certificate	Bond		Common stock	Common stock	Common stock	Common stock	Preferred stock	Beneficiary certificate		Beneficiary certificate		Common stock	Common stock	Common stock	Common stock	Common stock	Private equity	Common stock
			Table 3			Securities held by	The Company	The Company	The Company	The Company	The Company	The Company	The Company	The Company	The Company	The Company		The Company	The Company	The Company	The Company	The Company	The Company		The Company		The Company	The Company	The Company	The Company	The Company	The Company	The Company
																					-238-

		Footnote	-	-	-	-	-	-	-	-	-	-			-	-	-	-	-		-		-	-	-	-	-	-	-	-	-	Note 2	-	-	Note 3	-	-	-	-	-			-	-	-	-	-	-	-	-	-	-	-	-
		Fair value	131 $	18,777	3,369	11,790	279,587	36,488	22,754	68,100	13,800	1,045		250,000		112,325	20,060	68,672	107,820		19,080		196,140	166,998	47,657	8,402	3,664	13,824	5,977	19,897	418,446	1,440,815	1,731,992	615,664	1,884,513	117,626	482,573	73,204	9,248	280		10,000		434,858	227,095	99,756	17,800	30,009	371,828	4,854	1,484	29,417	7,986	238,392 $
As of December 31, 2019	Ownership	Book value (%)	131 $ 2.35%	18,777 8.21%	3,369 5.78%	11,790 6.96%	279,587 1.64%	36,488 1.59%	22,754 0.03%	68,100 0.10%	13,800 0.16%	1,045 0.18%		250,000 -		112,325 -	20,060 1.00%	68,672 9.38%	107,820 7.41%		19,080 -		196,140 -	166,998 0.68%	47,657 0.20%	8,402 2.70%	3,664 0.02%	13,824 0.13%	5,977 2.83%	19,897 5.00%	418,446 1.70%	1,440,815 2.20%	1,731,992 10.17%	615,664 2.50%	1,884,513 2.88%	117,626 -	482,573 -	73,204 3.18%	9,248 0.09%	280 0.05%		10,000 -		434,858 0.68%	227,095 -	99,756 -	17,800 -	30,009 -	371,828 1.51%	4,854 0.11%	1,484 0.08%	29,417 0.00%	7,986 0.63%	238,392 $ -
		Number of shares	13,125	3,000,000	1,600,000	1,600,000	3,038,983	1,202,252	228,000	200,000	300,000	119,000		2,500,000		2,077,391	1,000,000	7,500,000	10,000,000		6,000,000		21,000,000	4,538,000	920,000	1,892,392	80,000	192,000	1,979,291	1,500,000	11,370,823	16,188,935	18,825,998	16,730,000	21,174,298	122,487	-	2,412,000	135,000	10,000		100,000		8,747	7,682,533	3,324,091	1,022,000	602,373	10,104,000	157,087	248,500	270,000	84,482	10,374,483
	General	ledger account	Financial assets at fair value through other comprehensive income - non-current	"	"	"	Financial assets at fair value through profit or loss - current	"	"	"	"	"		"		"	Financial assets at fair value through profit or loss - non-current	"	"		"		"	Financial assets at fair value through other comprehensive income - current	"	"	"	"	Financial assets at fair value through other comprehensive income - non-current	"	Financial assets at fair value through other comprehensive income - current	"	Financial assets at fair value through profit or loss - current	Financial assets at fair value through other comprehensive income - current	"	Financial assets at fair value through profit or loss – non-current	Financial assets at amortised cost - non-current	Financial assets at fair value through profit or loss - current	"	"		"		"	Financial assets at fair value through profit or loss - non-current	"	"	"	Financial assets at fair value through other comprehensive income - current	"	"	"	"	Financial assets at fair value through other comprehensive income - non-current
	Relationship with the securities issuer		-	-	-	-	Corporate director	"	-	-	-	-			-	-	Corporate director	"	"		-		-	Common chairman	-	-	-	"	-	Corporate director	Common chairman	The Company	Corporate director	Common chairman	The Company	-	-	Corporate director	-	-			-	-	-	-	-	-	Common chairman	Corporate director	-	-	-	-
		Marketable securities	Maxima Ventures I, Inc.	Maxima Ventures II, Inc.	Taiwan Cultural and Creative Co., Ltd.	MKD Technology Inc.	Newmax Technology Co., Ltd.	Laster Tech Corporation Ltd.	Powertech Technology Inc.	Phison Electronics Corp.	Apex International Co., Ltd.	TWi Pharmaceuticals, Inc.	Everlight Electronics Co., Ltd.		The sixth unsecured convertible bonds	Fuh Hwa Digital Economy Fund	WK Venture Capital XI	Top Taiwan Venture Capital Group	Chengding Venture Capital Group	Fuh Hwa New Oriental Securities	Investment Trust Fund	Fuh Hwa Smart Energy Securities	Investment Trust Fund	Clevo Co.	Kinsus Interconnect Technology Corp.	Genesis Photonics Inc.	Cheng Uei Precision Industry Co., Ltd.	FLYTECH TECHNOLOGY CO., LTD.	Genesis Photonics Inc.	Taipei Tech innoFund	Clevo Co.	The Company	Newmax Technology Co., Ltd.	Clevo Co.	The Company	PRP CE1 BC1 Inc.	PRP CE1 BC1 Inc.	Laster Tech Corporation Ltd.	PharmaEngine, Inc.	GOMAJI Corp., LTD	Everlight Electronics Co., Ltd.		The sixth unsecured convertible bonds	Q Technology (Group) Company Limited	WRV II, L.P	MagiCapital Fund II, L.P.	New Riders L.P.	SmartSens Technology Co.,Ltd	Clevo Co.	ShunOn Electronic Co.	Alpha Professional Holdings Limited	CTBC Securities Co., Ltd.	Merrimack Pharmacenticals, Inc.	SAGA-CHINA
			Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Bond			Beneficiary certificate	Common stock	Common stock	Common stock	Beneficiary certificate		Beneficiary certificate		Common stock	Common stock	Common stock	Common stock	Common stock	Private equity	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Preferred stock	Bond	Common stock	Common stock	Common stock	Bond			Common stock	Beneficiary certificate	Beneficiary certificate	Beneficiary certificate	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Preferred stock
		Securities held by	The Company	The Company	The Company	The Company	CP	CP	CP	CP	CP	CP	CP			CP	CP	CP	CP	CP		CP		CP	CP	CP	CP	CP	CP	CP	HEC	HEC	UNIKEY	UNIKEY	UNIKEY	CGI	CGI	COI	COI	COI	COI			COI	COI	COI	COI	COI	COI	COI	COI	COI	COI	COI
																									-239-

Number of shares
Book value
Ownership
(%)
Fair value
Footnote
Securities held by
Relationship with the
securities issuer
General
ledger account
As of December 31, 2019
Marketable securities

CPI
Common stock
Q Technology (Group) Co., Ltd.
-
Financial assets at fair value through profit or loss - current
700,000
34,800
0.06%
34,800
-
CPI
Beneficiary certificate
WRV II, L.P
-
Financial assets at fair value through profit or loss - non-current
3,841,266
113,548
-
113,548
-
CPI
Common stock
Anxin-China Holdings Limited
-
Financial assets at fair value through other comprehensive income - current
8,300,000
-
0.27%
-
-
Quansun
Common stock
New Hung Kuan Enterprise Co., Ltd
-
Financial assets at fair value through other comprehensive income - non-current
8,140,000
166,100
21.71%
166,100
Note 4
Quansun
Common stock
Clevo Co.
Common chairman
Financial assets at fair value through other comprehensive income - current
7,100,000
261,280
1.06%
261,280
-
Qun-Jing
Common stock
Clevo Co.
"
"
2,100,000
77,280
0.31%
77,280
-
XAVi
Common stock
Chicony Power Technology Co., Ltd.
Affiliated company
Financial assets at fair value through profit or loss - current
2,961,160
185,961
0.77%
185,961
-
XAVi
Common stock
Laster Tech Corporation Ltd.
Corporate director
"
1,036,738
31,465
1.37%
31,465
-
XAVi
Beneficiary certificate
Fuh Hwa New Oriental Securities
Investment Trust Fund
"
Financial assets at fair value through other comprehensive income - non-current
3,000,000
9,540
-
9,540
-

-240-

Number of
shares
Amount
Number of
shares
Amount
Number of
shares
Selling price
Book value
Gain (loss) on
disposal
Number of
shares
Amount
Addition (Note 3)
Disposal (Note 3)
Balance as at December 31, 2019
(Note 4)
Investor
Marketable
securities
General ledger
account
Counterparty
Relationship
with
the investor
Balance as at
January 1, 2019
Table 4
Expressed in thousands of NTD
(Except as otherwise indicated)

(Note 2)
(Note 2)
The Company
Fuh Hwa Securities
Investment Trust Fund
Financial assets at fair value
through profit or loss - non-
current
Fuh Hwa Securities
Investment Trust Fund
-
19,802,524
471,102
$ -
-
$ 19,802,524
495,702
$ 621,007
$ 125,305)
($ -
-
$ CGI
PRP CE1 BC1 Inc.
Financial assets at amortised
cost - non-current
PRP CE1 BC1 Inc.
-
-
-
$ -
498,303
$ -
-
$ -
$ -
$ -
498,303
$ Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.
Note 2: It is applicable to disclosure information when marketable securities were recognized as "investments accounted for using equity method".
Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.
Note 4: It refers to the initial costs without considering the amortisation or valuation of exchange rate at the end of the year.

-241-

						Other	commitments	None				"
If the counterparty is a related party, information as		to the last transaction of the real estate is disclosed below:	Reason for	Original owner Relationship acquisition of	Relationship who sold the between the original Date of the Basis or real estate and	Real estate Real estate Transaction Status of with the real estate to owner and the original reference used in status of the real	acquired by acquired Date of the event amount payment Counterparty counterparty the counterparty acquirer transaction Amount setting the price estate	CPSZ Construction 2018/12/27 $ 1,103,069 709,310 $ Suzhou Weiye Group None - - - $ - Contract Plant	in process (Date of contract (RMB 247,825 Co., Ltd. (For the Purpose	signing) thousand) of Conducting	Business)	The Company Investment 2019/7/31 839,561 $ 376,095 $ Kunfu Construction " - - - - Price Residential	property Co., Ltd. etc. comparison and compound	price negotiation building	Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate acquired should be appraised pursuant to the regulations.	Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity	attributable to owners of the parent in the calculation.	Note 3: Date of the event referred to herein is the date of contract signing date, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary	amount of the transaction, whichever is earlier.
															-242-

Real estate disposed
by
Real estate
Transaction date
or date of the
event
Date of
acquisition
Basis or reference used in setting the
price
Disposal amount
Status of
collection of
proceeds
Gain (loss)
on disposal
Counterparty
Relationship with the
seller
Reason for
disposal
Book value
Other
commitments Hikari
Non-current assets
held for sale
The contract was
signed on
December 26,
2018 and it was
transferred on
January 9, 2019
2015/1/28
1,956,546
$ $ 2,605,512
(JPY9,500,000
thousand)
All proceeds have
been collected
645,713
$ Kyushu Railway
Company
None
To cooperate
with future
operating plan of
the Group
Valuation agency：Cushman &
Wakefield Limited
Valuation amount：JPY7,020,000
thousand
Valuation agency：Savills Limited
Valuation amount：JPY7,060,000
thousand
None
The Company
Investment property From December
10, 2019 to
December 24,
2019 (as of
December 31,
2019, it was not
yet transferred)
2016/2/25
1,266,082
$ 1,279,562
$ Proceeds of
$192,801 have
been collected
$ 13,480
(Estimated)
The Group's
employees that are
still in service
The Group's
employees that are
still in service
Employees’
housing
purchased by the
employees
Valuation agency: Panasia Limited
Valuation amount: $1,255,392
Valuation agency: Colliers international
Limited
Valuation amount: $1,275,823
None
Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate disposed of should be appraised pursuant to the regulations.
Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity
attributable to owners of the parent in the calculation.
Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the
monetary amount of the transaction, whichever is earlier.

-243-

Purchases
(sales)
Amount
Percentage of
total purchases
(sales)
Credit term
Unit price
Credit term
Balance
Percentage of
total notes/accounts
receivable (payable)
Footnote
Purchaser/seller
Counterparty
Relationship with the
counterparty (Note 3)
Transaction
Differences in transaction
terms compared to third
party transactions
Notes/accounts receivable (payable)
(Except as otherwise indicated)
Expressed in thousands of NTD
Table 7 The Company
CEM2
Subsidiary owned by COI
Purchases
8,907,899
$ 38
30~60 days
Note 1
30~60 days
13,665,270)
($ 59
-
CEM2
The Company
The parent company of COI
Sales
8,907,899)
(
40
30~60 days
Note 2
30~60 days
13,665,270
99
-
The Company
CEM3
Subsidiary owned by Mao-Feng
Purchases
7,585,918
32
30~60 days
Note 1
30~60 days
5,625,590)
(
24
-
CEM3
The Company
The parent company of COI
Sales
7,585,918)
(
41
30~60 days
Note 2
30~60 days
5,625,590
68
-
The Company
CEM5
Subsidiary owned by COI
Purchases
218,733
1
30~60 days
Note 1
30~60 days
73,541)
(
-
-
CEM5
The Company
The parent company of COI
Sales
218,733)
(
5
30~60 days
Note 2
30~60 days
73,541
5
-
The Company
Mao-Ray
Subsidiary owned by Real Young
Purchases
4,517,159
19
30~60 days
Note 1
30~60 days
3,398,726)
(
15
-
Mao-Ray
The Company
The parent company of COI
Sales
4,517,159)
(
74
30~60 days
Note 2
30~60 days
3,398,726
94
-
CGI
CEM3
Affiliated company
Sales
346,807)
(
1
60~90 days
Note 2
60~90 days
-
-
-
CEM3
CGI
Affiliated company
Purchases
346,807
2
60~90 days
Note 1
60~90 days
-
-
-
CGI
CAI
Affiliated company
Sales
751,188)
(
3
60~90 days
Note 2
60~90 days
401,984
6
-
CAI
CGI
Affiliated company
Purchases
751,188
100
60~90 days
Note 1
60~90 days
401,984)
(
100
-
CGI
CEZ
Affiliated company
Sales
450,778)
(
2
60~90 days
Note 2
60~90 days
54,068
1
-
CEZ
CGI
Affiliated company
Purchases
450,778
62
60~90 days
Note 1
60~90 days
54,068)
(
57
-
CEM2
CGI
Affiliated company
Sales
13,078,447)
(
59
60~90 days
Note 2
60~90 days
-
-
-
CGI
CEM2
Affiliated company
Purchases
13,078,447
55
60~90 days
Note 1
60~90 days
-
-
-
Mao-Ray
CGI
Affiliated company
Sales
1,112,214)
(
18
60~90 days
Note 2
60~90 days
-
-
-
CGI
Mao-Ray
Affiliated company
Purchases
1,112,214
5
60~90 days
Note 1
60~90 days
-
-
-
CEM3
CGI
Affiliated company
Sales
6,699,379)
(
36
60~90 days
Note 2
60~90 days
1,138,489
14
-
CGI
CEM3
Affiliated company
Purchases
6,699,379
28
60~90 days
Note 1
60~90 days
1,138,489)
(
52
-
CEM5
CGI
Affiliated company
Sales
2,837,209)
(
64
60~90 days
Note 2
60~90 days
1,048,121
70
-
CGI
CEM5
Affiliated company
Purchases
2,837,209
12
60~90 days
Note 1
60~90 days
1,048,121)
(
48
-
Mao-Ray
CEM2
Affiliated company
Sales
156,984)
(
1
60~90 days
Note 2
60~90 days
115,212
2
-
CEM2
Mao-Ray
Affiliated company
Purchases
156,984
17
60~90 days
Note 1
60~90 days
115,212)
(
16
-
CEM3
CEM5
Affiliated company
Sales
184,777)
(
1
60~90 days
Note 2
60~90 days
-
-
-
CEM5
CEM3
Affiliated company
Purchases
184,777
5
60~90 days
Note 1
60~90 days
-
-
-

-244-

Purchases
(sales)
Amount
Percentage of
total purchases
(sales)
Credit term
Unit price
Credit term
Balance
Percentage of
total notes/accounts
receivable (payable)
Footnote
Purchaser/seller
Counterparty
Relationship with the
counterparty (Note 3)
Transaction
Differences in transaction
terms compared to third
party transactions
Notes/accounts receivable (payable) Qun-Yang
CEM3
Affiliated company
Sales
124,596)
($ 100
60~90 days
Note 2
60~90 days
26,221
$ 100
-
CEM3
Qun-Yang
Affiliated company
Purchases
124,596
1
60~90 days
Note 1
60~90 days
26,221)
(
-
-
CPSZ
CEM3
Affiliated company
Sales
502,751)
(
3
90 days
Note 2
90 days
291,460
5
-
CEM3
CPSZ
Affiliated company
Purchases
502,751
3
90 days
Note 1
90 days
291,460)
(
5
-
CP
CEM3
Affiliated company
Sales
680,203)
(
1
90 days
Note 2
90 days
485,253
-
-
CEM3
CP
Affiliated company
Purchases
680,203
4
90 days
Note 1
90 days
485,253)
(
8
-
CP
CEM2
Affiliated company
Sales
747,776)
(
2
90 days
Note 2
90 days
210,086
3
-
CEM2
CP
Affiliated company
Purchases
747,776
4
90 days
Note 1
90 days
210,086)
(
4
-
CP
CEM5
Affiliated company
Sales
295,779)
(
1
90 days
Note 2
90 days
200,609
-
-
CEM5
CP
Affiliated company
Purchases
295,779
8
90 days
Note 1
90 days
200,609)
(
17
-
CPI
CEM3
Affiliated company
Sales
462,023)
(
3
90 days
Note 2
90 days
-
3
-
CEM3
CPI
Affiliated company
Purchases
462,023
3
90 days
Note 1
90 days
-
-
-
CPI
CEM5
Affiliated company
Sales
289,923)
(
2
90 days
Note 2
90 days
-
1
-
CEM5
CPI
Affiliated company
Purchases
289,923
8
90 days
Note 1
90 days
-
-
-
CP
CPUS
Affiliated company
Sales
1,024,656)
(
3
90 days
Note 2
90 days
409,201
5
-
CPUS
CP
Affiliated company
Purchases
1,024,656
100
90 days
Note 1
90 days
409,201)
(
100
-
CPI
CP
Affiliated company
Sales
12,800,291)
(
93
45 days
Note 2
45 days
1,464,316
92
-
CP
CPI
Affiliated company
Purchases
12,800,291
59
45 days
Note 1
45 days
1,464,316)
(
14
-
CP
CEZ
Affiliated company
Sales
270,875)
(
1
90 days
Note 2
90 days
41,230
-
-
CEZ
CP
Affiliated company
Purchases
270,875
37
90 days
Note 1
90 days
41,230)
(
43
-
CPDG
CP
Affiliated company
Sales
5,448,640)
(
39
90 days
Note 2
90 days
2,377,120
77
-
CP
CPDG
Affiliated company
Purchases
5,448,640
15
90 days
Note 1
90 days
2,377,120)
(
23
-
CPDG
CPI
Affiliated company
Sales
4,858,322)
(
60
45 days
Note 2
45 days
-
-
-
CPI
CPDG
Affiliated company
Purchases
4,858,322
36
45 days
Note 1
45 days
-
-
-
CPSZ
CP
Affiliated company
Sales
7,461,190)
(
37
45 days
Note 2
45 days
4,527,265
85
-
CP
CPSZ
Affiliated company
Purchases
7,461,190
17
45 days
Note 1
45 days
4,527,265)
(
43
-
CPSZ
CPI
Affiliated company
Sales
6,034,179)
(
59
45 days
Note 2
45 days
-
9
-
CPI
CPSZ
Affiliated company
Purchases
6,034,179
44
45 days
Note 1
45 days
-
20
-
CPCQ
CP
Affiliated company
Sales
3,078,550)
(
33
45 days
Note 2
45 days
1,949,480
79
-
CP
CPCQ
Affiliated company
Purchases
3,078,550
8
45 days
Note 1
45 days
1,949,480)
(
19
-
CPCQ
CPI
Affiliated company
Sales
2,644,660)
(
53
45 days
Note 2
45 days
-
6
-
CPI
CPCQ
Affiliated company
Purchases
2,644,660
19
45 days
Note 1
45 days
-
7
-

-245-

Purchases
(sales)
Amount
Percentage of
total purchases
(sales)
Credit term
Unit price
Credit term
Balance
Percentage of
total notes/accounts
receivable (payable)
Footnote
Purchaser/seller
Counterparty
Relationship with the
counterparty (Note 3)
Transaction
Differences in transaction
terms compared to third
party transactions
Notes/accounts receivable (payable) CPCQ
CPSZ
Affiliated company
Sales
872,312)
($ 13
60 days
Note 2
60 days
261,583
$ 14
-
CPSZ
CPCQ
Affiliated company
Purchases
872,312
7
60 days
Note 1
60 days
261,583)
(
6
-
GSE
CPSZ
Affiliated company
Sales
256,007)
(
28
60 days
Note 2
60 days
86,377
22
-
CPSZ
GSE
Affiliated company
Purchases
256,007
2
60 days
Note 1
60 days
86,377)
(
1
-
GSE
CPDG
Affiliated company
Sales
381,428)
(
44
60 days
Note 2
60 days
119,982
50
-
CPDG
GSE
Affiliated company
Purchases
381,428
5
60 days
Note 1
60 days
119,982)
(
4
-
GSE
CPCQ
Affiliated company
Sales
130,869)
(
16
60 days
Note 2
60 days
33,388
-
-
CPCQ
GSE
Affiliated company
Purchases
130,869
3
60 days
Note 1
60 days
33,388)
(
-
-
Systemax
XAVi
Affiliated company
Sales
736,222)
(
100
45~180 days
Note 2
45~180 days
277,549
100
-
XAVi
Systemax
Affiliated company
Purchases
736,222
41
45~180 days
Note 1
45~180 days
277,549)
(
92
-
XAVi Suzhou
Systemax
Affiliated company
Sales
733,114)
(
50
45~180 days
Note 2
45~180 days
-
-
-
Systemax
XAVi Suzhou
Affiliated company
Purchases
733,114
57
45~180 days
Note 1
45~180 days
-
-
-
XAVi Suzhou
XAVi
Affiliated company
Sales
1,034,799)
(
35
45~180 days
Note 2
45~180 days
169,994
-
-
XAVi
XAVi Suzhou
Affiliated company
Purchases
1,034,799
97
45~180 days
Note 1
45~180 days
169,994)
(
-
-
CEM3
Newmax
Affiliated company
Purchases
206,116
1
60~90 days
Note 1
60~90 days
40,259)
(
1
-
CEM3
KAPOK
Other related party
Sales
491,115)
(
3
60 days
Note 2
60 days
206,145
2
-
CEM3
JiaXing ShunOn
Other related party
Purchases
168,823
1
60~90 days
Note 1
60~90 days
44,631)
(
1
-
CEM3
Farwin (Kun Shan) Co., Ltd.
Other related party
Purchases
335,389
2
60~90 days
Note 1
60~90 days
49,667)
(
1
-
CEM3
ShunOn Electronic Co.
Other related party
Purchases
393,317
2
60~90 days
Note 1
60~90 days
107,401)
(
3
-
CEM5
ShunOn Electronic Co.
Other related party
Purchases
330,217
9
60~90 days
Note 1
60~90 days
37,434)
(
3
-
CP
KAPOK
Other related party
Sales
429,059)
(
1
60 days
Note 2
60 days
116,100
2
-
Note 1: Purchases from related parties were basically the same as those from third parties.
Note 2: Sales to related parties were basically the same as those to third parties.

-246-

Amount
Action taken
Amount collected
subsequent to the
balance sheet date
Allowance for
doubtful accounts
Creditor
Counterparty
Relationship
with the counterparty
Balance as at
December 31, 2019
Turnover rate
Overdue receivables
CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES
Receivables from related parties reaching $100 million or 20% of paid-in capital or more
December 31, 2019
Expressed in thousands of NTD
(Except as otherwise indicated)
Table 8 Accounts receivable
The Company
CEM3
Subsidiary owned by Mao-Feng
138,588
$ 3.58
-
$
-
-
$
-
$
CEM2
The Company
The parent company of COI
13,665,270
0.73
-
-
-
-
MR
The Company
The parent company of COI
3,398,726
1.21
-
-
-
-
MR
CEM2
Subsidiary owned by COI
115,212
2.73
-
-
-
-
CEM3
The Company
The parent company of COI
5,625,590
1.38
-
-
-
-
CEM3
KAPOK
Other related party
206,145
2.71
-
-
-
-
CEM3
CGI
Affiliated company
1,138,489
8.61
-
-
-
-
CGI
CAI
Affiliated company
401,984
1.79
-
-
-
-
CEM5
CGI
Affiliated company
1,048,121
3.23
-
-
-
-
CP
CEM2
Affiliated company
210,086
2.90
-
-
-
-
CP
CEM3
Affiliated company
485,253
2.80
-
-
-
-
CP
CEM5
Affiliated company
200,609
2.95
-
-
-
-
CPSZ
CEM3
Affiliated company
291,460
2.55
-
-
-
-
CP
CPUS
Affiliated company
409,201
2.50
-
-
-
-
CP
KAPOK
Other related party
116,100
3.60
-
-
-
-
CPI
CP
Affiliated company
1,464,316
2.97
-
-
-
-
CPDG
CP
Affiliated company
2,377,120
4.58
-
-
-
-
CPSZ
CP
Affiliated company
4,527,265
3.30
-
-
-
-
CPCQ
CP
Affiliated company
1,949,480
3.16
-
-
-
-
CPCQ
CPSZ
Affiliated company
261,583
3.61
-
-
-
-
GSE
CPDG
Affiliated company
119,982
2.90
-
-
-
-
Systemax
XAVi
Affiliated company
277,549
2.11
-
-
-
-
XAVi Suzhou
XAVi
Affiliated company
169,994
12.17
-
-
-
-
Other receivable
The Company
UNIKEY
Subsidiary owned by the Company
1,255,811
$ -
-
$
-
-
$
-
$
The Company
Qun-Jing
Subsidiary owned by HEC
192,626
-
-
-
-
-
The Company
Quansun
Subsidiary owned by HEC
604,982
-
-
-
-
-
The Company
CET
Subsidiary owned by the Company
151,659
-
-
-
-
-
The Company
Real Young
Subsidiary owned by COI
582,932
-
-
-
-
-
The Company
CGI
Subsidiary owned by the Company
233,937
-
-
-
-
-
COI
CGI
Affiliated company
3,665,910
-
-
-
-
-
COI
KUM
Affiliated company
207,686
-
-
-
-
-
CGI
The Company
Affiliated company
730,905
-
-
-
-
-
CGI
CEM2
Affiliated company
6,437,757
-
-
-
-
-
CGI
Mao-Ray
Affiliated company
1,688,101
-
-
-
-
-
Mao-Feng
The Company
The Company
699,543
-
-
-
-
-
Mao-Feng
CGI
Affiliated company
1,398,722
-
-
-
-
-
Real Young
Mao-Ray
Affiliated company
333,998
-
-
-
-
-
CEM2
CET
Affiliated company
242,149
-
-
-
-
-
CEM3
Mao-Qun
Affiliated company
173,348
-
-
-
-
-
CEM5
CEM3
Affiliated company
291,686
-
-
-
-
-
CEM5
XAVi Suzhou
Affiliated company
87,103
-
-
-
-
-
CP
CPHK
Affiliated company
1,314,328
-
-
-
-
-
CP
CPUS
Affiliated company
157,726
-
-
-
-
-
CPDG
Zhuzhou Torch
Affiliated company
246,518
-
-
-
-
-
HOI
CGI
Affiliated company
2,149,721
-
-
-
-
-
HOI
Real Young
Affiliated company
105,689
-
-
-
-
-
HOI
HEC
Affiliated company
492,314
-
-
-
-
-

-247-

1.76	1.02	2.36	9.01	5.13	9.62	19.13	14.13	8.20	7.87	7.24	1.59	3.07	1.47	4.88	4.76	1.20	1.96	1.11	1.84	13.83	2.05	3.01	8.06	6.34	6.52	3.33	2.73	2.86	5.89
Note 5	Note 5	Note 7	Note 7	Note 5	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 5	Note 4	Note 5	Note 4	Note 4	Note 5	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4
$ 1,255,811	730,905	1,688,101	6,437,757	3,665,910	8,907,899	13,665,270	13,078,447	7,585,918	5,625,590	6,699,379	1,138,489	2,837,209	1,048,121	4,517,159	3,398,726	1,112,214	1,398,722	1,024,656	1,314,328	12,800,291	1,464,316	2,149,721	7,461,190	4,527,265	6,034,179	3,078,550	1,949,480	2,644,660	5,448,640
Other receivables-related party	Other receivables-related party	Other receivables-related party	Other receivables-related party	Other receivables-related party	Sales	Accounts receivable-related party	Sales	Sales	Accounts receivable-related party	Sales	Accounts receivable-related party	Sales	Accounts receivable-related party	Sales	Accounts receivable-related party	Sales	Other receivables-related party	Sales	Other receivables-related party	Sales	Accounts receivable-related party	Other receivables-related party	Sales	Accounts receivable-related party	Sales	Sales	Accounts receivable-related party	Sales	Sales
1	2	3	3	3	2	2	3	2	2	3	3	3	3	2	2	3	3	3	3	3	3	3	3	3	3	3	3	3	3
UNIKEY	The Company	Mao-Ray	CEM2	CGI	The Company	The Company	CGI	The Company	The Company	CGI	CGI	CGI	CGI	The Company	The Company	CGI	CGI	CPUS	CPHK	CP	CP	CGI	CP	CP	CPI	CP	CP	CPI	CP
The Company	CGI	CGI	CGI	COI	CEM2	CEM2	CEM2	CEM3	CEM3	CEM3	CEM3	CEM5	CEM5	Mao-Ray	Mao-Ray	Mao-Ray	Mao-Feng	CP	CP	CPI	CPI	HOI	CPSZ	CPSZ	CPSZ	CPCQ	CPCQ	CPCQ	CPDG
0	1	1	1	2	3	3	3	4	4	4	4	5	5	6	6	6	7	8	8	9	9	10	11	11	11	12	12	12	13

-248-

3.33	5.25	1.12
Note 4	Note 4	Note 4
$ 2,377,120	4,858,322	1,034,799
Accounts receivable-related party	Sales	Sales
3	3	3
CP	CPI	XAVi
CPDG	CPDG	XAVi-Suzhou
13	13	14

-249-

Balance
as at December
31, 2019
Balance
as at December 31,
2018
Number of shares
Ownership
(%)
Book value
Investor
Investee
Location
Main business
activities
Initial investment amount
Shares held as at December 31, 2019
Net profit (loss)
of the investee for
the year ended
December
31, 2019
Investment
income (loss)
recognised by the
Company
for the year
ended December
31, 2019
Footnote

The Company
COI
BVI
(1) Sales of computer peripherals
(2) Management of overseas acquisitions &
investments
265,326
$ 265,326
$ 1,000
100.00%
22,800,344
$ 2,614,435
$ 2,616,094
$ Subsidiary
CET
Thailand
Manufacturing and sales of computer peripherals
441,408
33,920
4,323,384
70.73%
230,756
61,342)
(
38,838)
(
Subsidiary
UNIKEY
Taiwan R.O.C.
Manufacturing and sales of computer peripherals
150,000
150,000
90,000,000
100.00%
1,204,078
579,200
498,738
Subsidiary
HOI
BVI
(1) Sales of computer peripherals
(2) Management of overseas acquisitions &
investments
412,003
412,003
12,560,000
100.00%
2,721,424
38,031
38,031
Subsidiary
HEC
Taiwan R.O.C.
Sales of switching power supplies and other
electronic parts
2,330
2,330
4,660,000
100.00%
322,053)
(
78,858
17,340
Subsidiary
XAVi
Taiwan R.O.C.
Researching, manufacturing and selling the DSL
bridges and routers
251,153
241,426
45,642,270
45.94%
358,188
179,600
80,479
Subsidiary
CGI
Malaysia
Sales of computers and computer peripherals
33,027
33,027
1,000,000
100.00%
2,987,312
572,919)
(
291,753)
(
Subsidiary
CP
Taiwan R.O.C.
(1) Research, manufacture and sales of switching
power supply, other electronic parts and equipment,
and lamps
(2) Smart building system business
1,486,300
1,398,798
188,409,594
49.28%
3,146,608
1,720,487
833,695
Subsidiary
UNIKEY
Real Young
BVI
(1) Sales of computer peripherals
(2) Management of overseas acquisitions &
investments
41,490
41,490
1,275,000
13.95%
111,229
12,082
-
Sub-
subsidiary
COI
CAI
U.S.A
Sales of computers and computer peripherals
97,533
97,533
3,250,000
100.00%
89,340
848)
(
-
(USD 3,250)
(USD 3,250)
CAGI
U.S.A
Internet solution for E-Commerce solution
93,181
93,181
12,400,000
100.00%
1,253)
(
46)
(
-
(USD 3,105)
(USD 3,105)
Mao-Feng
BVI
(1) Sales of computer peripherals
68,843
68,843
2,294,000
100.00%
10,114,270
863,377
-
(2) Management of overseas acquisitions &
investments
(USD 2,294)
(USD 2,294)
CET
Thailand
Manufacturing and sales of computer peripherals
234,781
234,781
1,789,141
29.27%
95,532
61,285)
(
-
(USD 7,823)
(USD 7,823)
KUM
Samoa
(1) Sales of computer peripherals
68,164
68,164
2,284,142
100.00%
186,182)
(
12,408)
(
-
(2) Management of overseas acquisitions &
investments
(USD 2,271)
(USD 2,271)
CEZ
Czech Republic
Sales of computers and computer peripherals
197
197
-
100.00%
256,484
12,220
-
(USD 7)
(USD 7)
GFI
Cayman Islands
(1) Sales of computer peripherals
71,776
71,776
2,310,000
60.00%
186,187)
(
15,775)
(
-
(2) Management of overseas acquisitions &
investments
(USD 2,392)
(USD 2,392)
Real Young
BVI
(1) Sales of computer peripherals
242,247
242,247
7,864,780
86.05%
694,443
86,608
-
(2) Management of overseas acquisitions &
investments
(USD 8,072)
(USD 8,072)
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary

-250-

Balance
as at December
31, 2019
Balance
as at December 31,
2018
Number of shares
Ownership
(%)
Book value
Investor
Investee
Location
Main business
activities
Net profit (loss)
of the investee for
the year ended
December
31, 2019
Investment
income (loss)
recognised by the
Company
for the year
ended December
31, 2019
Footnote

COI
CEJ
Japan
Sales of computers and computer peripherals
2,844
$ 2,844
$ -
100.00%
10,873
$ 910
$ -
$ (USD 95)
(USD 95)
Hikari Investment GK
Japan
Investment holdings
-
898,439
-
0.00%
-
657,766
-
(USD 29,938)
Swift Success Holdings limited
Samoa
Investment holdings
160,925
-
-
40.00%
184,258
84,207
-
(USD 5,362)
CP
CPH
BVI
Investment holdings
326,350
326,350
10,000,000
100.00%
5,318,754
1,383,105
-
CP
CPTH
Thailand
38,171
-
3,800,000
100.00%
36,396
1,761)
(
(THB 38,000)
CPH
CPI
Cayman Islands
300,100
300,100
10,000,000
100.00%
5,631,168
1,383,066
-
(USD 10,000)
(USD 10,000)
CPI
CPUS
U.S.A
39,523
39,523
1,500,000
100.00%
48,621
21,517
-
(USD 1,317)
(USD 1,317)
CPHK
Hong Kong
Research and development center
330,612
330,612
46,800,000
100.00%
3,915,378
1,201,885
-
(HKD 85,800)
(HKD 85,800)
WitsLight Technology
Samoa
270,090
270,090
10,000,000
78.13%
120,424
11,870)
(
-
(USD 9,000)
(USD 9,000)
WTS
WT
Taiwan R.O.C.
Design, research and development of LED lighting
modules and international trade
-
5,000
-
0.00%
-
67,205
-
Sub-
subsidiary
CT
Taiwan R.O.C.
Design, researching and developing and sales of
automotive and motorcycle lamps and other
components
3,000
3,000
300,000
100.00%
31,202)
(
7,772)
(
-
Sub-
subsidiary
Kuang Mao
Sky-Fine
Samoa
Sales of computers and computer peripherals
74,813
74,813
310,423
29.00%
21,264
35,445)
(
-
(USD 2,493)
(USD 2,493)
HEC
Quansun
Taiwan R.O.C.
Investment holdings
80,000
80,000
8,000,000
100.00%
174,106)
(
4,074
-
Sub-
subsidiary
Qun-Jung
Taiwan R.O.C.
Manufacturing and sales of computer peripherals
1,000
1,000
100,000
100.00%
114,945)
(
85
-
Sub-
subsidiary
CP
Taiwan R.O.C.
(1) Research, manufacture and sales of switching
power supply, other electronic parts and equipment,
and lamps
(2) Smart building system business
54,811
54,811
1,200,000
0.31%
57,125
1,720,487
-
Subsidiary
XAVi
Directmax
BVI
Management of overseas
332,791
332,791
7,750,000
100.00%
426,057
88,897
-
(USD 10,250)
(USD 10,250)
Directmax
XAVi Overseas
BVI
Management of overseas
324,942
324,942
7,500,000
100.00%
116,683
109,828
-
(USD 10,000)
(USD 10,000)
Systemax
BVI
Sales of DSL bridges and routers
7,849
7,849
250,000
100.00%
309,374
20,931)
(
-
(USD 250)
(USD 250)
Note: The amount of NTD exchanged from foreign currency in the table were exchanged with the exchange rate at financial reporting date except profit or loss was exchanged with the average exchange rate from January 1, 2019 to December 31, 2019.
Investments
accounted for
under equity
method
Sales of switching power supplies and other
electronic parts
Sub-
subsidiary
Sales of switching power supplies and other
electronic parts
Sales of switching power supplies and other
electronic parts
Sub-
subsidiary
Design, research and development, manufacturing
and sales of LED lighting modules and investment
holdings
Investments
accounted for
under equity
method
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary
Sub-
subsidiary

-251-

Remitted to
Mainland
China
Remitted
back
to Taiwan
Book value of
investments in
Mainland China
as of December
31, 2019
Footnote
Accumulated
amount
of investment
income
remitted back
to
Taiwan as of
December 31,
2019
Investment income
(loss) recognised
by the Company
for the year ended
December 31, 2019
Investee in
Mainland China
Main business activities
Paid-in capital
Investment
method
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of January 1,
2019
Accumulated
amount
of remittance
from Taiwan to
Mainland China
as of December
31, 2019
Ownership
held by
the
Company
(direct or
indirect)
Net income of
investee for the
year ended
December 31,
2019
Amount remitted from
Taiwan to
Mainland China/
Amount remitted back
to Taiwan for the year
ended December 31, 2019

(Note 1)
(Note 1,4)
Chicony Electronics (Dong Guan)
Co., Ltd.
Manufacturing and sales of computer peripherals
322,150
$ 2
317,555
$ -
$ -
$ 317,555
$ 198,541
$ 100%
198,541
$ (2)B
3,888,283
$ -
$ (2)A
Chicony Electronics (Suzhou)
Co., Ltd.
Manufacturing and sales of computer peripherals
967,558
2
329,424
-
-
329,424
432,109
100%
432,109
(2)B
8,347,504
-
(2)C
Chicony Electronics (Chong-Qing)
Co., Ltd.
Manufacturing and sales of computer peripherals
435,788
2
-
-
-
-
398,018
100%
398,018
(2)B
2,435,761
-
(2)A
Mao-Ray Electronics (Dong Guan)
Co., Ltd.
Manufacturing of electronic parts, keyboards and
plastic products
277,530
2
236,374
-
-
236,374
104,733
100%
104,733
(2)B
694,443
-
(2)B
Suzhou Mao-Qun Electronics Co., Ltd.
Manufacturing of electronic parts, keyboards and
plastic products
124,911
2
93,661
-
-
93,661
14,332)
(
60%
8,599)
(
(2)B
164,179)
(
-
(2)D and
Note 4
Suzhou Qun-Yang Electronics Co., Ltd.
Manufacturing of electronic parts, keyboards and
plastic products
4,804
2
-
-
-
-
12,234)
(
60%
7,340)
(
(2)B
43,805)
(
-
(2)D and
Note 4
XAVi Technology (Suzhou) Co., Ltd.
Manufacturing and sales of DSL bridges
324,942
2
324,942
-
-
324,942
109,828
45.94%
50,455
(2)B
54,477
-
(2)G and
Note 4
Chicony Power Technology (Dong Guan)
Co., Ltd.
Manufacturing and sales of switching power
supplies and other electronic parts
593,135
2
286,935
-
-
286,935
187,633
49.59%
93,047
(2)B
570,877
-
(2)F and
Note 4
Chicony Power Technology (Suzhou)
Co., Ltd.
Manufacturing and sales of switching power
supplies and LED lighting equipment
1,297,467
2
194,245
-
-
194,245
683,093
49.59%
338,746
(2)B
1,216,751
-
(2)F and
Note 4
Quang Sheng Electronics (Nangchang)
Co., Ltd.
Manufacturing of switching power supplies and
other electronics parts
131,175
2
97,602
-
-
97,602
8,634
49.59%
3,751
(2)B
111,446
-
(2)F and
Note 4
(Note 2)

-252-

(Note 1)
(Note 1,4)
(Note 2)
Chicony Power Technology (Chong Qing)
Co., Ltd.
Manufacturing and sales of switching power
supplies and LED lighting equipment
301,744
$ 2
-
$ -
$ -
$ -
$ 371,801
$ 49.59%
184,376
$ (2)B
592,985
$ -
$ (2)F and
Note 4
Chicony Energy Saving Technology
(Shanghai) Co., Ltd.
Sales of LED lighting equipment
44,379
2
-
-
-
-
4,045)
(
49.59%
2,006)
(
(2)B
23,357
-
(2)F and
Note 4
Chicony Power Technology Trading
(Dong Guan) Co., Ltd.
Importing and exporting of switching power
supplies, LED lighting equipment, and other
electronic parts and smart building system
business
10,491
2
-
-
-
-
778)
(
49.59%
386)
(
(2)B
180)
(
-
(2)F and
Note 4
Chicony Power Technology Trading
(Taizhou) Co., Ltd.
Researching and developing,
manufacturing, sales, installation, aftersale,
and advisory services of electric
machinery, electric frequency device and
industry automation equipment;
manufacturing and sales of electrical
machinery and components; import and
export of goods and technique
90,030
2
-
-
-
-
4,189)
(
49.59%
2,077)
(
(2)B
42,050
-
(2)F and
Note 4
WitsLight Technology (Kunshan) Co., Ltd. Manufacturing and sales of LED lighting
modules
331,859
2
-
-
-
-
21,259)
(
38.74%
8,236)
(
(2)B
70,850
-
(2)H and
Note 4
Zhuzhou Torch Auto Lamp Co., Ltd.
Production and sales of automotive and
motorcycle components, electric machine and
device, lamps and plastic products
228,654
2
-
-
-
-
10,506
38.74%
4,070
(2)B
73,741
-
(2)H and
Note 4

-253-

-254-

Separate Financial Report Audited by the CPA in 2018

CHICONY ELECTRONICS CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT

ACCOUNTANTS DECEMBER 31, 2019 AND 2018

-255-

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of CHICONY ELECTRONICS CO., LTD.

Opinion

We have audited the accompanying parent company only balance sheets of Chicony Electronics Co., Ltd. (the “Company”) as at December 31, 2019 and 2018, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent accountants (refer to “Other matter”), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 2018 and its financial performance and its 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 generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, 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 of the current period. 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, we do not provide a separate opinion on these matters.

-256-

Key audit matters for the Company’s parent company only financial statements of the current period are stated as follows:

Valuation of inventory

Description

Refer to Notes 4(10), 5(2) and 6(6) for the description of accounting policy, critical accounting estimates, uncertainty of assumptions and details of accounts.

The Company's main inventories are keyboard, camera modules and other electronic products. The prices of such inventories are affected by market demand and the rapid technological changes. Therefore, there is a higher risk of market decline. As the assessment of net realisable value of inventories is subject to management judgement, we consider the valuation of inventory as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Assessed whether the Company's accounting policies comply with the relevant standards and the Company’s industry practice and the reasonableness of management’s evaluation process, including the determination of net realisable value of inventories, the sales expenses and the judgement of obsolete inventories. Checked whether the provision policies were consistently adopted in the reporting periods.
Obtained net realisable value statement of inventories to confirm whether the calculation logic is adopted consistently, and tested the data sources of selected samples which includes inventory price or purchase price to verify the net realisable value used by the management was comply with its policies, and recalculated the accuracy of allowance for inventory valuation losses.

Appropriateness of warehouse operating revenue cut-off

Description

For the accounting policies on revenue recognition, critical accounting assumptions and the content － of revenue for the investments accounted for under the equity method of the Company Chicony Power Technology Co., Ltd., and its subsidiaries (the “CP Group”), refer to Notes 4(32) and 6(25) of consolidated financial report.

-257-

The CP Group’s revenue arises from sales of goods, consisting mainly of factory direct shipment and warehouse sales income. Warehouse sales revenue is recognised when the goods are dispatched from the warehouses (transfer of control of products) and it is based on the reports and other relevant information provided by the warehouse custodians. The CP Group’s warehouses are located in multiple countries, and the revenue recognition process involves several manual operations. Thus, we determine the warehouse sales income cut-off as one of the key areas of focus for this fiscal year’s audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

We evaluated the internal controls for regular reconciliation between the CP Group and its warehouse custodians.
We performed the revenue recognition cut-off tests, including obtaining sufficient appropriate audit evidences from the warehouse custodians and reviewing the reconciliations of the Group’s accounting records.
We conducted warehouse inventory audit by using physical counts or using confirmation letters to validate inventory balances with the warehouse custodians.

Other matter - Scope of the audit

We did not audit the investment profit or loss and disclosed information in Note 13 of certain investments accounted for under the equity method that are included in the parent company only financial statements. The balances of there investments accounted for under the equity method were NT$391,199 thousand and NT$389,899 thousand, constituting 0.68% and 0.74% of total assets as of December 31, 2019 and 2018, respectively. Total comprehensive income (including the share of profit (loss) of subsidiaries, associates and joint ventures accounted for under the equity method and share of other comprehensive income (loss) of subsidiaries, associates and joint ventures accounted for under the equity method) were NT$1,300 thousand and NT$1,551 thousand, constituting 0.03% and 0.05% of total comprehensive income for the years ended December 31, 2019 and 2018, respectively. Investment profit or loss and disclosed information in Note 13 were based on the financial statement of said subsidiaries which were audited by other auditors, whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the reports of other auditors.

-258-

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 supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditor’s 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 auditor’s 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 ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from error or fraud 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.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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.

-259-

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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 auditor’s 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 auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
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.
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 company 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 supervisors all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

-260-

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 of the current period and are therefore the key audit matters. We describe these matters in our auditor’s 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.

Chen, Ching Chang

[Weng, Shih-Jung ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 10, 2020

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

-261-

CHICONY ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4)(5) 7 7 6(6) 6(2) 6(3) 6(7) 6(8) and 8 6(9) 6(10) and 8 8	December 31, 2019 `$` `731,671` `562,837` `955,070` `11,312` `4,767,780` `207,537` `19,447` `3,042,035` `1,481,580` `145,101` `11,924,370` `630,998` `93,252` `33,448,710` `1,930,484` `118,350` `8,961,010` `14,676` `63,967` `45,261,447` `$` `57,185,817`	December 31, 2018
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Financial assets at fair value through other comprehensive income - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventories, net 1410 Prepayments 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1550 Investments accounted for using equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			`$` `121,874` `986,614` `893,492` `51,882` `2,525,669` `317,910` `38,828` `4,059,442` `1,479,927` `136,392`
			`10,612,030`
			`1,020,365` `114,809` `30,603,858` `1,968,170` `-` `8,047,823` `18,179` `32,882`
			`41,806,086`
			`$` `52,418,116`

(Continued)

-262-

CHICONY ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity Notes
December 31, 2019
December 31, 2018
6(11)
$
600,000
$
3,130,000
6(20)
-
2,696
3,663
-
339,224
233,468
7
22,764,220
20,322,425
6(12)
2,871,159
1,947,829
7
1,483,765
1,201,425
423,460
498,551
19,058
-
205,568
11,764
28,710,117
27,348,158
6(26)
600,137
376,130
99,878
-
6(14)
167,496
151,675
6(7)
339,814
463,998
1,207,325
991,803
29,917,442
28,339,961
6(16)
7,344,975
7,303,799
6(17)
6,114,005
5,633,933
6(18)
4,976,270
4,617,199
3,105,405
1,861,304
9,370,658
8,455,531
6(19)
(
3,331,661) (
3,065,027)
6(16)
(
311,277) (
728,584)
27,268,375
24,078,155
9
11
$
57,185,817
$
52,418,116

Current liabilities
2100
Short-term borrowings
2130
Contract liabilities
2150
Notes payable
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
2220
Other payables - related parties
2230
Income tax liabilities
2280
Lease liabilities - current
2300
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2570
Deferred income tax liabilities
2580
Lease liabilities - non-current
2640
Accrued pension liabilities
2670
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total Liabilities
Equity
Share capital
3110
Share capital - common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3500
Treasury stocks
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

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

-263-

CHICONY ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items YearendedDecember31
Notes
2019
2018
6(20) and 7
$
28,369,842
$
24,501,048
6(6) and 7
(
23,025,149) (
20,328,397)
5,344,693
4,172,651
6(23)(24) and 7
(
1,474,127) (
1,475,396)
(
1,011,759) (
786,790)
(
1,260,835) (
897,476)
2,956
(
1,637)
(
3,743,765) (
3,161,299)
1,600,928
1,011,352
6(21)
342,988
311,224
6(22)
593,035
(
861,999)
6(25)
(
38,995) (
42,750)
6(7)
3,753,786
3,323,140
4,650,814
2,729,615
6,251,742
3,740,967
6(26)
(
412,925) (
150,256)
$
5,838,817
$
3,590,711
6(14)
( $
10,988) ($
3,128)
6(8)
-
155,281
(
403,682) (
262,624)
723,953
(
138,020)
-
(
161,893)
309,283
(
410,384)
(
1,121,851)
22,123
(
7,726)
1,537
(
1,129,577)
23,660
( $
820,294) ($
386,724)
$
5,018,523
$
3,203,987
6(27)
$
8.45
$
5.22
$
8.33
$
5.15

4000
Sales revenue
5000
Operating costs
5950
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Impairment gain (loss) determined in
accordance with IFRS 9
6000
Total operating expenses
6900
Operating profit
Non-operating income and expenses
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit of associates and joint
ventures accounted for using equity
method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311
Losses on remeasurements of defined
benefit plans
8312
Gains on revaluation
8316
Unrealised losses from investments in
equity instruments measured at fair value
through other comprehensive income
8330
Share of other comprehensive income
(loss) of associates and joint ventures
accounted for using equity method
8349
Income tax related to components of
other comprehensive income that will not
be reclassified to profit or loss
8310
Other comprehensive income (loss)
that will not be reclassified to profit
or loss
Components of other comprehensive
income that will be reclassified to profit
or loss
8361
Exchange differences on translation of
foreign operations
8380
Share of other comprehensive (loss)
income of associates and joint ventures
accounted for using equity method
8360
Other comprehensive (loss) income
that will be reclassified to profit or
loss
8300
Other comprehensive loss for the year
8500
Total comprehensive income for the year
Earnings per share (in NT dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

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

-264-

							Total equity		`23,793,637`	`45,188 )`	`23,748,449`	`3,590,711`	`386,724 )`	`3,203,987`		`-`	`-`	`-`	`3,221,684 )`	`453,000`	`211,419 )`	`165,439`		`134,690 )`		`73,905`		`-`	`1,168`	`24,078,155`		`24,078,155`	`5,838,817`	`820,294 )`	`5,018,523`		`-`	`-`	`2,766,858 )`	`280,000`	`581,629`	`141,980`		`46,544`		`111,598 )`		`-`	`27,268,375`
									`$`	`(`			`(`						`(`		`(`			`(`						`$`		`$`		`(`					`(`							`(`			`$`
							Treasury stocks		`($` `517,165 )`	`-`	`(` `517,165 )`	`-`	`-`	`-`		`-`	`-`	`-`	`-`	`-`	`(` `211,419 )`	`-`		`-`		`-`		`-`	`-`	`($` `728,584 )`		`($` `728,584 )`	`-`	`-`	`-`		`-`	`-`	`-`	`-`	`417,307`	`-`		`-`		`-`		`-`	`($` `311,277 )`
						Asset revaluation	increment		`$` `1,388,279`	`-`	`1,388,279`	`-`	`(` `6,612 )`	`(` `6,612 )`		`-`	`-`	`-`	`-`	`-`	`-`	`-`		`-`		`-`		`-`	`-`	`$` `1,381,667`		`$` `1,381,667`	`-`	`-`	`-`		`-`	`-`	`-`	`-`	`-`	`-`		`-`		`-`		`-`	`$` `1,381,667`
Retained Earnings Other Equity Interest	Unrealised gains	(losses) from	financial assets	Financial statements measured at fair	translation value through other	Unappropriated differences of foreign comprehensive	Capital surplus Legal reserve Special reserve retained earnings operations income		`$` `5,136,660` `$` `4,215,046` `$` `433,524` `$` `9,144,208` `($` `1,009,474 )` `($` `2,203,492 )`	`-` `-` `-` `860,203` `-` `(` `905,391 )`	`5,136,660` `4,215,046` `433,524` `10,004,411` `(` `1,009,474 )` `(` `3,108,883 )`	`-` `-` `-` `3,590,711` `-` `-`	`-` `-` `-` `(` `8,143 )` `23,660` `(` `395,629 )`	`-` `-` `-` `3,582,568` `23,660` `(` `395,629 )`		`-` `402,153` `-` `(` `402,153 )` `-` `-`	`-` `-` `1,427,780` `(` `1,427,780 )` `-` `-`	`-` `-` `-` `(` `36,199 )` `-` `-`	`-` `-` `-` `(` `3,221,684 )` `-` `-`	`391,451` `-` `-` `-` `-` `-`	`-` `-` `-` `-` `-` `-`	`165,439` `-` `-` `-` `-` `-`		`(` `134,690 )` `-` `-` `-` `-` `-`		`73,905` `-` `-` `-` `-` `-`		`-` `-` `-` `(` `43,632 )` `-` `43,632`	`1,168` `-` `-` `-` `-` `-`	`$` `5,633,933` `$` `4,617,199` `$` `1,861,304` `$` `8,455,531` `($` `985,814 )` `($` `3,460,880 )`		`$` `5,633,933` `$` `4,617,199` `$` `1,861,304` `$` `8,455,531` `($` `985,814 )` `($` `3,460,880 )`	`-` `-` `-` `5,838,817` `-` `-`	`-` `-` `-` `(` `13,143 )` `(` `1,129,577 )` `322,426`	`-` `-` `-` `5,825,674` `(` `1,129,577 )` `322,426`		`-` `359,071` `-` `(` `359,071 )` `-` `-`	`-` `-` `1,244,101` `(` `1,244,101 )` `-` `-`	`-` `-` `-` `(` `2,766,858 )` `-` `-`	`238,824` `-` `-` `-` `-` `-`	`164,322` `-` `-` `-` `-` `-`	`141,980` `-` `-` `-` `-` `-`		`46,544` `-` `-` `-` `-` `-`		`(` `111,598 )` `-` `-` `-` `-` `-`		`-` `-` `-` `(` `540,517 )` `-` `540,517`	`$` `6,114,005` `$` `4,976,270` `$` `3,105,405` `$` `9,370,658` `($` `2,115,391 )` `($` `2,597,937 )`
						Share capital -	common stock		`$` `7,206,051`	`-`	`7,206,051`	`-`	`-`	`-`		`-`	`-`	`36,199`	`-`	`61,549`	`-`	`-`		`-`		`-`		`-`	`-`	`$` `7,303,799`		`$` `7,303,799`	`-`	`-`	`-`		`-`	`-`	`-`	`41,176`	`-`	`-`		`-`		`-`		`-`	`$` `7,344,975`
							Notes			3			6(19)		6(18)																			6(19)		6(18)				6(16)
								Year ended December 31, 2018	Balance at January 1, 2018	Effect of retrospective application and restatement	Balance at January 1 after adjustments	Profit for 2018	Other comprehensive income (loss) for 2018	Total comprehensive income (loss) for 2018	Appropriations of 2017 earnings	Legal reserve	Special reserve	Stock dividends	Cash dividends	Employees’ stock dividends	Purchase of treasury shares	Cash dividends paid to the subsidiaries	Difference between proceeds from addition and disposal of subsidiary	and book value	Adjustments to share of changes in equity of associates and joint	ventures	Disposal of financial assets at fair value through other comprehensive	income	Others (overdue dividends)	Balance at December 31, 2018	Year ended December 31, 2019	Balance at January 1, 2019	Profit for 2019	Other comprehensive income (loss) for 2019	Total comprehensive income (loss) for 2019	Appropriations of 2018 earnings	Legal reserve	Special reserve	Cash dividends	Employees’ of stock dividends	Transfer treasury shares to employees	Cash dividends paid to the subsidiaries	Adjustments to share of changes in equity of associates and joint	ventures	Difference between proceeds from addition and disposal of subsidiary	and book value	Disposal of financial assets at fair value through other comprehensive	income	Balance at December 31, 2019
																										-265-

CHICONY ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortisation

Impairment loss determined in accordance with
IFRS 9

Share-based payments

Interest income

Dividend income

Interest expense

Net (gain) loss on financial assets and liabilities
at fair value through profit or loss

Share of profit of associates accounted for using
equity method

Gain on disposal of property, plant and
equipment

(Loss) gain on fair value adjustment of
investment property

Changes in operating assets and liabilities
Changes in operating assets
Notes receivable, net
Accounts receivable
Accounts receivable - related parties
Other receivables
Other receivables - related party
Inventories, net
Prepayments
Changes in operating liabilities
Notes payable
Accounts payable
Accounts payable - related parties
Contract liabilities - current
Other payables
Other payables - related parties
Other current liabilities
Defined benefit obligation - non-current
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash flows from operating activities Year ended December 31
Notes
2019
2018
$
6,251,742 $
3,740,967
6(8)(9)(23)
78,081
44,695
6(23)
13,123
17,937
12(2)
(
2,956 )
1,637
6(15)
173,052
-
6(21)
(
22,771 ) (
18,894 )
6(21)
(
59,378 ) (
68,536 )
6(25)
38,995
42,750
6(22)
(
134,595 )
494,292
6(7)
(
3,753,786 ) (
3,323,140 )
6(22)
(
105 ) (
1,004 )
6(22)
(
67,593 )
23,854
40,570
8,799
(
2,239,155 )
2,402,310
110,373 (
96,707 )
19,381 (
3,928 )
1,269,427 (
1,686,765 )
(
1,653 ) (
328,893 )
(
8,709 ) (
53,707 )
3,663 (
1,225 )
105,756 (
80,677 )
2,441,795
3,646,012
(
2,696 ) (
13,276 )
855,556
226,286
(
89,073 ) (
35,110 )
1,003
5,357
4,833 (
10 )
5,024,880
4,943,024
22,771
18,894
702,915
708,913
(
43,249 ) (
40,606 )
(
264,009 ) (
413,377 )
5,443,308
5,216,848

(Continued)

-266-

CHICONY ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets and liabilities at fair
value through profit or loss
Proceeds from disposal of financial assets and
liabilities at fair value through profit or loss
Acquisition of financial assets through other
comprehensive income
Proceeds from disposal of financial assets and
liabilities at fair value through other comprehensive
income
Acquisition of investments accounted for using
equity method
Return of capital from investments accounted for
using equity method
Increase in other receivables - related party
Acquisition of property, plant and equipment

Disposal of property, plant and equipment
Acquisition of investment property
Proceeds from disposal of investment property
received in advance
Acquisition of intangible assets
(Increase) decrease in refundable deposits
Acquisition of investments accounted for using
equity method
Decrease (increase) in other non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Increase in other payables - related parties
Decrease in long-term borrowings
Payment of cash dividends

Increase in guarantee deposits received
Repayment of lease liabilities
Payments to acquire treasury shares

Overdue stock dividends
Treasury stock transferred to employees
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year Year ended December 31
Notes
2019
2018
($
175,984 ) ($
1,601,092 )
1,123,722
1,099,893
(
71,867 )
-
64,152
4,859
(
625,574 ) (
237,697 )
-
4,903
(
252,020 ) (
155,530 )
6(28)
(
135,865 ) (
372,613 )
309
2,476
(
376,095 ) (
83,249 )
192,801
-
(
9,620 ) (
15,089 )
(
38,493 )
410
-
19,539
2,932 (
1,233 )
(
301,602 ) (
1,334,423 )
(
2,530,000 ) (
15,000 )
371,413
-
- (
380,000 )
6(18)
(
2,766,858 ) (
3,221,684 )
3,827
10,809
(
18,869 )
-
6(16)
- (
211,419 )
-
1,168
408,578
-
(
4,531,909 ) (
3,816,126 )
609,797
66,299
6(1)
121,874
55,575
6(1)
$
731,671 $
121,874

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

-267-

CHICONY ELECTRONICS CO., LTD. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Chicony Electronics Co., Ltd. (the “Company”) was incorporated in 1983 as a company limited by shares under the provisions of the Company Law of the Republic of China. The Company has been a listed company since 1999. The Company is engaged in the manufacturing and sales of keyboards and other computer peripheral components.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorised for issuance by the Board of Directors on March 10, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as follows:

follows:
NewStandards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9, 'Prepayment features with negative compensation' IFRS 16, 'Leases' Amendments to IAS 19, 'Plan amendment, curtailment or settlement' Amendments to IAS 28, 'Long-term interests in associates and joint ventures' IFRIC 23, 'Uncertainty over income tax treatments' Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. The quantitative impact will be disclosed when the assessment is complete.

-268-

IFRS 16, ‘Leases’

A. IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
B. The Company has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by the FSC. Accordingly, the Company increased ‘right-of-use asset’ and ‘lease liability’ both by $137,805 with respect to the lease contracts of lessees on January 1, 2019.
C. The Company has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
(a) Reassessment as to whether a contract is, or contains, a lease is not required, instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.
(b) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
(c) The accounting for operating leases whose period will end before December 31, 2019 as shortterm leases and accordingly, rent expense of $1,984 was recognised in 2019.
(d) The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.
D. The Company calculated the present value of lease liabilities by using weighted average incremental borrowing interest rate of 1%.
E. The Company recognised lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at the date of initial application. The amount of aforementioned present values is the same as the amount of lease liabilities recognised on January 1, 2019.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

NewStandards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’	January 1, 2020 January 1, 2020 January 1, 2020

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The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

NewStandards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non- current’	To be determined by International Accounting Standards Board January 1, 2021 January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2) Basis of preparation

A. Except for the following items, these parent company only financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

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B. The preparation of financial statements in compliance with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3)Foreign currency translation

Items included in the parent company only financial statements are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Company’s presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within other gains and losses.
B. Translation of foreign operations
(a) The operating results and financial position of all the entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- (i) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- (ii) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- (iii) All resulting exchange differences are recognised in other comprehensive income.

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(b) When the foreign operation partially disposed of or sold is an associate or joint arrangements, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company still retains partial interest in the former foreign associate or joint arrangements after losing significant influence over the former foreign associate, or losing joint control of the former joint arrangements, such transactions should be accounted for as disposal of all interest in these foreign operations.
(c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(4) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Financial assets at fair value through profit or loss

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

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D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
(6) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
- (a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
- (b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:
- (a) The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
- (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.
(7) Account and notes receivable
A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
C. The Company’s operating pattern of accounts receivable that are expected to be factored is for the purpose of selling, and the accounts receivable are subsequently measured at fair value, with any changes in fair value recognised in profit or loss.

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(8) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and accounts receivable that have a significant financing component, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(9) Derecognition of financial assets

The Company derecognises a financial asset when one of the following conditions is met:

A. The contractual rights to receive the cash flows from the financial asset expire.
B. The contractual rights to receive cash flows of the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.
C. The contractual rights to receive cash flows of the financial asset have been transferred; and the Company has not retained control of the financial asset.

(10) Inventories

(11) Investments accounted for using equity method / subsidiaries, associates and joint ventures

A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

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D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.
E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.
F. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income.
G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.
H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
I. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
J. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.
K. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

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L. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.
M. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.
(12) Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. Except for buildings and structures which have a useful life of 55 years, the estimated useful lives of other fixed assets are 2~7 years.

(13) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

Effective 2019

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

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B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable. The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability; and
(b) Any lease payments made at or before the commencement date.

(14) Operating leases (lessee)

Applicable for 2018

Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

(15) Investment property

(16) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 1~3 years.

(17) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

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(18) Borrowings

A. Borrowings comprise long-term and short-term bank borrowings and other long-term and shortterm loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(19) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(20) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(21) Non-hedging and embedded derivatives

(22) Employee benefits

A. Short-term employee benefits

B. Pensions
(a) Defined contribution plan

For defined contribution plan, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

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(b) Defined benefit plan

  - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

  - ii. Remeasurements arising on defined benefit plan are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  - iii. Past service costs are recognised immediately in profit or loss.

C. Termination benefits
Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier.

Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

D. Employees’ compensation and directors’ and supervisors’ remuneration
Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal obligation or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(23) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

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C. Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
D. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

(24) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(25) Dividends

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(26) Revenue recognition

A. Sales of goods:
(a) Sales revenue of the Company are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
(b) The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
(c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Company recognises the incremental costs of obtaining a contract as an expense when incurred although the Company expects to recover those costs.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies – evaluation of investment

property

The Company follows the guidance of IAS 40 ‘Investment property’ to determine the assets to be measured at fair value. The Company’s investment properties are mainly land and buildings. Their fair value is determined by an external appraiser and the fair value may be adjusted by the judgement of the external appraiser.

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(2) Critical accounting estimates and assumptions

A. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Company evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

B. Evaluation of investment property

The Company’s investment properties are measured at fair value. The fair value is evaluated using the income approach by an external appraiser. It involves critical assumptions including occupancy rate, rent growth rate, discount rate, etc.. Those assumptions may be affected by the economic conditions, market needs, etc. that may change.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits	December 31,2019 298 $ 731,373 731,671 $	December 31,2018
		574 $ 121,300
		121,874 $

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. The Company has no cash and cash equivalents pledged to others.

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(2) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss
Items Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Emerging stocks Beneficiary certificates Corporate bond Valuation adjustment Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Beneficiary certificates Valuation adjustment		December 31,2019		December 31,2018
	(	851,749 $ 28,399 98,140 3,015 981,303 418,466) 562,837 $ 403,354 $ 180,000 583,354 47,644 630,998 $	(	1,010,396 $ 112,227 333,544 13,085 1,469,252 482,638) 986,614 $ 369,227 $ 449,697 818,924 201,441 1,020,365 $

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Equity instruments Debt instruments Beneficiary certificates Derivatives	2019 2018 49,093 $ 282,884) ($ 263 68 85,239 211,476) ( 1,210) ( - 133,385 $ 494,292) ($ Years ended December 31,

B. The Company has no financial assets at fair value through profit or loss pledged to others as collateral.
C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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(3) Financial assets at fair value through other comprehensive income

Items Current items: Listed stocks Valuation adjustment ( Non-current items: Listed stocks Unlisted stocks Valuation adjustment (	December 31,2019 1,066,113 $ 111,043) ( 955,070 $ 859,750 $ 129,131 988,881 895,629) ( 93,252 $	December 31,2018 1,162,926 $ 269,434) 893,492 $ 859,750 $ 129,131 988,881 874,072) 114,809 $

A. The Company has elected to classify equity investments that are considered to be strategic investments or have steady dividend income as financial assets at fair value through other comprehensive income - current and financial assets at fair value through other comprehensive income - non-current. The fair value of such investments on December 31, 2019 and 2018 was equivalent to their carrying amount.
B. The Company sold $64,152 and $4,859 of equity investments at fair value which resulted in cumulative losses on disposal of $104,528 and $6,198 and were transferred as a deduction item to unappropriated retained earnings during the years ended December 31, 2019 and 2018, respectively.
C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

assets at fair value through other comprehensive	income are listed below:	income are listed below:
Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative losses reclassified to retained earnings due to derecognition Dividend income recognised in profit or loss held at end of year	Years ended December 31,
	2019 403,682) ($ 104,528 $ 24,274 $	2018 262,624) ($ 6,198 $ 18,340 $

D. The Company has no financial assets at fair value through other comprehensive income pledged to others as collateral.
E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

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(4) Notes and accounts receivable

Notes receivable Accounts receivable Less: Allowance for uncollectible accounts	December 31,2019 11,312 $ 4,800,746 $ 32,966) ( 4,767,780 $	December 31,2018 51,882 $ 2,565,768 $ 40,099) ( 2,525,669 $

A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

impaired is as follows:
Not past due Up to 30 days 31 to 120 days Over a year	December	Notes receivable 11,312 $ - - - 11,312 $ 31,2019	December	31,2018
	Accounts receivable 4,426,239 $ 214,178 127,975 32,354 4,800,746 $		Accounts receivable 2,158,253 $ 231,753 139,239 36,523 2,565,768 $	Notes receivable
				51,882 $ - - -
				51,882 $

The above ageing analysis was based on past due date.

B. As of December 31, 2019 and 2018, the balances of accounts and notes receivable were all from contracts with customers. As of January 1, 2018, the balance of receivables from contracts with customers amounted to $5,028,759.
C. The Company has no notes and accounts receivable pledged to others as collateral.
D. As at December 31, 2019 and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s notes and accounts receivable were equivalent to the carrying amount.
E. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(5) Transfer of financial assets-overall derecognition of transferred financial assets

A. The Company entered into a factoring agreement with financial institutions to sell its accounts receivable. Under the agreement, the Company is not obligated to bear the default risk of the transferred accounts receivable and does not have any continuing involvement in the transferred accounts receivable. Thus, the Company derecognised the transferred accounts receivable. As of December 31, 2019, details of the guarantee notes issued for the factoring agreement are provided in Note 9(2).
B. As of December 31, 2019, there were no outstanding accounts receivable sold.

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C. As of December 31, 2018, the outstanding accounts receivable sold were as follows:

		December 31,2018	December 31,2018
Purchaser of accounts recievable E. SUN BANK	Accounts receivable transferred 1,619,443 $	Amount derecognised 1,619,443 $	Facilities 2,626,075 $	Amount advanced 1,006,632 $	Interest rate of amount advanced
					3.33%~3.47%

On December 31, 2018, the Company has no retention for the factoring of accounts receivable. (6) Inventories

Inventories
The cost of inventories recognised as expense for the year: Cost Allowance for valuation loss Book value Raw mterials 3,916 $ - $ 3,916 $ Finished goods 1,093,428 83,907) ( 1,009,521 Merchandise inventory 488,603 20,460) ( 468,143 1,585,947 $ 104,367) ($ 1,481,580 $ Cost Allowance for valuation loss Book value Finished goods 1,172,056 $ (107,165) $ 1,064,891 $ Merchandise inventory 443,071 28,035) ( 415,036 1,615,127 $ 135,200) ($ 1,479,927 $ December 31,2019 December 31,2018 2019 2018 Cost of goods sold 23,055,982 $ 20,301,144 $ (Gain on reversal of) loss on decline in market value 30,833) ( 27,253 23,025,149 $ 20,328,397 $ Years ended December 31,		December 31,2019
	Cost 3,916 $ 1,093,428 488,603 1,585,947 $	Allowance for valuation loss - $ 83,907) ( 20,460) ( 104,367) ($ December 31,2018		Book value
				3,916 $ 1,009,521 468,143
				1,481,580 $

				Book value
				1,064,891 $ 415,036
				1,479,927 $
			2019 23,055,982 $ 30,833) ( 23,025,149 $	2018
				20,301,144 $ 27,253
				20,328,397 $

The cost of inventories recognised as expense for the year:

The Company reversed a previous inventory allowance for loss on decline in market value which was accounted for as reduction of cost of goods sold because of the clearance of inventories in 2019.

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(7) Investments accounted for using equity method

A. Investments accounted for under the equity method were as follows:

Shown as investments accounted for using equity method Subsidiaries Chicony Overseas Inc. Chicony Electronics (Thailand) Co., Ltd. Hipro Overseas (BVI) Inc. XAVi Technology Corp. Chicony Power Technology Co., Ltd. Chicony Global Inc. Unikey Electronics Co., Ltd. Shown as other non-current liabilities Subsidiaries Hipro Electronics Ltd.	December 31,2019 22,800,344 $ 230,756 2,721,424 358,188 3,146,608 2,987,312 1,204,078 33,448,710 $ 322,053 $	December 31,2018
		20,885,683 $ 193 2,747,568 265,241 2,631,400 3,353,224 720,549
		30,603,858 $
		450,063 $

B. The share of profit (loss) of subsidiaries and associates accounted for using equity method for the years ended December 31, 2019 and 2018 are as follows:

		Years ended	December 31,	December 31,
		2019		2018
Subsidiaries
Chicony Overseas Inc.	$	2,616,094	$	2,089,203
Chicony Electronics (Thailand) Co. Ltd.	(	38,838)		-
Hipro Overseas (BVI) Inc.		38,031		29,152
Had Eri Iou Industrial Inc. Ltd.		-	(	3,329)
XAVi Technology Corp.		80,479	(	99,014)
Chicony Power Technology Co., Ltd.		833,695		478,863
Chicony Global Inc.	(	291,753)		400,928
Hipro Overseas (BVI) Inc.		17,340	(	3,053)
Unikey Electronics Co., Ltd.		498,738		430,390
	$	3,753,786	$	3,323,140

C. For the information about subsidiaries, refer to Note 4(3) of consolidated financial statements for the year ended December 31, 2019.

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(8) Property, plant and equipment

At January 1, 2019 Cost Accumulated depreciation and impairment 2019 Opening net book amount as at January 1 Additions Disposals Reclassifications Depreciation Closing net book amount as at December 31 At December 31, 2019 Cost Accumulated depreciation and impairment	Land 327,859 $ - 327,859 $ 327,859 $ - - - - 327,859 $ 327,859 $ - 327,859 $		Buildings and structures		Testing equipment
		1,592,780 $ 54,825) ( 1,537,955 $ 1,537,955 $ - - 1,556) ( 28,452) ( 1,507,947 $ 1,591,225 $ 83,278) ( 1,507,947 $			60,009 $ 45,518) ( 14,491 $ 14,491 $ 14,730 - - 6,455) ( 22,766 $ 73,971 $ 51,205) ( 22,766 $

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Land At January 1, 2018 Cost 1,058,486 $ Accumulated depreciation and impairment - 1,058,486 $ 2018 Opening net book amount as at January 1 1,058,486 $ Additions - Disposals - Reclassifications 730,627) ( Depreciation - Closing net book amount as at December 31 327,859 $ At December 31, 2018 Cost 327,859 $ Accumulated depreciation and impairment - 327,859 $		Buildings and structures		Testing equipment		Construction inprogress		Others		Total
		1,532,508 $ 46,905) ( 1,485,603 $ 1,485,603 $ 71,568 - 8,243 27,459) ( 1,537,955 $ 1,592,780 $ 54,825) ( 1,537,955 $		49,777 $ 41,631) ( 8,146 $ 8,146 $ 10,232 - - 3,887) ( 14,491 $ 60,009 $ 45,518) ( 14,491 $	693,094 $ - 693,094 $ 693,094 $ 269,392 - 925,716) ( - 36,770 $ 36,770 $ - 36,770 $		151,372 $ 98,222) ( 53,150 $ 53,150 $ 12,766 1,472) ( - 13,349) ( 51,095 $ 154,127 $ 103,032) ( 51,095 $		3,485,237 $ 186,758) ( 3,298,479 $ 3,298,479 $ 363,958 1,472) ( 1,648,100) ( 44,695) ( 1,968,170 $ 2,171,545 $ 203,375) ( 1,968,170 $

A. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:

Amount capitalised Range of the interest rates for capitalisation	Years ended December 31,	Years ended December 31,
	2019 - $ -	2018
		16,209 $
		0.96%~1.32%

B. For the information on property, plant and equipment pledged to others, please refer to Notes 6(3) and 8.

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C. As the management intends to sell the Company’s land and residential compound building located in Sanchong District, New Taipei City after construction completion, the Company reclassified “Land” and “Construction in progress” to “Investment property”, amounting to $1,656,343 (the original book value). To promptly reflect the fair value information, the Company has undertaken a revaluation of the aforementioned properties in accordance with the regulations on revaluation at fair value when transferred to investment property at fair value in the fourth quarter of 2018. The revaluation surplus amounted to $155,281 which was recognised as other comprehensive income – revaluation surplus on the day of change in use of the property. After deduction of deferred tax liabilities recognised due to revaluation amounting to $150,136, the remaining balance of $5,145 was added to revaluation surplus of shareholders’ equity.
(9) Leasing arrangements - lessee

Effective 2019

A. The Company leases various assets including buildings, business vehicles and multifunction printers. Rental contracts are typically made for periods of 1 to 8 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. Short-term leases with a lease term of 12 months or less comprise multifunction printers, lowvalue assets comprise certain offices and business vehicles. Those were not included in right-ofuse assets.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Buildings and structures	December 31,2019 Carryingamount 118,350 $	Year ended December 31,2019
		Depreciation charge
		19,455 $

D. For the year ended December 31, 2019, the Company has no additions to right-of-use assets.
E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Year ended December 31,2019
	1,292 $ 1,984 920

F. For the year ended December 31, 2019, the Company’s total cash outflow for leases was $23,065.

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(10) Investment property

At January 1 Additions – from subsequent expenditures Reclassifications Gain (loss) on fair value adjustment At December 31	2019 8,047,823 $ 839,561 6,033 67,593 8,961,010 $	2018 6,176,804 $ 83,249 1,811,624 23,854) ( 8,047,823 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year Direct operating expenses arising from the investment property that did not generate rental income during the year	Years ended December 31,
	2019 121,761 $ 41,772 $ 24,231 $	2018
		101,409 $
		41,443 $
		33,596 $

B. Basis of investment property at fair value:

The Company’s investment properties are land and buildings of office building and residential compound building. Office buildings are located in Sanchong District and Wugu District in New Taipei City. They mainly earn from rental revenue with rental period ranging from 1 to 7 years. Residential compound building is located in Sanchong District in New Taipei City. The main purpose is for sale.

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The assumptions used for the years ended December 31, 2019 and 2018 are as follows:

(a) Details of the Company’s investment property are as follows:

December 31, 2019

CECHeadquarters	Wugu Building	Chincony Laboratory	Residential Compound Building
Sanchong District, New Taipei City Income approach Panasia Shao You, Chung December 16, 2019 (Note)			Sanchong District, New Taipei City Income approach Panasia Shao You, Chung December 16, 2019 (Note)
CECHeadquarter	Wugu Building	Chincony Laboratory	Residential Compound Building
Sanchong District, New Taipei City Income approach Panasia Shao You, Chung November 30, 2018 (Note)	Wugu District, New Taipei City Income approach Panasia Wei Yuan, Cheng October 22, 2018 (Note)	Sanchong District, New Taipei City Income approach Panasia Wei Yuan, Cheng October 22, 2018 (Note)	Sanchong District, New Taipei City Income approach Panasia Shao You, Chung Octorber 30, 2018 (Note)

Note: We obtained validity statements of appraisal report as of December 31, 2019 and 2018 from appraiser.

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(b) The Company’s office buildings’ (including car parks) fair value was evaluated using the discounted cash flow analysis of income approach.
The estimation process of the valuation method involves differentiating between rented and not yet rented. The former is calculated by contract rent and the latter is calculated by market price. It also considers comparative rent information of similar properties to determine annual growth range of rent; includes idle loss, decoration offset loss, and the closing balance of disposal value of that property to calculate future cash inflow, then discounted by an appropriated discount rate accumulated until the valuation date. Future cash outflow consists of expenses directly related to operations, i.e. land tax, house tax, insurance fee, management fee, maintenance fee, replacement allocation, amortisation of agent fee and etc., is estimated by the actual expenses incurred in the current year, considering the Company’s current operating results and changes which may occur in the future.
(c) The rent, occupancy rate and income of the Company’s office buildings (including car parks) and comparative rent information of similar properties are as follows:

The subject	Estimated rent ($/3.3m2/month)	Similar comparative subject in local or market	Occupancy rate	Income of pastyear
Year ended December 31,2019	$870~$1044 $277~$725 $720 $822~$984 Estimated rent ($/3.3m2/month)	Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Similar comparative subject in local or market	62.07% 100% 100% - Occupancy rate	98,886 $ 22,040 835 - Income of pastyear
CEC Headquarter Wugu Building Chicony Laboratory Residential Compound Building The subject
Year ended December 31,2018	$521~$1,076 $291~$713 $718 $838~$993	Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent Equivalent to estimated rent	53.42% 100% - -	79,369 $ 22,040 - -
CEC Headquarter Wugu Building Chicony Laboratory Residential Compound Building

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(d) Rent growth rate is evaluated by considering the lease contract and actual market situation. Discount rate is evaluated by risk premium approach which takes the return rate on investment of the most general goods as standard, adopted the floating interest rate on a 2- year time deposits of a small amount, as posted by the Chunghwa Post Co., Ltd. plus 0.75 percentage points; and explore the liquidity, risk level, value-added level and the ease of management of the subject. The range of rent growth rate and discount rate are as follows:

December 31, 2019

CEC Headquarter	Wugu Building	Chincony Laboratory	Residential Compound Building
1.00% 2.40%			1.00% 2.22%
CEC Headquarter	Wugu Building	Chincony Laboratory	Residential Compound Building
1.00% 3.75%	0.50% 4.05%	1.00% 2.85%	1.00% 3.05%

C. The fair value information about the investment property is provided in Note 12(3).
D. Information about the investment property that was pledged to others as collateral is provided in Notes 6(13) and 8.
E. For the years ended December 31, 2019 and 2018, the information on the reclassifications of the Company’s investment property is provided in Note 6(8).
F. Amount of borrowing costs capitalised as part of investment property and the range of the interest rates for such capitalisation are as follows:

rates for such capitalisation are as follows:
Amount capitalised Range of the interest rates for capitalisation	Years ended December 31,
	2019 10,054 $ 0.48%~1.44%	2018
		- $
		-

(11) Short-term borrowings

Short-term borrowings
Type of borrowings Bank unsecured borrowings Type of borrowings Bank unsecured borrowings	December 31,2019 600,000 $ December 31,2018 3,130,000 $	Interest rate range 0.8%~0.85% Interest rate range 0.85%~0.93%	Collateral
			None Collateral
			None

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As of December 31, 2019 and 2018, the Company had issued guarantee notes for the short-term borrowings amounting to $13,852,580 and $12,000,600, respectively.

(12) Other payables

Other payables
Employees’ compensation and directors’ and supervisors’ remuneration payable Salary payable and annual bonus Marketing allowance payable Construction and equipment expense payable Storage charge payable Freight charges and customs clearing fee payable Insurance expense payable Others	December 31,2019 892,847 $ 689,329 545,079 472,277 72,771 41,973 37,688 119,195 2,871,159 $	December 31,2018
		534,286 $ 422,761 653,726 121,976 54,156 39,133 26,368 95,423
		1,947,829 $

- (13) Long term borrowings

As of December 31, 2019 and 2018, the Company had no long-term borrowings while issued guarantee notes for the long-term borrowings amounted to $2,000,000 and $0, respectively.

In the fourth quarter of 2018, the Company had signed individual credit contracts with E. Sun Commercial Bank, Land Bank of Taiwan and Hua Nan Commercial Bank for long-term operating use. The contract period is 5 years, and the revolving loan facilities are $2,000,000, $1,000,000 and $1,000,000, respectively. For the credit lines mentioned above, the Company has pledged partial floors of the headquarters building as described in Note 8.

(14) Pensions

A. Defined benefit plan: Employee contributions
(a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions to cover the deficit by next March.

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(b) The amounts recognised in the balance sheet are determined as follows:

	December	31,2019	December	31,2018
Present value of defined benefit obligations	($	284,256)	($	286,990)
Fair value of plan assets		116,760		135,315
Net accrued pension liability	($	167,496)	($	151,675)

(c) Movements in net defined benefit liabilities are as follows:

Present value of
defined benefit
obligations
Year ended December 31, 2019
Balance at January 1
286,990)
($ Current service cost
1,878)
(
Interest (expense) income
2,870)
(
Past service cost
5,288)
(
297,026)
($ Remeasurements:
Return on plan assets
(excluding amounts included
in interest income or expense)
-
Change in demographic
assumptions
208)
(
Change in financial
assumptions
6,397)
(
Experience adjustments
9,085)
(
15,690)
(
Pension fund contribution
-
Paid pension
28,460

Balance at December 31
284,256)
($

Fair value of
Net defined
plan assets
benefit liability
135,315
$ 151,675)
($ -
1,878)
(
1,373
1,497)
(
-
5,288)
(
136,688
$ 160,338)
($ 4,702
4,702
-
208)
(
-
6,397)
(
-
9,085)
(
4,702
10,988)
(
3,830
3,830
28,460)
(
-
116,760
$ 167,496)
($

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Present value of
defined benefit
obligations
Year ended December 31, 2018
Balance at January 1
279,073)
($ Current service cost
2,277)
(
Interest (expense) income
3,139)
(
284,489)
($ Remeasurements:
Return on plan assets
(excluding amounts included
in interest income or expense)
-
Change in demographic
assumptions
13,678)
(
Change in financial
assumptions
3,019)
(
Experience adjustments
9,768
6,929)
(
Pension fund contribution
-
Paid pension
4,428

Balance at December 31
286,990)
($

Fair value of
Net defined
plan assets
benefit liability
130,516
$ 148,557)
($ -
2,277)
(
1,491
1,648)
(
132,007
$ 152,482)
($ 3,801
3,801
-
13,678)
(
-
3,019)
(
-
9,768
3,801
3,128)
(
3,935
3,935
4,428)
(
-
135,315
$ 151,675)
($

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2019 and 2018 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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(e) The principal actuarial assumptions used were as follows:

The principal actuarial assumptions used were	as follows:
Discount rate Future salary increases	2019 0.750% 2.500%	2018
		1.000%
		2.500%

Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2019 Effect on present value of defined benefit obligation December 31, 2018 Effect on present value of defined benefit obligation		Discount rate	Discount rate	Discount rate		Future salaryincreases	Future salaryincreases
		Increase 0.25%		Decrease 0.25%		Increase 0.25%	Decrease 0.25%
		6,397) ($ 6,453) ($		6,623 $ 6,684 $		6,401 $ 6,478 $	6,216) ($ 6,288) ($

The method and assumptions used for the preparation of sensitivity analysis during 2019 and 2018 are the same.

(f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2020 amount to $3,780.
(g) As of December 31, 2019, the weighted average duration of the retirement plan is 9.1 years. The analysis of timing of the future pension payment was as follows:

The analysis of timing of the future pension payment was as follows:
Within 1 year 1-2 year(s) 2-5 years Over 5 years	10,737 $ 6,239 66,957 101,696
	185,629 $

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B. Defined contribution plan

(a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2019 and 2018 were $42,908 and $36,656, respectively.

(15) Share-based payment

For the year ended December 31, 2019, the Company’s share-based payment arrangements were as follows:

follows:
Type of arrangement Treasury stock transferred to employees	Grant date 2019.9.27	Quantity granted 6,377 thousand shares	Contract period -	Vesting conditions
				Vested immediately

A. Details of treasury stock transferred to employees are as follows:

Details of treasury stock transferred to employees	are as follows:	are as follows:
Options outstanding at January 1 Options granted Options exercised Options outstanding at December 31 Options exercisable at December 31	2019
	No. of options - 6,377 6,377) ( - -	Weighted-average exercise price (in dollars)
		- $ 64.26 64.26 - -

B. The fair value of stock options granted on grant date is measured using the closing price on the grant date less the exercise price.
C. Expenses incurred on share-based payment transactions are shown below:

The aforementioned options were all exercised on October 30, 2019. Equity-settled	Year ended December 31,2019
	173,052 $

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(16) Share capital

A. As of December 31, 2019, the Company’s authorised capital was $8,000,000, consisting of 800,000 thousand shares of ordinary stock and the paid-in capital was $7,344,975 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

At January 1 Common stock dividends Employee share compensation Treasury stock transferred to employees Repurchased shares as treasury stock Subsidiary received stock dividend from parent company At December 31	2019(Note) 2018(Note) 686,640 680,642 - 3,620 4,118 6,155 6,377 - - 3,591) ( - 186) ( 697,135 686,640

Note: Shares in thousands.

B. On March 7, 2019, the Company’s Board of Directors approved the employees’ stock bonus amounting to $280,000 at the previous closing price of $68 (in dollars) before the day of the Board of Directors’ meeting (March 6, 2019), issuing 4,118 thousand shares. The Company has obtained a letter of approval from the appropriate authorities. The issue date was set on April 3, 2019, and the Company had completed the related registration on April 24, 2019.
C. On September 13, 2018, the Company’s Board of Directors during its meeting resolved to purchase treasury shares with the ceiling of 10 million shares to be reissued to employees. As of November 13, 2018 (the expiration of the execution period), the Company has purchased 3,591 thousand treasury shares amounting to $211,419.
D. The stockholders during their meeting held on June 5, 2018 had approved to issue common stock dividends amounting to $36,199. A total of 3,620 thousand shares had been issued and, the Company has obtained a letter of approval from the appropriate authorities. The issue date was set on July 25, 2018, and the Company had completed the related registration on August 8, 2018.
E. On March 9, 2018, the Company’s Board of Directors approved the employees’ stock bonus amounting to $453,000 at the previous closing price of $73.6 (in dollars) before the day of the Board of Directors’ meeting (March 8, 2018), issuing 6,155 thousand shares. The Company has obtained a letter of approval from the appropriate authorities. The issue date was set on April 3, 2018, and the Company had completed the related registration on April 23, 2018.

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F. Treasury stock
(a) Reason for stocks reacquisition and movements in the number of the Company’s treasury stocks are as follows:

Name of company holdingthe shares	Reason for reacquisition	December 31,2019	December 31,2019	December 31,2019
		Number of shares (in thousands)	Carrying amount	Fair value (in dollars) (per share)
UNIKEY HEC Name of company holdingthe shares	For investment For investment Reason for reacquisition
		Number of shares (in thousands)	Carrying amount	Fair value (in dollars) (per share)
The Company UNIKEY HEC	To be reissued to employees For investment For investment	6,377 21,174 16,189 43,740	417,307 $ 205,795 105,482 728,584 $	62.60 $ 62.60 62.60

(b) Pursuant to the R.O.C. Securities and Exchange Law, the number of stocks bought back as treasury stock should not exceed 10% of the number of the Company’s issued and outstanding stocks and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(c) Pursuant to the R.O.C. Securities and Exchange Law, treasury stocks should not be pledged as collateral and is not entitled to dividends before it is reissued.
(d) Pursuant to the R.O.C. Securities and Exchange Law, treasury stocks should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.
(e) Details of treasury stock transferred to employees are provided in Note 6(15).

(17) Capital surplus

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A summary of the Company’s capital surplus as of December 31, 2019 and 2018 are as follows:

Share premium Treasury share transactions Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries Others	December 31,2019 3,527,510 $ 1,589,835 421,988 573,501 1,171 6,114,005 $	December 31,2018
		3,288,686 $ 1,283,533 533,586 526,957 1,171
		5,633,933 $

(18) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses, if any; and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the total capital stock balance and as special reserve in accordance to relevant regulations when necessary; and the remainder, if any, to be appropriated shall be presented by the Board of Directors and resolved by the stockholders at the stockholders’ meeting.
B. The Company’s dividend policy is summarised below: the Company is in the development of electronics industry, the dividend policy should be formulated by achieving both targets that supply the new products capital requirement and increase the return on shareholders’ investment. Therefore, the total dividend each year cannot be above of the total distributable earnings, and the cash dividend cannot be less than 90% of the total dividend paid. The ratio is restricted until the total distributable common stock dividends reach $0.5 per share.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently. The Company elected to reclassify the unrealised revaluation increment and cumulative translation adjustment to unappropriated earnings and accrue special reserve by $433,524 on initial application of IFRSs.

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E. The appropriations of 2018 and 2017 earnings had been resolved at the shareholders’ meeting on June 5, 2019 and June 5, 2018, respectively, and the details are summarised below:

Years ended December 31,

Legal reserve Special reserve Stock dividends Cash dividends	Dividends per share Amount (in dollars) 359,071 $ 1,244,101 - - $ 2,766,858 3.80 2018	2017	2017
	Amount 359,071 $ 1,244,101 - 2,766,858	Amount 402,153 $ 1,427,780 36,199 3,221,684	Dividends per share (in dollars)
			0.05 $ 4.45

F. Subsequent events: The appropriations of 2019 earnings had been proposed at the Board of Directors’ meeting on March 10, 2020, but has not yet been resolved by the shareholders. Details are summarised below:

are summarised below:
Legal reserve Special reserve Cash dividends	Year ended December 31,2019
	Amount 583,882 $ 185,424 4,362,816	Dividends per share (in dollars)
		5.9 $

As of March 10, 2020, the abovementioned appropriations of 2019 earnings has not been resolved by the shareholders.

G. For the information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(24).

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(19) Other equity items

Other equity items
								2019
							Unrealised
							gains (losses)
						on valuation of
		Currency					financial					Revaluation
		translation						assests				increment				Total
At January 1	($		985,814)		($			3,460,880)			$	1,381,667			($	3,065,027)
Revaluation
- Company				-	(			403,682)					-		(	403,682)
- Subsidiary				-				726,108					-			726,108
- Transfer out				-				540,517					-			540,517
Currency translation
differences:
`-`Company	(	1,121,851)						-					-		(	1,121,851)
`-`Associates	(			7,726)				-					-		(			7,726)
At December 31	($	2,115,391)			($			2,597,937)		$		1,381,667			($	3,331,661)
												2018
										Unrealised
									gains (losses)
							Available-		on			valuation
				Currency				for-sale		of		financial	Revaluation
			translation				investment					assets	increment						Total
At January 1		($		1,009,474)			($	2,203,492)	$			-	$	1,388,279			($		1,824,687)
Effect of retrospective
application and retrospective
restatement					-			2,203,492	(		3,108,883)					-	(		905,391)
Balance at January 1
after adjustment		(		1,009,474)				-	(		3,108,883)			1,388,279			(		2,730,078)
Revaluation
- Company					-			-	(			262,624)			155,281		(		107,343)
- Tax on
Company					-			-				-	(		161,893)		(		161,893)
- Subsidiary					-			-	(			133,005)				-	(		133,005)
- Transfer out					-			-				43,632				-			43,632
Currency translation
differences:
- Company				22,123				-				-				-			22,123
- Associates				1,537				-				-				-			1,537
At December 31		($		985,814)			$	-	($		3,460,880)		$	1,381,667			($		3,065,027)

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(20) Operating revenue

A. Disaggregation of revenue from contracts with customers

Revenue from contracts with customers Electronic components Consumer electronic and other electronic products Others	Years ended December 31,	Years ended December 31,
	2019 7,305,403 $ 20,208,431 856,008 28,369,842 $	2018 7,454,903 $ 15,932,786 1,113,359 24,501,048 $

B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

Contract liabilities	December 31,2019 - $	December 31,2018 2,696 $	January1,2018
			15,972 $

C. Contract liability balance at the beginning of 2019 and 2018 was all included in the operating revenue.

(21) Other income

Other income
Rental revenue Interest income Dividend income Others	2019 2018 121,761 $ 101,409 $ 22,771 18,894 59,378 68,536 139,078 122,385 342,988 $ 311,224 $ Years ended December 31,
	2019 121,761 $ 22,771 59,378 139,078 342,988 $

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(22) Other gains and losses

Other gains and losses
		Years ended	December 31,
		2019			2018
Net loss on financial assets and liabilities at fair	($	1,210)		$	-
value through profit or loss - derivatives instruments
Net gain (loss) on financial assets and liabilities at		134,595	(		494,292)
fair value through profit or loss
Net currency exchange gain (loss)		399,545	(		336,265)
Gain on disposal of property, plant and		105			1,004
equipment
Gain (loss) on fair value adjustment of investment		67,593	(		23,854)
property
Others	(	7,593)	(		8,592)
	$	593,035	($		861,999)

(23) Expenses by nature

Expenses by nature
Employee benefit expense Employee benefit expense Depreciation charges on property, plant and equipment and right-of-use asset Amortisation on intangible assets Wages and salaries Labour and health insurance fees Pension costs Directors’ and supervisors’ remuneration Other personnel expenses	Years ended December 31,
	2019 2018 2,282,200 $ 1,488,887 $ 78,081 44,695 13,123 17,937 Years ended December 31,	2018
	2019 2,055,283 $ 81,856 51,571 48,051 45,439 2,282,200 $	2018
		1,318,364 $ 61,415 40,582 25,701 42,825
		1,488,887 $

(24) Employee benefit expense

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees' compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 11% for employees’ compensation and shall not be higher than 1% for directors’ and supervisors’ remuneration.

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B. For the years ended December 31, 2019 and 2018, employees’ compensation was accrued at $838,112 and $503,034, respectively; directors’ and supervisors’ remuneration was accrued at $52,070 and $31,252, respectively. The aforementioned amounts were recognised in salary expenses.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 11.74% and 0.73% of distributable profit of current year for the year ended December 31, 2019. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $838,112 and $52,070, respectively, and the employees’ compensation will be distributed in the form of cash and shares.

Employees’ compensation of $503,034 and directors’ and supervisors’ remuneration of $31,252 for 2018 as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2018 financial statements. For the year ended December 31, 2018, 4,118 thousand shares of stock were issued as employee compensation, and the number of shares were calculated based on the price of $68 (in dollars).

C. As of December 31, 2019 and 2018, the Company had 797 and 717 employees, respectively. There were 6 and 4 directors who have not served as employees as of December 31, 2019 and 2018, respectively.
D. (a) Average employee benefit expense in 2019 and 2018 was $2,824 and $2,052, respectively. (b) Average employee salaries in 2019 and 2018 were $2,598 and $1,849 respectively.
(c) Adjustment of average employee salaries was 41%.

(25) Finance costs

Finance costs
Interest expense Bank loan Lease liability Others Less: Capitalisation of qualifying assets	2019 2018 44,563 $ 57,763 $ 1,292 - 3,194 1,196 10,054) ( 16,209) ( 38,995 $ 42,750 $ Years ended December 31,
	2019 44,563 $ 1,292 3,194 10,054) ( 38,995 $

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(26) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Prior year income tax overestimation Income tax expense Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Income tax expense	Years ended December 31,
	2019 2018 187,463 $ 316,821 $ 1,455 - - 70,678) ( 188,918 246,143 224,007 98,559) ( - 2,672 412,925 $ 150,256 $	2018
		316,821 $ - 70,678)
		246,143
		150,256 $

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
Revaluation increment Impact of change in tax rate	Years ended December 31,
	2019 - $ - - $	2018
		150,136 $ 11,757
		161,893 $

B. Reconciliation between income tax expense and accounting profit

Tax calculated based on profit before tax and statutory tax rate Prior year income tax overestimation Tax on undistributed earnings Effect from items adjusted in accordance with tax regulation Income tax expense	Years ended December 31,	Years ended December 31,
	2019 2018 1,250,348 $ 748,193 $ - 70,678) ( 1,455 - 838,878) ( 527,259) ( 412,925 $ 150,256 $	2018
		150,256 $

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences and investment tax credits are as follows:

tax credits are as follows:
						2019
					Recognised in
			January1		profit or loss				December 31
Temporary differences:
- Deferred tax liabilities:
Fair value adjustment of		($	376,130)		($		126,911)	($		503,041)
investment property
Unrealised exchange gain				-	(		97,096)	(		97,096)
		($	376,130)		($		224,007)	($		600,137)
					2018
						Recognised in
							other
				Recognised in		comprehensive
		January1		profit	or loss		income		December 31
Temporary differences:
- Deferred tax liabilities:
Fair value adjustment of
investment property	($		207,244)	($	6,993)	($	161,893)		($	376,130)
Unrealised exchange gain	(		102,880)	102,880				-		-
	($		310,124)	$	95,887	($	161,893)		($	376,130)

D. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

are as follows:
Deductible temporary differences	December 31,2019 986,603 $	December 31,2018
		1,272,047 $

E. The Company’s income tax returns through 2017 have been assessed and approved by the Tax Authority.
F. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate.

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(27) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profit attributable to ordinary shareholders plus assumed conversion of all dilutive potential ordinary shares	Year	ended December 31,2019
	Amount after tax 5,838,817 $ - 5,838,817 $ Year	Weighted average number of ordinary shares outstanding Earnings per share (shares in thousands) (in dollars) 691,107 8.45 $ 10,149 701,256 8.33 $ ended December 31,2018	Earnings per share (in dollars)
			8.45 $
			8.33 $
	Amount after tax 3,590,711 $ - 3,590,711 $	Weighted average number of ordinary shares outstanding (shares in thousands) 688,299 9,164 697,463	Earnings per share (in dollars)
			5.22 $
			5.15 $

The above weighted-average outstanding shares of common stock have been adjusted according to the earnings distribution approved by the Board of Directors and stockholders.

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(28) Supplemental cash flow information

Investing activities with partial cash payments:

Supplemental cash flow information Investing activities with partial cash payments:
Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the year	Years ended December 31,
	2019 22,700 $ 121,976 8,811) ( 135,865 $	2018
		363,958 $ 130,631 121,976) (
		372,613 $

(29) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities At December 31 At January 1 Changes in cash flow from financing activities At December 31		2019	2019	Total 3,267,805 $ 2,548,869) ( 718,936 $ Total 3,525,000 $ 395,000) ( 3,130,000 $
	Short-term borrowings 3,130,000 $ 2,530,000) ( 600,000 $	Lease liability Others 137,805 $ 357,830 $ 18,869) ( 371,413 118,936 $ 729,243 $ 2018
	Short-term borrowings 3,145,000 $ 15,000) ( 3,130,000 $	Long-term borrowings 380,000 $ 380,000) ( - $	Others - $ 357,830 357,830 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

LATED PARTY TRANSACTIONS Names of related parties and relationship
Names of relatedparties	Relationshipwith theCompany
Chicony Electronics (DongGuan) Co., Ltd. Chicony Electronics (Suzhou) Co., Ltd. Chicony Electronics (Chong-Qing) Co., Ltd. Mao-Ray Electronics (DongGuan) Co., Ltd. Chicony Global Inc. Mao-Feng International Inc. Real Young Electronics Co., Ltd. ShunOn Electronic Co. Clevo Co.	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Other related parties Other related parties

Note: For the rest of the names of and relationship with related parties, please refer to Note 4(3) of consolidated financial statements.

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(2) Significant related party transactions

A. Operating revenue:

nificant related party transactions Operating revenue:
Sales of goods: - Subsidiaries - Other related parties Sales of services: - Chicony Global Inc. - Chicony Electronics (Suzhou) Co., Ltd. - Subsidiaries	Years ended December 31,
	2019 6,363 $ 2,337 642,802 131,628 68,227 851,357 $	2018
		279 $ 1,285 794,038 233,288 63,100
		1,091,990 $

The price, terms of the sale and related contracts with related parties were the same with those to third parties, with reasonable rebates. In general, the collection periods ranged from 60 to 90 days. However, extension is given depending on financial situation of related parties.

B. Purchases:

Purchases:
Purchases of goods: - Chicony Electronics (DongGuan) Co., Ltd. - Chicony Electronics (Suzhou) Co., Ltd. - Mao-Ray Electronics (DongGuan) Co., Ltd. - Subsidiaries	Years ended December 31,
	2019 8,907,899 $ 7,585,918 4,517,159 294,394 21,305,370 $	2018
		7,765,459 $ 6,595,482 4,662,471 276,484
		19,299,896 $

The terms of the purchases from related parties were the same as those to third parties.

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C. Receivables from related parties:

Receivables from related parties:
Accounts receivable: - Chicony Electronics (Suzhou) Co., Ltd. - Chicony Electronics (Chong-Qing) Co., Ltd. - Subsidiaries - Other related parties Other receivables - Real Young Electronics Co., Ltd. - Chicony Global Inc. - Subsidiaries - Other related parties	December 31,2019 138,588 $ 66,930 29 1,990 207,537 582,932 233,937 28,515 101 845,485 1,053,022 $	December 31,2018
		252,938 $ 64,418 80 474
		317,910
		1,797,405 294,946 22,498 63
		2,114,912
		2,432,822 $

(a) The receivables from related parties arise mainly from sale transactions and providing marketing services. The credit term is limited from 60 to 90 days after the date of transaction. However, extension is given depending on financial situation of related parties. The receivables are unsecured in nature and bear no interest. There was no allowance for doubtful accounts receivable from related parties.
(b) Other non-operating receivables due from related parties mainly arose from payments on behalf of others, management consulting service income, office rental income (no interest charged) and interest receivables from loans to related party.
D. Payables to related parties:

Payables to related parties:
Accounts payable: - Chicony Electronics (DongGuan) Co., Ltd. - Chicony Electronics (Suzhou) Co., Ltd. - Mao-Ray Electronics (DongGuan) Co., Ltd. - Subsidiaries Other payables: - Mao-Feng International Inc. - Chicony Electronics (DongGuan) Co., Ltd. - Subsidiaries - Other related parties	December 31,2019 13,665,270 $ 5,625,590 3,398,726 74,634 22,764,220 699,543 33,862 19,462 1,655 754,522 23,518,742 $	December 31,2018
		10,818,902 $ 5,346,086 4,085,025 72,412
		20,322,425
		708,373 111,274 23,948 -
		843,595
		21,166,020 $

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(a) The payables from related parties arise mainly from purchase transactions. The credit term is limited from 30 to 60 days after the date of transaction. The payables are unsecured in nature and bear no interest.
(b) Other accounts payable to related parties mainly arose from service expense, collection of payments on behalf of others, payments on behalf of related parties and interest payable on loans.
E. Service purchase – commission, maintenance repair services and marketing service expense

Subsidiaries	Years ended December 31	Years ended December 31
	2019 29,004 $	2018
		24,737 $

F. Rent income / management consulting service income (a) Rent income

nt income / management consulting service Rent income	income	income
Subsidiaries	Years ended December 31
	2019 59,926 $	2018
		55,566 $

(b) Management consulting service income (shown as ‘Miscellaneous income - others’)

G. Dividend income H. Dividend expenditure Subsidiaries Subsidiaries (shown as deductions from ‘Investments accounted for using equity method’) Other related parties (shown as ‘Other income’) Subsidiaries (shown as ‘Addition to investments accounted for using equity method’)	Years ended December 31	Years ended December 31
	2019 2018 25,725 $ 21,888 $ Years ended December 31	2018
		21,888 $
	2019 2018 643,537 $ 640,377 $ 12,141 9,699 655,678 $ 650,076 $ Years ended December 31	2018
		640,377 $ 9,699
		650,076 $
	2019 141,980 $	2018
		165,439 $

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I. Financing
(a) Loans to related parties:

ancing Loans to related parties:
Loans from related parties: Outstanding balance: Subsidiaries Interest income: Subsidiaries Outstanding balance: Subsidiaries Interest expense: Subsidiaries	December 31,2019 December 31,2018 2,196,550 $ 1,944,530 $ Years ended December 31,	December 31,2018
		1,944,530 $
	2019	2018
	20,337 $	18,420 $
	2019 2,587 $

(b) Loans from related parties:
J. Endorsements and guarantees and commitments

As of December 31, 2019 and 2018, the credit guarantee provided by the Company to subsidiaries’ borrowings are as follows:

	borrowings are as follows:
(3)	Key management compensation Subsidiaries	Years ended December 31
		2019 360,120 $	2018
			368,580 $

Key management compensation Subsidiaries	360,120 $ 368,580 $	360,120 $ 368,580 $
Salaries and other short-term employee benefits Termination benefits	Years ended December 31,
	2019 227,053 $ 1,684 228,737 $	2018
		216,147 $ 2,119
		218,266 $

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8. PLEDGED ASSETS

The Company’s assets pledged as collateral are as follows:

Pledged asset Refundable deposits (shown as “Other non-current assets”) Property, plant and equipment Investment property	December 31,2019 December 31,2018 Purpose Bid bond and margin for 44,809 $ 6,316 $ operating lease 436,703 540,284 Long-term borrowings 4,278,523 4,269,344 Long-term borrowings 4,760,035 $ 4,815,944 $ Book value
	December 31,2019 44,809 $ 436,703 4,278,523 4,760,035 $

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS

Except for the information in Notes 6(11) and (13), more information on significant commitments and contingencies is disclosed as follows:

(1) As of December 31, 2019, for bank loans, financing forward exchange contracts, bill purchased and commercial paper issuance, the Company provided standby promissory notes payable totaling $4,999,775 as security.
(2) As of December 31, 2019, the capital expenditures that have not yet been incurred amounted to $345,064.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

(1) On March 10, 2020, the Board of Directors during its meeting resolved the distribution of earnings for the year of 2019 and proposed the distribution of employees’ compensation and directors’ and supervisors’ remuneration. The information is provided in Notes 6(18) F and 6(24).
(2) The Company sold certain residential units and parking spaces (shown as investment property) in a condominium located in Sanchong District, New Taipei City at an estimated amount of over $488,820 to the employees of the Group and the related parties meeting certain specific requirements.

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12. OTHERS

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

(2) Financial instruments

A. Financial instruments by category

nsolidated balance sheet plus net debt. nancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at amortised cost - current Cash and cash equivalents Notes receivable Accounts receivable (including related parties) Other receivables (including related parties) Guarantee deposits paid	December 31,2019 562,837 $ 955,070 630,998 93,252 731,671 11,312 4,975,317 3,061,482 44,809 11,066,748 $	December 31,2018
		986,614 $ 893,492 1,020,365 114,809 121,874 51,882 2,843,579 4,098,270 6,316
		10,137,201 $

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Financial liabilities Financial liabilities at amortised cost - current Short-term borrowings Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liability	December 31,2019 600,000 $ 3,663 23,103,444 4,354,924 118,936 28,180,967 $	December 31,2018
		3,130,000 $ - 20,555,893 3,149,254 -
		26,835,147 $

B. Financial risk management policies
(a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts and foreign currency swap contracts are used to hedge certain exchange rate risk. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.
(b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Company treasury. Exchange rate risk is measured through a forecast of highly probable USD and RMB expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.

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iii. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

-319-

Year ended December 31, 2019	Sensitivity analysis	Effect on other	Degree of Effect on profit comprehensive	variation or loss income				1% $ 63,019 $ -		1% $ - $ 287,679			1% $ 247,758 $ -	Year ended December 31, 2018	Sensitivity analysis	Effect on other	Degree of Effect on profit comprehensive	variation or loss income				1% $ 47,611 $ -		1% $ - $ 275,278			1% $ 220,260 $ -
December 31, 2019			Book value	Exchange rate (NTD)				30.010 $ 6,301,927		30.010 $ 28,767,926			30.010 $ 24,775,775	December 31, 2018			Book value	Exchange rate (NTD)				30.715 $ 4,761,132		30.715 $ 27,527,766			30.715 $ 22,026,003
	Foreign	currency	amount	(In thousands)				USD 208,766		USD 958,611			USD 825,584		Foreign	currency	amount	(In thousands)				USD 155,010		USD 896,232			USD 717,109
					(Foreign currency: functional currency)	Financial assets	Monetary items	USD:NTD	Non-Monetary items	USD:NTD	Financial liabilities	Monetary items	USD:NTD						(Foreign currency: functional currency)	Financial assets	Monetary items	USD:NTD	Non-Monetary items	USD:NTD	Financial liabilities	Monetary items	USD:NTD

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Total exchange gain (loss), including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2019 and 2018, amounted to $399,545 and ($336,265), respectively.

Price risk

i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.
ii. The Company’s investments in equity securities comprise shares and open-end funds issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2019 and 2018 would have increased/decreased by $11,908 and $19,938, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $10,483 and $10,083, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

The Company’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. During the years ended December 31, 2019 and 2018, the Company’s borrowings at variable rate were denominated in the NTD, USD and JPY.

(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms and the contract cash flows of debt instruments stated at amortised cost and fair value through profit or loss.

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ii. According to the Company’s internal management policy, the Company only trade with the good credit bank. According to the credit policy, each local entity in the Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iv. The Company classifies customer’s accounts receivable, contract assets and rents receivable in accordance with customer types. The Company applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.
v. According to the Company’s internal management policy, the default occurs when the contract payments are past due over 360 days.
vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
vii. The Company used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. On December 31, 2019 and 2018, the provision matrix is as follows:

At December 31, 2019 Not past due Up to 30 days past due 31 to 120 days past due Over one year past due	Expected loss rate 0%~0.3% 2%~5% 3%~10% 100%	Total book value 4,633,776 $ 214,178 127,975 32,354 5,008,283 $	Loss allowance
			- $ 304 308 32,354
			32,966 $

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At December 31,2018 Not past due Up to 30 days past due 31 to 120 days past due Over one year past due	Expected loss rate 0%~0.3% 2%~5% 3%~10% 100%	Total book value 2,476,163 $ 231,753 139,239 36,523 2,883,678 $	Loss allowance
			- $ 2,744 832 36,523
			40,099 $

viii.Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts receivable are as follows:

allowance for accounts receivable are as follows:
		2019
		Accounts
		receivable
At January 1	$	40,099
Reversal of impairment	(	2,956)
Write-offs	(	4,177)
At December 31	$	32,966
		2018
		Accounts
		receivable
At January 1_IAS 39	$	38,462
Adjustments under new standards		-
At January 1_IFRS 9		38,462
Provision for impairment		1,637
Effects of foreign exchange		-
At December 31	$	40,099

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(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.
ii. Company treasury invests surplus cash in interest bearing current accounts, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2019 and 2018, the Company held money market position of $2,249,280 and $2,001,406, respectively, that are expected to readily generate cash inflows for managing liquidity risk.

iii. The Company has the following undrawn borrowing facilities:

Expiring within one year Expiring beyond one year	December 31,2019 13,252,580 $ 4,000,000 17,252,580 $	December 31,2018
		8,870,600 $ 4,000,000
		12,870,600 $

iv. The table below analyses the Company’s non-derivative financial liabilities and netsettled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

sh flows.
December 31, 2019 Non-derivative financial liabilities: Short-term borrowings Accounts payable (including related parties) Other payables (including related parties) Lease liability	Less than 1year 600,172 $ 23,103,444 4,354,924 20,160	Over 1year
		- $ - - 102,480

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December 31, 2018 Non-derivative financial liabilities: Short-term borrowings Accounts payable (including related parties) Other payables (including related parties)	Less than 1year $ 3,132,326 20,555,893 3,149,254	Over 1year
		$ - - -

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks (including emerging stocks), beneficiary certificates and convertible bonds, is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in most derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in certain derivative instruments and investment property is included in Level 3.
B. The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable (including related parties), other receivables (including related parties), short-term borrowings, notes payable, accounts payable and other payables (including related parties) are approximate to their fair values.

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C. The related information of financial instruments were at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(a) The related information of the nature of the assets and liabilities is as follows:

December 31, 2019 Assets Recurring fair value measurements Financial assets mandatorily measured at fair value through profit or loss - current Equity securities Debt securities Beneficiary certificates Financial assets mandatorily measured at fair value through profit or loss - non current Equity securities Beneficiary certificates Financial assets measured at fair value through other comprehensive income - current Equity securities Financial assets measured at fair value through other comprehensive income - non current Equity securities Investment property (Note)	Level 1 451,697 $ 3,000 108,140 - 28,620 955,070 - - 1,546,527 $	Level 2 - $ - - - - - 12,758 - 12,758 $	Level3 - $ - - 518,318 84,060 - 80,494 8,961,010 9,643,882 $	Total
				451,697 $ 3,000 108,140 518,318 112,680 955,070 93,252 8,961,010
				11,203,167 $

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December 31, 2018 Assets Recurring fair value measurements Financial assets mandatorily measured at fair value through profit or loss - current Equity securities Debt securities Beneficiary certificates Financial assets mandatorily measured at fair value through profit or loss - non-current Equity securities Beneficiary certificates Financial assets measured at fair value through other comprehensive income - current Equity securities Financial assets measured at fair value through other comprehensive income - non-current Equity securities Investment property (Note)	Level 1 677,873 $ 13,132 295,609 - 507,282 893,492 - - 2,387,388 $	Level 2 - $ - - - - - 20,982 - 20,982 $	Level3 - $ - - 425,333 87,750 - 93,827 8,047,823 8,654,733 $	Total
				677,873 $ 13,132 295,609 425,333 595,032 893,492 114,809 8,047,823
				11,063,103 $

Note: Investment property measured at fair value.

(b) The methods and assumptions the Company used to measure fair value are as follows: The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Market quoted price	Listed shares Closing price	Emergingshares Average trade price	Open-end fund Net asset value	Convertible bond
				Closing

D. For the years ended December 31, 2019 and 2018, there was no transfer between Level 1 and Level 2.

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E. The following chart is the movement of Level 3 for the years ended December 31, 2019 and 2018:

2018:
					2019
			Beneficiary		Equity
			certificates		securities		Total
At January 1	$		87,750	$	519,160	$	606,910
Acquired in the year			-		30,000		-
Sold in the year			-	(	15,407)	(	15,407)
(Losses) gains recognised in profit
or loss	(		3,690)		78,392		74,702
Gains recognised in other
comprehensive income			-	(	13,333)	(	13,333)
At December 31	$		84,060	$	598,812	$	652,872
Movement of unrealised gain or
loss in profit or loss of assets and
liabilities held as at December
31, 2019 (Recorded under other
gains and losses)	($		3,690)	$	78,392	$	74,702
					2018
			Beneficiary		Equity
			certificates		securities		Total
At January 1	$		87,120	$	554,366	$	641,486
Sold in the year			-	(	16,150)	(	16,150)
Gains (losses) recognised in profit
or loss			630	(	20,060)	(	19,430)
Gains recognised in other
comprehensive income			-		1,004		1,004
At December 31		$	87,750	$	519,160	$	606,910
Movement of unrealised gain or
loss in profit or loss of assets
and liabilities held as at
December 31, 2018 (Recorded
under other gains and losses)		$	630	($	20,060)	($	19,430)

For the information on investment property movement in level 3, please refer to Note 6(10).

F. For the years ended December 31, 2019 and 2018, there was no transfer into or out from Level 3.

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G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of significant unobservable inputs to valuation model used in Level 3 fair value measurement:

measurement:
Unlisted shares " Venture capital shares Private equity fund investment Investment property equity instrument: Non-derivative	Fair value at December 31,2019	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
	$ 11,790 587,022 8,961,010 84,060	Market approach Net asset value Income approach Net asset value	Discount for lack of marketability N/A Revenue growth rate Discount rate N/A	- - -	The higher the discount for lack of marketability, the lower the fair value N/A The higher the revenue growth rate, the higher the fair value; the higher the discount rate, the lower the fair value N/A

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Unlisted shares " Venture capital shares Private equity fund investment Investment property Non-derivative equity instrument:	Fair value at December 31,2018 $ 26,910 492,250 8,047,823 87,750	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fairvalue
		Market approach Net asset value Income approach Net asset value	Discount for lack of marketability N/A Revenue growth rate Discount rate N/A	- - -	The higher the discount for lack of marketability, the lower the fair value N/A The higher the revenue growth rate, the higher the fair value; the higher the discount rate, the lower the fair value N/A

H. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

December 31, 2019

				December	31,2019	31,2019
Financial assets Equity instruments Beneficiary certificates	Input	Change ±1% ±1%	Recognised in	Unfavourable change 5,183) ($ 841) ( 6,024) ($ profit or loss	Recognised in other comprehensive income
			Favourable change 5,183 $ 841 6,024 $		Favourable change 805 $ - 805 $	Unfavourable change
	Market approach, Net asset value Net asset value					805) ($ -
						805) ($

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December 31, 2018

				December	31,2018	31,2018
Financial assets Equity instruments Beneficiary certificates	Input	Change ±1% ±1%	Recognised in	Unfavourable change 4,253) ($ 878) ( 5,131) ($ profit or loss	Recognised in other comprehensive income
			Favourable change 4,253 $ 878 5,131 $		Favourable change 938 $ - 938 $	Unfavourable change
	Market approach, Net asset value Net asset value					938) ($ -
						938) ($

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 5.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 6.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 7.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 8.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2) and (22) in the consolidated financial statements.
J. Significant inter-company transactions during the reporting periods: Please refer to table 9.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 10.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 11.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 13(1).

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14. SEGMENT INFORMATION

Not applicable.

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CHICONY ELECTRONICS CO., LTD. DETAILS OF CASH AND CASH EQUIVALENTS December 31, 2019

(In thousands of New Taiwan Dollars)

Items	Summary		Amount
Cash on hand and revolving funds Foreign currency on hand Foreign currency deposits Checking accounts and demand deposits	USD 4.5 @ 30.01 USD 20,297 @ 30.01		163 $ 135 609,108 122,265 731,671 $

-333-

CHICONY ELECTRONICS CO., LTD.	DETAILS OF FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT	Year ended December 31, 2019	(In thousands of New Taiwan Dollars)	No. of shares/sheets/ Face Acquisition Fair value	Name of financial instrument Summary units (Note) value Amount Interest rate Cost Unit price Amount	Listed stocks	Laster Tech Corporation Ltd. 4,923 449,675 $ $ 30.35 149,401 $	MOSA INDUSTRIAL CORPORATION 485 28,054 42.30 20,515	Newmax Technology Co., Ltd. 1,244 82,332 92.00 114,412	PharmaEngine, Inc. 1,134 173,771 68.50 77,679	ASLAN PHARMACEUTICALS LIMITED 1,100 54,655 8.10 8,910	Solar Applied Materials Technology Corp. 2,985 63,262 22.45 67,014	851,749 437,931	Emerging stocks	TWi Pharmaceuticals, Inc. 115 7,590 8.73 1,006	JHL BIOTECH, INC. 290 20,809 44.00 12,760	28,399 13,766	Beneficiary certificates	Fuh Hwa Digital Economy Fund 2,000 98,140 54.07 108,140	Domestic convertible bonds	Everlight Electronics Co., Ltd.	The sixth unsecured convertible bonds 30 3,015 100.00 3,000	981,303 $ $ 562,837	Note: In thousand shares/thousand sheet/thousand units

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CHICONY ELECTRONICS CO., LTD.	DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT	Year ended December 31, 2019	(In thousands of New Taiwan Dollars)	No. of shares/sheets/ Face Acquisition Fair value	Name of financial instrument Summary units (Note) value Amount Interest rate Cost Unit price Amount	Listed stocks	Clevo Co. 13,101 564,539 $ 36.80 $ 482,102 $	Genesis Photonics Inc. 304 21,350 4.44 1,351	AcBel Polytech Inc. 3,727 172,043 24.15 90,007	ShunOn Electronic Co. 11,708 252,855 30.90 361,785	Alcor Micro Corp. 1,406 55,326 14.10 19,825	1,066,113 $ 955,070 $	Note: In thousand shares/thousand sheet/thousand units

-335-

CHICONY ELECTRONICS CO., LTD. DETAILS OF ACCOUNTS RECEIVABLE December 31, 2019

(In thousands of New Taiwan Dollars)

Client Name	Summary		Amount	Remark
Client A Company B Company C Company D Company E Company F Company Others Less: Allowance for doubtful accounts Related parties Chicony Electronics (Suzhou) Co., Ltd. Chicony Electronics (ChongQing) Co., Ltd. Others			1,421,288 $ 496,393 453,957 382,615 315,139 300,304 1,431,050 4,800,746 32,966) ( 4,767,780 $ 138,588 $ 66,930 2,019 207,537 $	Amount past due over one year is $32,354 Each individual customer balance did not exceed 5% of the account balance.

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CHICONY ELECTRONICS CO., LTD. DETAILS OF OTHER RECEIVABLES – RELATED PARTY December 31, 2019

(In thousands of New Taiwan Dollars)

Items Unikey Electronics Co., Ltd. Quansun Investment Corp. Ltd. Real Young Electronics Co., Ltd. Chicony Global Inc. Qun-Jing Power Co., Ltd. Others	Summary	Amount 1,255,811 $ 604,982 582,932 233,937 192,626 171,747 3,042,035 $	Remark

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CHICONY ELECTRONICS CO., LTD. DETAILS OF INVENTORIES December 31, 2019

(In thousands of New Taiwan Dollars)

Items	Summary	Costs Net realisable value 3,916 $ 3,916 $ 1,093,428 1,352,786 488,603 615,000 104,367) ( - 1,481,580 $ 1,971,702 $ Amount	Remark
		Costs 3,916 $ 1,093,428 488,603 104,367) ( 1,481,580 $
Raw materials Work in progress Finished goods Less: Allowance for valuation loss

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						At December 31	Shares Fair value	15,380 246,080 $	7,500 68,672	10,000 107,820	3,000 30,000	454 65,746		9,000 84,060	- -		9,000 28,620	630,998 $
CHICONY ELECTRONICS CO., LTD.		DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS – NON-CURRENT	Year ended December 31, 2019		(In thousands of New Taiwan Dollars)	At January 1 Addition for the year Decrease for the year	Shares Fair value Shares Amount Shares Amount Name and type	WK Venture Capital Management Co., Ltd. Stock 15,380 192,796 $ - 53,284 $ - - $	Top Taiwan Venture Capital Management Co., Ltd. " 7,500 71,689 - - - 3,017) (	Chen Ding Venture Capital Management Co., Ltd. " 10,000 98,455 - 9,365 - -	Sheng Da Venture Capital Management Co., Ltd. " - - 3,000 30,000 - -	Magi Capital Venture Co., Ltd. Preferred stock 1,995 62,393 - 18,760 1,541) ( 15,407) (	Fuh Hwa Smart Energy Securities Investment Trust Beneficiary	Fund certificates 9,000 87,750 - - - 3,690) (	Fuh Hwa Securities Investment Trust Fund " 19,803 471,102 - - 19,803) ( 471,102) (	Fuh Hwa New Oriental Securities "	Investment Trust Fund 9,000 36,180 - - - 7,560) (	1,020,365 $ 111,409 $ 500,776) ($

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CHICONY ELECTRONICS CO., LTD.	DETAILS OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME – NON-CURRENT	Year ended December 31, 2019	(In thousands of New Taiwan Dollars)	At January 1 Addition for the year Decrease for the year At December 31	Shares Fair value Shares Amount Shares Amount Shares Fair value Name and type	TAIPEI TECH Venture Capital Co., Ltd. Stock 3,500 40,305 $ - 6,122 $ - - $ 3,500 46,427 $	Maxima Ventures I, Inc. " 13 131 - - - - 13 131	Maxima Ventures II, Inc. " 3,000 22,542 - - - 3,765) ( 3,000 18,777	Taiwan Cultural and Creative Co., Ltd. " 1,600 3,939 - - - 570) ( 1,600 3,369	MKD Technology Inc. " 1,600 26,910 - - - 15,120) ( 1,600 11,790	Genesis Photonics Inc. Private stock 18,568 20,982 - - 14,344) ( 8,224) ( 4,225 12,758	114,809 $ 6,122 $ 27,679) ($ 93,252 $	Note: The reason of additions and decreases in financial assets at fair value through other comprehensive income - non-current was fair value valuation.

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CHICONY ELECTRONICS CO., LTD.
DETAILS OF INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD
(INCLUDING OTHER NONCURRENT LIABILITIES – OTHER)
Year ended December 31, 2019
(In thousands of New Taiwan Dollars)
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Amount
Shares
Ownership
Amount
Unit
price
Total amount
Fair value or net assets value
Collateral
Remark
Name
Balance at January 1
Addition for the year
Reduction for the year
Transfer for the year
Balance at December 31

Shown as investments accounted
for under equity method
Chicony Overseas Inc.
1,000
20,885,683
$ -
2,915,246
$ -
1,000,585)
($ -
-
$ 1,000
100%
22,800,344
$ -
22,734,913
$ None
Chicony Electronics
322,427
193
4,000,957
409,214
-
178,651)
(
-
-
4,323,384
70.73%
230,756
-
230,756
"
(Thailand) Co., Ltd.
"
Hipro Overseas (BVI) Inc.
12,560,000
2,747,568
-
38,031
-
64,175)
(
-
-
12,560,000
100%
2,721,424
-
2,721,424
"
Chicony Power Technology Co.,
184,690,594
2,631,400
3,719,000
1,296,825
-
781,617)
(
-
-
188,409,594
49.28%
3,146,608
-
4,082,204
"
XAVi Electronics Ltd.
44,014,301
265,241
1,627,972
162,300
-
69,353)
(
-
-
45,642,273
45.94%
358,188
-
459,101
"
Chicony Global Inc.
1,000,000
3,353,224
-
281,166
-
647,678)
(
-
-
1,000,000
100%
2,987,312
-
3,312,396
"
Unikey Electronics Co., Ltd.
150,000,000
720,549
-
752,836
-
269,307)
(
-
-
150,000,000
100%
1,204,078
-
3,088,591
"
Shown as other non-current
liabilities - other
Hipro Electronics Ltd.
4,660,000
450,063)
(
-
179,393
-
51,383)
(
-
-
4,660,000
100%
322,053)
(
-
1,118,763
None
30,153,795
$ 6,035,011
$ 3,062,749)
($ -
$ 33,126,657
$ Note 1: The reason of additions in investment accounted for under equity method was increasing in share of profit of associates and joint ventures accounted for under equity method, financial statements translation differences of foreign operations under equity method,
unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income under equity method, and cash dividends paid to the subsidiaries.
Note 2: The reason of decrease in investment accounted for under equity method was disposal of investments, increasing in share of loss of associates and joint ventures accounted for under equity method, financial statements trasnlation differences of foreign operations
under equity method, unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income under equity method, adjustments to share of changes in equity of associates and joint ventures, and cash dividends
received from the subsidiaries.
Note 3: The reason of differences between the balance at December 31 and the net assets value of investments was unrealised gross profit and subsidiaries holding the Copmany's stock which treated as treasury stock writting off investments accounted for under equity
method.

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-342-

-343-

							Remark	None
CHICONY ELECTRONICS CO., LTD.		DETAILS OF SHORT-TERM BORROWINGS	December 31, 2019		(In thousands of New Taiwan Dollars)	Balance at Range of interest Loan	Type Note December 31 Contract period rate commitments Collateral	Credit loans (Note) - 600,000 $ Less than 1 year 0.8%-0.85% 13,852,580 $ -	Note: The partners of credit loans were Bank of Communications Co., Ltd. and Crédit Agricole Corporate and Investment Bank.

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CHICONY ELECTRONICS CO., LTD. DETAILS OF ACCOUNTS PAYABLE December 31, 2019

(In thousands of New Taiwan Dollars)

Client Name	Summary		Amount	Remark
Client A Company B Company C Company D Company E Company Others Related parties Chicony Electronics (DongGuan) Co., Ltd. Chicony Electronics (Suzhou) Co., Ltd. Mao-Ray Electronics (DongGuan) Co., Ltd. Others			87,571 $ 66,701 32,435 25,468 20,380 106,669 339,224 $ 13,665,270 $ 5,625,590 3,398,726 74,634 22,764,220 $	Each individual customer balance did not exceed 5% of the account balance.

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CHICONY ELECTRONICS CO., LTD. DETAILS OF OTHER PAYABLES December 31, 2019 (In thousands of New Taiwan Dollars)

Please refer to Note 6(12) Other payables.

-346-

						Remark
CHICONY ELECTRONICS CO., LTD.		DETAILS OF LEASE LIABILITIES	December 31, 2019		(In thousands of New Taiwan Dollars)	Lease term Discount rate Balance at December 31	February 1, 2018 to January 31, 2026 1% $ 118,936
						Items	Buildings and structures

-347-

CHICONY ELECTRONICS CO., LTD. DETAILS OF SALES REVENUE Year ended December 31, 2019

(In thousands of New Taiwan Dollars)

Items	Shipments 32,845 thousand pieces 43,231 thousand pieces	Amount 7,305,403 $ 20,208,431 856,008 28,369,842 $	Remark
Electronic component products Consumer and other electronic products Others

-348-

CHICONY ELECTRONICS CO., LTD. DETAILS OF OPERATING COSTS Year ended December 31, 2019

(In thousands of New Taiwan Dollars)

Items		Amount
Materials at January 1	$	-
Add: Purchases		10,305
Less: Materials at December 31	(	3,916)
Cost of materials sold	(	6,380)
Transfer to operating expenses	(	9)
Materials used during the peroid		-
Direct labor		-
Manufacturing expenses		-
Manufacturing cost		-
Add: Finished goods inventory at January 1		1,615,127
Purchases		7,396,036
Less: Finished goods inventory at December 31	(	1,582,031)
Transfer to operating expenses	(	2,250)
Cost of goods sold of triangular trade		15,578,235
Cost of materials sold		6,380
Loss on decline (gain on reversal of) in	(	30,833)
market value
Others		44,485
Operating cost	$	23,025,149

-349-

CHICONY ELECTRONICS CO., LTD. DETAILS OF EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTISATION Year ended December 31, 2019

(In thousands of New Taiwan Dollars)

Items		Selling expenses		General and administrative expenses		Reserch and development expenses		Total
Wages and salaries Pension costs Rental expenses Travelling expenses Shipment expenses Postage and phone expenses Repair and maintenance expenses Advertising expenses Utilities Insurance expenses Entertainment Food stipend Taxes Depreciation Amortisation Employee benefits Commission Export charge fees Donations Service fees Inspection fees Research material expenses Others		362,408 $ 9,029 992 13,421 147,889 2,768 9,333 28,209 1,279 24,840 9,658 4,533 8,347 21,351 1,030 3,014 675,846 68,375 - 11,256 22,762 21 47,766 1,474,127 $		689,230 $ 16,693 712 19,403 - 4,714 18,578 220 6,642 31,245 3,391 5,964 44,933 41,474 3,654 3,685 - 1,078 5,750 40,505 2,141 - 71,747 1,011,759 $		1,003,645 $ 25,849 1,200 34,951 - 1,047 825 1 2,856 44,060 1,163 10,917 6,107 15,256 8,439 7,455 - 402 - 15,609 4,778 16,151 60,124 1,260,835 $		2,055,283 $ 51,571 2,904 67,775 147,889 8,529 28,736 28,430 10,777 100,145 14,212 21,414 59,387 78,081 13,123 14,154 675,846 69,855 5,750 67,370 29,681 16,172 179,637 3,746,721 $

-350-

CHICONY ELECTRONICS CO., LTD. DETAILS OF OPERATING EXPENSES Year ended December 31, 2019

(In thousands of New Taiwan Dollars)

Please refer to Note 6(23) Personnel expenses, depreciation and amortisation and Note 6(24) Employee benefit expenses

-351-

-352-

Item
Value
Footnote
Collateral
Limit on loans
granted to
a single party
Ceiling on
total loans
granted
Interest
rate
Nature of
loan
Amount of
transactions
with the
borrower
Reason
for short-term
financing
Allowance
for
doubtful
accounts
Maximum
outstanding
balance during
the year ended
December 31, 2019
Balance at
December
31, 2019
Actual amount
drawn down
No.
Creditor
Borrower
General
ledger
account
Is a related
party

-353-

Company
name
Relationship
with the
endorser/
guarantor
Number
Endorser/
guarantor
Footnote
Amount of
endorsements/
guarantees
secured with
collateral
Ratio of
accumulated
endorsement/
guarantee
amount to net
asset value of
the endorser/
guarantor
company
Ceiling on
total amount of
endorsements/
guarantees
provided
Provision of
endorsements/
guarantees to
the party in
Mainland
China
Party being
endorsed/guaranteed
Limit on
endorsements/
guarantees
provided for a
single party
Maximum
outstanding
endorsement/
guarantee
amount as of
December 31, 2019
Provision of
endorsements/
guarantees by
parent
company to
subsidiary
Provision of
endorsements/
guarantees by
subsidiary to
parent
company
Outstanding
endorsement/
guarantee
amount at
December 31, 2019
Actual amount
drawn down
CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES
Provision of endorsements and guarantees to others
Year ended December 31, 2019
Table 2
Expressed in thousands of NTD
(Except as otherwise indicated)

(Note 1)
(Note 2,3)
0
The Company
CEZ
3
6,817,094
$ 369,780
$ 360,120
$ 134,496
$ -
1.32%
13,634,188
$ Y
N
N
-
(USD 12,000)
(USD 12,000)
(EUR 4,000)

-354-

Number of shares
Book value
Ownership
(%)
Fair value
Footnote
Securities held by
Relationship with the
securities issuer
General
ledger account
As of December 31, 2019
(Except as otherwise indicated)
CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES
Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
December 31, 2019
Table 3
Expressed in thousands of NTD
Marketable securities

The Company
Common stock
Laster Tech Corporation Ltd.
Corporate director
Financial assets at fair value through profit or loss - current
4,922,604
149,401
$ 6.50%
149,401
$ -
The Company
Common stock
Newmax Technology Co., Ltd.
"
"
1,243,607
114,412
0.67%
114,412
-
The Company
Common stock
PharmaEngine, Inc.
-
"
1,134,000
77,679
0.77%
77,679
-
The Company
Common stock
Aslan Pharmaceuticals Limited
-
"
1,100,000
8,910
0.58%
8,910
-
The Company
Common stock
TWi Pharmaceuticals, Inc.
-
"
115,000
1,006
0.17%
1,006
-
The Company
Common stock
JHL BIOTECH, INC.
-
"
290,000
12,760
0.15%
12,760
-
The Company
Common stock
Solar Applied Materials Technology Corp.
-
"
2,985,019
67,014
0.60%
67,014
-
The Company
Common stock
MOSA INDUSTRIAL CORPORATION
-
"
485,000
20,515
0.27%
20,515
-
The Company
Beneficiary certificate
Fuh Hwa Digital Economy Fund
-
"
2,000,000
108,140
-
108,140
-
The Company
Bond
Everlight Electronics Co., Ltd.
The sixth unsecured convertible bonds
-
"
30,000
3,000
-
3,000
-
The Company
Common stock
WK Venture Capital XI
Corporate director
Financial assets at fair value through profit or loss - non-current
15,380,000
246,080
15.38%
246,080
-
The Company
Common stock
Top Taiwan Venture Capital Group
"
"
7,500,000
68,672
9.38%
68,672
-
The Company
Common stock
Chengding Venture Capital Group
"
"
10,000,000
107,820
7.41%
107,820
-
The Company
Common stock
Sheng Da Venture Capital Group
-
"
3,000,000
30,000
10.71%
30,000
-
The Company
Preferred stock
Magi Capital Venture Co., Ltd
-
"
454,296
65,746
4.37%
65,746
-
The Company
Beneficiary certificate
Fuh Hwa Smart Energy Securities
Investment Trust Fund
-
"
9,000,000
84,060
-
84,060
-
The Company
Beneficiary certificate
Fuh Hwa New Oriental Securities
Investment Trust Fund
-
"
9,000,000
28,620
-
28,620
-
The Company
Common stock
Clevo Co.
Common chairman
Financial assets at fair value through other comprehensive income - current
13,100,608
482,102
1.96%
482,102
-
The Company
Common stock
Genesis Photonics Inc.
-
"
304,350
1,351
0.43%
1,351
-
The Company
Common stock
AcBel Polytech Inc.
-
"
3,727,000
90,007
0.72%
90,007
-
The Company
Common stock
ShunOn Electronic Co.
Corporate director
"
11,708,254
361,785
7.91%
361,785
-
The Company
Common stock
Alcor Micro,Corp.
"
"
1,406,000
19,825
1.87%
19,825
-
The Company
Private equity
Genesis Photonics Inc.
-
Financial assets at fair value through other comprehensive income - non-current
4,224,458
12,758
6.03%
12,758
-
The Company
Common stock
Taipei Tech innoFund
Corporate director
"
3,500,000
46,427
11.67%
46,427
-

-355-

		Footnote	-	-	-	-	-	-	-	-	-	-			-	-	-	-	-		-		-	-	-	-	-	-	-	-	-	Note 2	-	-	Note 3	-	-	-	-	-			-	-	-	-	-	-	-	-	-	-	-	-
		Fair value	131 $	18,777	3,369	11,790	279,587	36,488	22,754	68,100	13,800	1,045		250,000		112,325	20,060	68,672	107,820		19,080		196,140	166,998	47,657	8,402	3,664	13,824	5,977	19,897	418,446	1,440,815	1,731,992	615,664	1,884,513	117,626	482,573	73,204	9,248	280		10,000		434,858	227,095	99,756	17,800	30,009	371,828	4,854	1,484	29,417	7,986	238,392 $
As of December 31, 2019	Ownership	Book value (%)	131 $ 2.35%	18,777 8.21%	3,369 5.78%	11,790 6.96%	279,587 1.64%	36,488 1.59%	22,754 0.03%	68,100 0.10%	13,800 0.16%	1,045 0.18%		250,000 -		112,325 -	20,060 1.00%	68,672 9.38%	107,820 7.41%		19,080 -		196,140 -	166,998 0.68%	47,657 0.20%	8,402 2.70%	3,664 0.02%	13,824 0.13%	5,977 2.83%	19,897 5.00%	418,446 1.70%	1,440,815 2.20%	1,731,992 10.17%	615,664 2.50%	1,884,513 2.88%	117,626 -	482,573 -	73,204 3.18%	9,248 0.09%	280 0.05%		10,000 -		434,858 0.68%	227,095 -	99,756 -	17,800 -	30,009 -	371,828 1.51%	4,854 0.11%	1,484 0.08%	29,417 0.00%	7,986 0.63%	238,392 $ -
		Number of shares	13,125	3,000,000	1,600,000	1,600,000	3,038,983	1,202,252	228,000	200,000	300,000	119,000		2,500,000		2,077,391	1,000,000	7,500,000	10,000,000		6,000,000		21,000,000	4,538,000	920,000	1,892,392	80,000	192,000	1,979,291	1,500,000	11,370,823	16,188,935	18,825,998	16,730,000	21,174,298	122,487	-	2,412,000	135,000	10,000		100,000		8,747	7,682,533	3,324,091	1,022,000	602,373	10,104,000	157,087	248,500	270,000	84,482	10,374,483
	General	ledger account	Financial assets at fair value through other comprehensive income - non-current	"	"	"	Financial assets at fair value through profit or loss - current	"	"	"	"	"		"		"	Financial assets at fair value through profit or loss - non-current	"	"		"		"	Financial assets at fair value through other comprehensive income - current	"	"	"	"	Financial assets at fair value through other comprehensive income - non-current	"	Financial assets at fair value through other comprehensive income - current	"	Financial assets at fair value through profit or loss - current	Financial assets at fair value through other comprehensive income - current	"	Financial assets at fair value through profit or loss – non-current	Financial assets at amortised cost - non-current	Financial assets at fair value through profit or loss - current	"	"		"		"	Financial assets at fair value through profit or loss - non-current	"	"	"	Financial assets at fair value through other comprehensive income - current	"	"	"	"	Financial assets at fair value through other comprehensive income - non-current
	Relationship with the securities issuer		-	-	-	-	Corporate director	"	-	-	-	-			-	-	Corporate director	"	"		-		-	Common chairman	-	-	-	"	-	Corporate director	Common chairman	The Company	Corporate director	Common chairman	The Company	-	-	Corporate director	-	-			-	-	-	-	-	-	Common chairman	Corporate director	-	-	-	-
		Marketable securities	Maxima Ventures I, Inc.	Maxima Ventures II, Inc.	Taiwan Cultural and Creative Co., Ltd.	MKD Technology Inc.	Newmax Technology Co., Ltd.	Laster Tech Corporation Ltd.	Powertech Technology Inc.	Phison Electronics Corp.	Apex International Co., Ltd.	TWi Pharmaceuticals, Inc.	Everlight Electronics Co., Ltd.		The sixth unsecured convertible bonds	Fuh Hwa Digital Economy Fund	WK Venture Capital XI	Top Taiwan Venture Capital Group	Chengding Venture Capital Group	Fuh Hwa New Oriental Securities	Investment Trust Fund	Fuh Hwa Smart Energy Securities	Investment Trust Fund	Clevo Co.	Kinsus Interconnect Technology Corp.	Genesis Photonics Inc.	Cheng Uei Precision Industry Co., Ltd.	FLYTECH TECHNOLOGY CO., LTD.	Genesis Photonics Inc.	Taipei Tech innoFund	Clevo Co.	The Company	Newmax Technology Co., Ltd.	Clevo Co.	The Company	PRP CE1 BC1 Inc.	PRP CE1 BC1 Inc.	Laster Tech Corporation Ltd.	PharmaEngine, Inc.	GOMAJI Corp., LTD	Everlight Electronics Co., Ltd.		The sixth unsecured convertible bonds	Q Technology (Group) Company Limited	WRV II, L.P	MagiCapital Fund II, L.P.	New Riders L.P.	SmartSens Technology Co.,Ltd	Clevo Co.	ShunOn Electronic Co.	Alpha Professional Holdings Limited	CTBC Securities Co., Ltd.	Merrimack Pharmacenticals, Inc.	SAGA-CHINA
			Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Bond			Beneficiary certificate	Common stock	Common stock	Common stock	Beneficiary certificate		Beneficiary certificate		Common stock	Common stock	Common stock	Common stock	Common stock	Private equity	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Preferred stock	Bond	Common stock	Common stock	Common stock	Bond			Common stock	Beneficiary certificate	Beneficiary certificate	Beneficiary certificate	Common stock	Common stock	Common stock	Common stock	Common stock	Common stock	Preferred stock
		Securities held by	The Company	The Company	The Company	The Company	CP	CP	CP	CP	CP	CP	CP			CP	CP	CP	CP	CP		CP		CP	CP	CP	CP	CP	CP	CP	HEC	HEC	UNIKEY	UNIKEY	UNIKEY	CGI	CGI	COI	COI	COI	COI			COI	COI	COI	COI	COI	COI	COI	COI	COI	COI	COI
																									-356-

Number of shares
Book value
Ownership
(%)
Fair value
Footnote
Securities held by
Relationship with the
securities issuer
General
ledger account
As of December 31, 2019
Marketable securities

-357-

-358-

						Other	commitments	None				"
If the counterparty is a related party, information as		to the last transaction of the real estate is disclosed below:	Reason for	Original owner Relationship acquisition of	Relationship who sold the between the original Date of the Basis or real estate and	Real estate Real estate Transaction Status of with the real estate to owner and the original reference used in status of the real	acquired by acquired Date of the event amount payment Counterparty counterparty the counterparty acquirer transaction Amount setting the price estate	CPSZ Construction 2018/12/27 $ 1,103,069 709,310 $ Suzhou Weiye Group None - - - $ - Contract Plant	in process (Date of contract (RMB 247,825 Co., Ltd. (For the Purpose	signing) thousand) of Conducting	Business)	The Company Investment 2019/7/31 839,561 $ 376,095 $ Kunfu Construction " - - - - Price Residential	property Co., Ltd. etc. comparison and compound	price negotiation building	Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate acquired should be appraised pursuant to the regulations.	Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity	attributable to owners of the parent in the calculation.	Note 3: Date of the event referred to herein is the date of contract signing date, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary	amount of the transaction, whichever is earlier.
															-359-

-360-

-361-

Purchases
(sales)
Amount
Percentage of
total purchases
(sales)
Credit term
Unit price
Credit term
Balance
Percentage of
total notes/accounts
receivable (payable)
Footnote
Purchaser/seller
Counterparty
Relationship with the
counterparty (Note 3)
Transaction
Differences in transaction
terms compared to third
party transactions
Notes/accounts receivable (payable) Qun-Yang
CEM3
Affiliated company
Sales
124,596)
($ 100
60~90 days
Note 2
60~90 days
26,221
$ 100
-
CEM3
Qun-Yang
Affiliated company
Purchases
124,596
1
60~90 days
Note 1
60~90 days
26,221)
(
-
-
CPSZ
CEM3
Affiliated company
Sales
502,751)
(
3
90 days
Note 2
90 days
291,460
5
-
CEM3
CPSZ
Affiliated company
Purchases
502,751
3
90 days
Note 1
90 days
291,460)
(
5
-
CP
CEM3
Affiliated company
Sales
680,203)
(
1
90 days
Note 2
90 days
485,253
-
-
CEM3
CP
Affiliated company
Purchases
680,203
4
90 days
Note 1
90 days
485,253)
(
8
-
CP
CEM2
Affiliated company
Sales
747,776)
(
2
90 days
Note 2
90 days
210,086
3
-
CEM2
CP
Affiliated company
Purchases
747,776
4
90 days
Note 1
90 days
210,086)
(
4
-
CP
CEM5
Affiliated company
Sales
295,779)
(
1
90 days
Note 2
90 days
200,609
-
-
CEM5
CP
Affiliated company
Purchases
295,779
8
90 days
Note 1
90 days
200,609)
(
17
-
CPI
CEM3
Affiliated company
Sales
462,023)
(
3
90 days
Note 2
90 days
-
3
-
CEM3
CPI
Affiliated company
Purchases
462,023
3
90 days
Note 1
90 days
-
-
-
CPI
CEM5
Affiliated company
Sales
289,923)
(
2
90 days
Note 2
90 days
-
1
-
CEM5
CPI
Affiliated company
Purchases
289,923
8
90 days
Note 1
90 days
-
-
-
CP
CPUS
Affiliated company
Sales
1,024,656)
(
3
90 days
Note 2
90 days
409,201
5
-
CPUS
CP
Affiliated company
Purchases
1,024,656
100
90 days
Note 1
90 days
409,201)
(
100
-
CPI
CP
Affiliated company
Sales
12,800,291)
(
93
45 days
Note 2
45 days
1,464,316
92
-
CP
CPI
Affiliated company
Purchases
12,800,291
59
45 days
Note 1
45 days
1,464,316)
(
14
-
CP
CEZ
Affiliated company
Sales
270,875)
(
1
90 days
Note 2
90 days
41,230
-
-
CEZ
CP
Affiliated company
Purchases
270,875
37
90 days
Note 1
90 days
41,230)
(
43
-
CPDG
CP
Affiliated company
Sales
5,448,640)
(
39
90 days
Note 2
90 days
2,377,120
77
-
CP
CPDG
Affiliated company
Purchases
5,448,640
15
90 days
Note 1
90 days
2,377,120)
(
23
-
CPDG
CPI
Affiliated company
Sales
4,858,322)
(
60
45 days
Note 2
45 days
-
-
-
CPI
CPDG
Affiliated company
Purchases
4,858,322
36
45 days
Note 1
45 days
-
-
-
CPSZ
CP
Affiliated company
Sales
7,461,190)
(
37
45 days
Note 2
45 days
4,527,265
85
-
CP
CPSZ
Affiliated company
Purchases
7,461,190
17
45 days
Note 1
45 days
4,527,265)
(
43
-
CPSZ
CPI
Affiliated company
Sales
6,034,179)
(
59
45 days
Note 2
45 days
-
9
-
CPI
CPSZ
Affiliated company
Purchases
6,034,179
44
45 days
Note 1
45 days
-
20
-
CPCQ
CP
Affiliated company
Sales
3,078,550)
(
33
45 days
Note 2
45 days
1,949,480
79
-
CP
CPCQ
Affiliated company
Purchases
3,078,550
8
45 days
Note 1
45 days
1,949,480)
(
19
-
CPCQ
CPI
Affiliated company
Sales
2,644,660)
(
53
45 days
Note 2
45 days
-
6
-
CPI
CPCQ
Affiliated company
Purchases
2,644,660
19
45 days
Note 1
45 days
-
7
-

-362-

Purchases
(sales)
Amount
Percentage of
total purchases
(sales)
Credit term
Unit price
Credit term
Balance
Percentage of
total notes/accounts
receivable (payable)
Footnote
Purchaser/seller
Counterparty
Relationship with the
counterparty (Note 3)
Transaction
Differences in transaction
terms compared to third
party transactions
Notes/accounts receivable (payable) CPCQ
CPSZ
Affiliated company
Sales
872,312)
($ 13
60 days
Note 2
60 days
261,583
$ 14
-
CPSZ
CPCQ
Affiliated company
Purchases
872,312
7
60 days
Note 1
60 days
261,583)
(
6
-
GSE
CPSZ
Affiliated company
Sales
256,007)
(
28
60 days
Note 2
60 days
86,377
22
-
CPSZ
GSE
Affiliated company
Purchases
256,007
2
60 days
Note 1
60 days
86,377)
(
1
-
GSE
CPDG
Affiliated company
Sales
381,428)
(
44
60 days
Note 2
60 days
119,982
50
-
CPDG
GSE
Affiliated company
Purchases
381,428
5
60 days
Note 1
60 days
119,982)
(
4
-
GSE
CPCQ
Affiliated company
Sales
130,869)
(
16
60 days
Note 2
60 days
33,388
-
-
CPCQ
GSE
Affiliated company
Purchases
130,869
3
60 days
Note 1
60 days
33,388)
(
-
-
Systemax
XAVi
Affiliated company
Sales
736,222)
(
100
45~180 days
Note 2
45~180 days
277,549
100
-
XAVi
Systemax
Affiliated company
Purchases
736,222
41
45~180 days
Note 1
45~180 days
277,549)
(
92
-
XAVi Suzhou
Systemax
Affiliated company
Sales
733,114)
(
50
45~180 days
Note 2
45~180 days
-
-
-
Systemax
XAVi Suzhou
Affiliated company
Purchases
733,114
57
45~180 days
Note 1
45~180 days
-
-
-
XAVi Suzhou
XAVi
Affiliated company
Sales
1,034,799)
(
35
45~180 days
Note 2
45~180 days
169,994
-
-
XAVi
XAVi Suzhou
Affiliated company
Purchases
1,034,799
97
45~180 days
Note 1
45~180 days
169,994)
(
-
-
CEM3
Newmax
Affiliated company
Purchases
206,116
1
60~90 days
Note 1
60~90 days
40,259)
(
1
-
CEM3
KAPOK
Other related party
Sales
491,115)
(
3
60 days
Note 2
60 days
206,145
2
-
CEM3
JiaXing ShunOn
Other related party
Purchases
168,823
1
60~90 days
Note 1
60~90 days
44,631)
(
1
-
CEM3
Farwin (Kun Shan) Co., Ltd.
Other related party
Purchases
335,389
2
60~90 days
Note 1
60~90 days
49,667)
(
1
-
CEM3
ShunOn Electronic Co.
Other related party
Purchases
393,317
2
60~90 days
Note 1
60~90 days
107,401)
(
3
-
CEM5
ShunOn Electronic Co.
Other related party
Purchases
330,217
9
60~90 days
Note 1
60~90 days
37,434)
(
3
-
CP
KAPOK
Other related party
Sales
429,059)
(
1
60 days
Note 2
60 days
116,100
2
-
Note 1: Purchases from related parties were basically the same as those from third parties.
Note 2: Sales to related parties were basically the same as those to third parties.

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1.76	1.02	2.36	9.01	5.13	9.62	19.13	14.13	8.20	7.87	7.24	1.59	3.07	1.47	4.88	4.76	1.20	1.96	1.11	1.84	13.83	2.05	3.01	8.06	6.34	6.52	3.33	2.73	2.86	5.89
Note 5	Note 5	Note 7	Note 7	Note 5	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 5	Note 4	Note 5	Note 4	Note 4	Note 5	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4	Note 4
$ 1,255,811	730,905	1,688,101	6,437,757	3,665,910	8,907,899	13,665,270	13,078,447	7,585,918	5,625,590	6,699,379	1,138,489	2,837,209	1,048,121	4,517,159	3,398,726	1,112,214	1,398,722	1,024,656	1,314,328	12,800,291	1,464,316	2,149,721	7,461,190	4,527,265	6,034,179	3,078,550	1,949,480	2,644,660	5,448,640
Other receivables-related party	Other receivables-related party	Other receivables-related party	Other receivables-related party	Other receivables-related party	Sales	Accounts receivable-related party	Sales	Sales	Accounts receivable-related party	Sales	Accounts receivable-related party	Sales	Accounts receivable-related party	Sales	Accounts receivable-related party	Sales	Other receivables-related party	Sales	Other receivables-related party	Sales	Accounts receivable-related party	Other receivables-related party	Sales	Accounts receivable-related party	Sales	Sales	Accounts receivable-related party	Sales	Sales
1	2	3	3	3	2	2	3	2	2	3	3	3	3	2	2	3	3	3	3	3	3	3	3	3	3	3	3	3	3
UNIKEY	The Company	Mao-Ray	CEM2	CGI	The Company	The Company	CGI	The Company	The Company	CGI	CGI	CGI	CGI	The Company	The Company	CGI	CGI	CPUS	CPHK	CP	CP	CGI	CP	CP	CPI	CP	CP	CPI	CP
The Company	CGI	CGI	CGI	COI	CEM2	CEM2	CEM2	CEM3	CEM3	CEM3	CEM3	CEM5	CEM5	Mao-Ray	Mao-Ray	Mao-Ray	Mao-Feng	CP	CP	CPI	CPI	HOI	CPSZ	CPSZ	CPSZ	CPCQ	CPCQ	CPCQ	CPDG
0	1	1	1	2	3	3	3	4	4	4	4	5	5	6	6	6	7	8	8	9	9	10	11	11	11	12	12	12	13

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3.33	5.25	1.12
Note 4	Note 4	Note 4
$ 2,377,120	4,858,322	1,034,799
Accounts receivable-related party	Sales	Sales
3	3	3
CP	CPI	XAVi
CPDG	CPDG	XAVi-Suzhou
13	13	14

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Company name
Accumulated amount of remittance from
Taiwan to Mainland China as of December 31,
2019 (Note 3)
Investment amount approved by the
Investment Commission of the
Ministry of Economic Affairs (MOEA)
(Note 3)
Ceiling on investments in
Mainland China imposed by the
Investment Commission of MOEA

The company
$ 2,360,707 $ 3,322,467 $ 16,361,025
(USD 78,664 thousand)
(USD 110,712 thousand)
Note 1: Investment methods are classified into the following three categories:
(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China, the
investing companies includes:
A. Chicony Overseas Inc.
B. Real Young Elec. Co., Ltd.
C. Mao-Feng International Inc.
D. Global Faith Inc.
E. Kuang Mao International Inc.
F. Chicony Power Technology Hong Kong Limited(CPHK)
G. XAVi Overseas Ltd.
H. WitsLight Technology Co., Ltd..
(3) Others.
Note 2: In the ‘Investment income (loss) recognized by the Company for the year ended December 31, 2019’ column:
(1)It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2)Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
with accounting firm in R.O.C.
B.The financial statements were audited and attested by R.O.C. parent company’s CPA.
C.Others
Note 3: The numbers in this table are expressed in New Taiwan Dollars.
Note 4: Calculated based on the Company’s ending combined shareholding ratio.
A.The financial statements were audited and attested by international accounting firm which has cooperative relationship

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6.Whether financial difficulty of the Company and affiliated enterprises occurred, and the impact on the company’s financial position: None.

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VII. Review and Analysis of Financial Position and Financial Performance and Risks

1. Financial Position

(I) Table of Analytical Changes in Consolidated Assets, Liabilities, and Shareholders' Equity in the Last Two Years Unit: NT$ thousands

Unit: NT$ thousands

Year Item	2019	2018	Different Amount	Different Amount	Analytical Description of the Increase and Decrease Ratio(Note)
			Amount	%
Current Assets	47,180,486	46,422,143	758,343	1.6
Financial Asset and Investment	2,869,857	2,883,639	(13,782)	(0.5)
Property,Plant,and Equipment	12,821,680	12,371,429	450,251	3.6
Right-of-Use Asset	891,285	0	891,285	100	Details(II)1
Net Investment Property	6,447,876	5,537,730	910,146	16.4
Intangible Assets	142,341	233,688	(91,347)	(39.1)	Details(II)2
Deferred Income Tax Assets	152,339	97,958	54,381	55.5	Details(II)3
Other Non-current Assets	938,393	1,385,321	(446,928)	(32.3)	Details(II)4
Total Assets	71,444,257	68,931,908	2,512,349	3.6
Current Liabilities	38,242,738	39,182,202	(939,464)	(2.4)
Long-term Debts Payable	100,000	1,006,224	(906,224)	(90.1)	Details(II)5
Provisions - Non-current	583,333	297,554	285,779	96.0	Details(II)6
Deferred Income Tax Liabilities	365,703	0	365,703	100.0	Details(II)7
Other Non-current Liabilities	258,456	264,404	(5,948)	(2.2)
Total Liabilities	39,550,230	40,750,384	(1,200,154)	(2.9)
Capital Stock	7,344,975	7,303,799	41,176	0.6
Additional Paid-in Capital	6,114,005	5,633,933	480,072	8.5
Retained Earnings	17,452,333	14,934,034	2,518,299	16.9
Other Equity	(3,331,661)	(3,065,027)	(266,634)	8.7
Treasure Shares	(311,277)	(728,584)	417,307	(57.3)	Details(II)8
Uncontrolled Equity	4,625,652	4,103,369	522,283	12.7
Shareholder Equity	31,894,027	28,181,524	3,712,503	13.2

(II) Change Description of Material Items (increase/decrease in ratio reaches 20% or exceeds NT$10,000 thousand):
The main reason is that IFRS16 “Leasing” officially came into effect on January 1, 2019, and the related items are independently expressed from other non-current assets.
The main reason is the impairment loss of goodwill recognized in this year.
The main reason is an increase in deferred income tax assets due to unrealized expenses payable and inventory falling price loss.
The main reason is that IFRS16 “Leasing” officially came into effect on January 1, 2019, and longterm prepaid rent was independently expressed in right-of-use assets from other non-current assets.
Due to no new long-term loan this year.
Due to increase of deferred income tax liabilities result from adjusted invested real estate.
The main reason is that IFRS16 “Leasing” officially came into effect on January 1, 2019, leading to new financial report items
The main reason is the transfer of treasury stock to employees of the company this year

The differences mentioned above have no significant impacts on the Company's financial position.

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2. Financial Performance:

(I) Comparative Analysis of Consolidated Financial Performance in the Recent Two Years

Unit: NT$ thousands

Year Item	2019	2019	2018	2018	Amount Changed	Change Percentage (%)	Analytical Description of the Increase and Decrease Ratio (Note)
Operating Revenue Operating Costs Gross Profit Selling Expenses Administrative Expenses Research and Development Expenses Expected Credit Impairment Loss Total Administrative Expenses Operating Income Other Revenue Other Gains and Losses Financial Costs Investment Income Recognized Under Equity Method Total Non-operating Revenue and Expenses Earnings Before Taxation Income Tax Expenses Net Income in Current Period	92,552,325 (76,270,837) (3,708,989) (2,970,822) (3,369,287) 37,075 706,268 1,321,223 (123,131) 14,911 (1,385,984)	16,281,488 (10,012,023) 6,269,465 1,919,271 8,188,736 6,802,752	87,260,406 (74,643,642) (3,140,664) (2,162,176) (2,515,632) (148,756) 799,617 (255,145) (143,035) (15,501) (1,056,563)	12,616,764 (7,967,228) 4,649,536 385,936 5,035,472 3,978,909	5,291,919 1,627,195 3,664,724 568,325 808,646 853,655 (185,831) 2,044,795 1,619,929 (93,349) 1,576,368 (19,904) 30,412 1,533,335 3,153,264 329,421 2,823,843	6.1 2.2 29.0 18.1 37.4 33.9 (124.9) 25.7 34.8 (11.7) (617.8) (13.9) (196.2) 397.3 62.6 31.2 71.0	Details (II)1. Details (II)2. Details (II)3. Details (II)4. Details (II)5. Details (II)6. Details (II)7. Details (II)8. Details (II)9. Details (II)10 Details (II)11. Details (II)12.

(II) Change Description of Material Items (increase/decrease in ratio reaches 20% or exceeds NT $ 10,000 thousand):
1.The main reason is an increase in shipment quantity and an expansion of business scale this year.
2.The main reason is an increase in the salary expenses of employees this year.
3.The main reason is an increase in R&D salary expenses this year.
4.The main reason is an impairment loss of accounts receivable recognized in the previous year.
5.The main reason is an increase in management expenses and R&D expenses this year.
6.The main reason is an increase in operating income this year.
7.The main reason is an increase in investment evaluation benefits and disposal of non-current assets to be sold this year.
8.The main reason is the addition of the investment by equity method - Shuncheng since the second quarter of this year.
9.The main reason is an increase in other interests and losses this year compared with the previous year.
10.The main reason is an increase in operating income and other benefits and losses compared with the previous year.
11.The main reason is an increase in profit this year.
12.The main reason is an increase in operating income and other benefits and losses compared with the previous year.

The differences mentioned above have no significant impacts on the Company's financial position

(III) Expected Sales Quantity and its Basis:
1.The Company estimated that the sales volume of computer peripherals, digital video images, consumer electronics products, and other electronic products of the Company will be approximately 195.6 million units in the coming year and the subsidiaries Chicony Power and Xavi Technologies estimated that the sales volume of computer peripherals,

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game console products, and Netcom and other electronics will be approximately 172.2 million units and 4.5 million units.

  - 2.In order to estimate the annual sales volume, in addition to the Company referring the market analysis of primary research institutions, it is based on the expected demand and considers the capacity planning and past operating performance.

(I)Possible Impacts and Response Plans of the Company on Future Finances and Business: None.
Cash flows
(I) Recent Annual Cash Flow Analysis:

Unit: NT$ thousands

						Unit: NT$ thousands	Unit: NT$ thousands
Cash Balance at	Net Cash Flow	Net Cash Flow of		Cash		Remedies for Cash
Beginning of the	From Operating	Investment and	Remaining			Shortages
Period	Activities for	Financing Activities		Amount	Investment		Financial
①	the Whole Year	for the Whole Year	4.	+		Plan	Plan
	②	(including the impact		②+③
		of the exchange rate)
		③
1,952,439	11,058,807	(8,874,724)		4,136,522		`－`	`－`

Analysis of Cash Flow in the Current Year:
(1) Operating Activities: Because of the before income tax for the year plus the depreciation number that has not yet generated cash outflows.
(2)Investment and financing activities: Mainly due to a decrease in bank loans and distribution of cash dividends.
(3) Remedies for Cash Shortages: No cash shortage condition.

(II) Analysis of Cash Flows in the Year Ahead:

Unit: NT$ thousands

				Unit: NT$ thousands	Unit: NT$ thousands
Cash Balance at	Estimated Net	Estimated Net Cash	Estimated	Remedies for Cash
Beginning of the	Cash Flow	Flow of Investment	Cash	Shortages
Period	From Operating	and Financing	Remaining	Investment	Financial
①	Activities for	Activities for the	Amount	Plan	Plan
	the Whole Year	Whole Year	①+②+
	②	(including the impact of the exchange rate)	③
		③
4,136,522	10,000,000	(9,336,522)	4,800,000	`－`	`－`

Analysis of Cash Flow in the Current Year:
(1) Operating Activities: In order to increase profitability and generate net cash inflows, we have invested much effort in high value-added products and new products.
(2) Investment and financing activities: It was expected to build a new plant and distribute cash dividends, resulting in a net cash outflow.
(3) Expected Remedies for Cash Shortages: None.
Major Capital Expenditure and their effect on the financial position and Operation of the Company
- Effect of Significant Capital Expenditure on the Financial and Operation Performance of the Company: None.

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Direct Investment Policy and the main cause of profit or loss, remedial plan, and investment plan for the year ahead.

(1) Direct Investment Policy

The direct investment policy of the Company has the following three items:
In order to reduce production costs and provide the service closely for customers and enjoy tax incentives of consideration, we will invest in subsidiaries around the world and set up production locations and sales services.
In order to ensure the primary supply of the sources, the Company directly invests in the primary material supplier under the principle of minimum capital.
In order to increase the Company's overall competitiveness and create maximum interest, the Company strategically invests in related products that can create a synergistic effect under controllable risks.
(2) Direct Investment Policy in the Most Recent Year, the Primary Cause of Profit or Loss, and Remedy, and the Investment Plan in the Year Ahead

Unit: NT$ thousands

Name of Direct Investment Company	Investment Amount (Note 1)	Investment Target	2019 Investment (Loss) Gain	Primary Reason for Gain or Loss	Improvement Plan	Future Investment Plan
Chicony Overseas Inc.	265,326	Holding Company	2,616,094	Direct Investment Company Profit, Gain on Disposal of Short-term Investment and Investment Properties	Nil.	Nil
Chicony Global Inc.	33,027	Increase Sales Locations	(291,753)	Market exchange rate fluctuates greatly and exchange loss increases	Increase the sales proportion of niche products and effectively control costs and expenses	Ni l
Chicony Power Technologies Co. Ltd.	1,486,300	increase Items and Increase Overall Profit	833,695	Increase the proportion of niche products and new products, expand the scale of business, and improve R&D design ability and production efficiency.	Nil.	Nil
Hipro Overseas (BVI) Inc.	412,003	Holding Company and Increase Product Items, Increase Overall Profit	38,031	interest Revenue	Nil.	Nil
Hipro Electronics CO.,LTD.	2,330	Holding Company	17,340	Disposal of Short-term Investment and Foreign Exchange Gain	Nil.	Nil
Unikey Electronics Co.,Ltd.	150,000	Holding Company	498,738	Gain on Disposal of Short-term Investment	Nil.	Nil
Chicony Elec. (Thailand) Co., Ltd.	441,408	Increase production base	(38,838)	The lease of plant and the entrusted construction of a new plant with the Company’s own land are carried out at the same time, and the initial investment cost is large.	Accelerate the construction of the new plant, which is expected to be completed and put into operation in the third quarter of 2020.	Construction of a new plant with the Company’s own land

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Name of Direct Investment Company	Investment Amount (Note 1)	Investment Target	2019 Investment (Loss) Gain	Primary Reason for Gain or Loss	Improvement Plan	Future Investment Plan
XAVi Technologies Corporation	251,153	Increase Items and Increase Overall Profit	80,479	Increase the sales proportion of niche products, and effectively control costs and expenses.	Nil	Nil

Note: 1. The above investment amount is a total of direct and indirect investment companies. When the investment amount is US dollars, it is converted based on the original investment cost exchange rate.
The above table only shows direct investment companies, the investment indirectly in the direct investment company with the gain or loss condition. Please refer to the attached “Table 8” of the Financial Report of the Company audited by the accountant. Please refer to the “Affiliates Consolidated Financial Statement Announcements” for the items listed in this Annual Report for the relevant information of the investment items, the amount of capital, and the proportion of the investment of the Company.

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Analysis and Assessment of Risk Issues
(1) The effect of fluctuation of interest rate, exchange rate, and inflation on the income position of the Company, and remedy
1. Interest Rate Change

At the end of 2019, the amount of consolidated bank loans of the Company decreased by approximately NT$ 5.65 billion compared with the end of 2018. The net consolidated interest expense in 2019 decreased by approximately NT$42,675 thousand compared with 2018, and the average bank loan interest rate of 2019 was 1.20%, an increase of approximately 0.03% from 2018. The average interest rate of consolidated loans in the first quarter of 2020 increased by approximately 0.01% compared with the first quarter of 2019. The annual interest rate of loans increased or decreased by 0.25%, based on the balance of consolidated bank loans of NT$676,000 thousand, as of March 31, 2020. The total annual interest expense of the Company impact is NT$ 1,690 thousand.

The Company will continually track the market interest rate exchange rate trend information, and adjust the loan portfolio of each currency, to obtain the best loan interest rate conditions from the bank, and control the overall accounts receivable, inventory, accounts payable, and fixed asset turnover rate of the Company, in order to increase the cash flow of the Company, and minimize the impact of interest rate increases on the Company.

Fluctuation in Foreign Currency Exchange Rate

To ensure that the gross margin is not subject to excessive exchange rate fluctuations, the products of the Company and its subsidiaries adapt mainly to the US dollar for export sales. The purchases are mainly based on the recent changes in the international currency situation and adapt mainly to the US dollar. The Company and its subsidiaries will focus on the international economic condition, reference for bank analysis reports, and use the hedging method to reduce the impact of exchange rate fluctuations, such as borrowing US dollars, operation forward foreign exchange, options, exchange trading, or directly selling US dollar. The consolidated exchange losses were NT$251,565 thousand in 2019, and the consolidated exchange losses for the first quarter of 2020 were approximately NT$157,072 thousand.

3. Inflation

Most of the products of the Company and its subsidiaries are exported, so the impact of domestic inflation on the gain or loss of the Company is low. However, if inflation occurs in the global market, it will affect the purchasing ability and willingness of consumers and decrease the demand for consumer products. The gain or loss of the Company will have a negative impact, but the impact of international inflation is comprehensive, and it is not only individual companies but also governments that will respond to this issue; However, the Company will pay attention to the research and development and sales of niche products, reduce the production cost, and maintain the revenue of the Company by the price of products that can stimulate consumers' demand, and reduce the negative impact of inflation on the gain and loss of the Company.

(2) The policy of engagement in high risk and high leverage investment, loaning to a third party, undertaking of endorsements/guarantees in favor of a third party, and derivative trade, and the main cause of profit or loss and remedy in the future
In the case of short-term investments, the Company and its subsidiaries have carefully evaluated and performed related rules, based on the “Acquisition or Disposal of Assets Processing Procedures” and related authority rules, and the

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investment details and their gain and loss status are reviewed at least once a month. The Company will stop related matters If there is an abnormal situation. In 2019 and the first quarter of 2020, the Company's consolidated gain (loss) on disposal of investments were NT$ 76,945 thousand and NT$(7,529) thousand.

The Company and its subsidiaries have engaged in fund lending with others and endorsement guarantors. All of them have set the “Funding Loan Operation Procedures” and “Endorsement Guarantee Measures” and proceeded according to them. When the subsidiary company needs funds required for operational needs, it is not easy to obtain the loan amount from the bank itself, and then the Company or the subsidiary company shall pay the loan or endorsement guarantee. As of March 31, 2020, the Company and its subsidiaries do not have any losses in fund loans to other people and endorsement guarantees.
The policies of the Company and its subsidiaries engaged in the trading of derivative goods are limited to hedging transactions. In the future, the Company and its subsidiaries will take into account the bank analysis report, appropriately perform the forward foreign exchange rate, options, and futures to avoid hedging, and reduce the impact of the exchange rate and raw material fluctuations by depending on foreign exchange site inventory, flow, and purchase of raw materials demand.
(3) R&D plan in the future, and projected commitment of R&D expenses

In order to respond to the market demand, in addition to the continuous investment of current business, such as keyboards, digital images, camera modules for smartphones, power supplies, and ultra-high-speed fiber-optic terminal Netcom devices, the Internet of Things is the future development trend of the technology industry and the Company is focused on these products, such as Net-based drones, electric vehicles, smart homes with smart networking capabilities, and smart buildings, etc. are all emerging products; it is estimated that the whole investment in research and development costs will account for about 2% to 3% of consolidated operating revenue.

(4) The effect of changes in important policies and the regulatory environment at home and overseas on the financial and operation performance of the Company and the remedy

In the most recent year and up to the printing date of the annual report, significant domestic and foreign policy and legal changes have no significant impact on the Company's financial business.

(5) The effect of changes in the technological and industrial environment on the financial and operation performance of the Company and the remedy

In 2018 and as of March 31, 2019, the finances and business of the Company will not be significantly affected by technological changes; because the overall industry has quickly changed the market, a lack of labor in China, rising labor costs, the PC market being close to saturation, high growth is difficult, and other unfavorable factors, there are low industrial profits and adjustment of the price is difficult. This affects the profit of the Company. In order to minimize these negative effects to maintain profitability, in addition to continually focusing on research and development and sales of niche products, reducing production costs, rationalizing procedures, automating production, and vertically integrating for primary suppliers, the Company is actively expanding non-PC industries such as servers, game consoles, smart speakers, smart homes, and the Internet of Things emerging product businesses.

(6) The effect of changes in corporate image on crisis management of the enterprise and remedy

In the Most Recent Year and up to the Date of Printing of this Annual Report, the

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Company did not have a corporate image change or a corporate crisis.

(7) Expected results and possible risks from mergers and acquisitions, and the remedy

In the Most Recent Year and up to the Date of Printing of this Annual Report, the Company did not have any plan for mergers and acquisitions. It is not applicable.

(8) Expected results and possible risks from capacity expansion, and the remedy

In response to the impact of the Sino-US trade war on the transfer of production bases of the technology industry supply chain, Chicony’s Thailand subsidiary has entrusted the building of a new plant with its own land at the original plant site at Chachoengsao Province, Thailand, which is expected to be put into production in the fourth quarter of this year. The production of the new plant covers three product lines: keyboard, imaging and power supply, in order to diversify the risks of production base in response to the variables of the Sino-US trade war.

(9) Risks deriving from concentration of purchase or sale, and the remedy

The Company produces and sells diversified products. In the Most Recent Year and up to the Date of Printing of this Annual Report, there is no case where a certain product sold to a certain customer accounted for more than 10% of the global consolidated operating revenue; The Company has more than two suppliers of each raw material required for various product, and no single supplier accounts for more than 10% of the total consolidated purchases in the world.

(10) Effect and risks of sizable transfers or swaps of equity shares by Directors, Supervisors, and dominant shareholders holding more than 10% of the stake of the Company, and the remedy

In the most recent year and up to the date of printing of the annual report, Mr. Kun-Tai Hsu, a 10% majority shareholder of the Company, transferred 20,000 shares for personal investment in the development of the Twin Star Building. The transferred shares were taken over by a foreign institutional investor which supported the Company.

(11) Effect and risks from the changing of hands in management and the remedy

In the Most Recent Year and up to the Date of Printing of this Annual Report, the Company's condition does not have any change in management.

(12) Litigation or Non-litigation Incidents and Responding Measures:
Material Litigation, Non-litigation, or Administrative Dispute Incidents the Company is Currently Performing: None.
Directors, Supervisors, General Manager, the De Facto Owner, and Shareholders Holding More than 10% of the Stakes, or Major Legal Proceeds, Noncontentious Matters, or Administrative Actions Still in Proceeding in 2018 and as of March 31, 2019, the Result of Which May Significantly Affect Shareholders Equity or the Stock Price of the Company: None.
(13) Other Major Risks and their Remedy:
Description of Information Security Risk Assessment Analysis and Responding Measures:

Description of Information Security Risk Assessment Analysis and Responding Measures:

In the Internet age, third-party illegal intrusion attacks have become more and more difficult, and security protection has become increasingly difficult. Therefore, in addition to establishing a complete network and computer security protection system, such as firewalls and anti-virus software, the Company has regular updates. It depends on the process of information security education, training, and promotion. If it is necessary to conduct information business

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outsourcing operations, it is necessary to study and propose information security requirements in advance and require manufacturers to obey the information security responsibilities and confidentiality.

Regarding the information security risk management structure, information security policy, and detailed management projects of the Company, please refer to the website of the Company.

Other Important Risks and Responding Measures: None.
Other Materiality: None

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----- Start of picture text -----

40% Holding Limited
Swift Success
100% Chicony Electronics (ChongQing) Co., Ltd.
100% Mao-Feng International Inc. 100% Chicony Electronics (Suzhou) Co., Ltd.
100% Chicony Electronics (DongGuan) Co., Ltd.
100% Kuang Mao International Inc. 29% Tian Jia Investments Co., Ltd. 100% Far Win (Kunshan) Co., Ltd. 100% Far Win (ChongQing) Co., Ltd.
86.05% Real Young Elec. Co., Ltd. 100% Mao Ray Electronics (DongGuan) Co., Ltd.
100% Chicony
Overseas Inc.
60% Global Faith Inc. 100 % Suzhou Mao Qun Electronics Co., Ltd. 100% Suzhou Qun Yang Electronics Ltd.
100% Chicony
Elec.CEZ s.r.o.
100% Chicony America Group Inc.
70.73% Chicony Electronics (Thailand) Co., Ltd. 100% Chicony America Inc.
100% Chicony Global Inc. 100% Chicony Electronics Japan Co., Ltd.
100% Hipro Overseas (BVI) Inc. 29.27% Chicony Electronics (Thailand) Co., Ltd.
100% Ltd.
Systemax
Development
Chicony Electronics Co., Ltd. 45.94% XAVI Technologies Corp. 100% Directmax International Ltd.
100% Ltd. 100% XAVI Ltd.
XAVi Overseas Technologies (Suzhou) Co.,
100% Chiocny Power Ltd.
(Taizhou) Co.,
100% Unikey Electronics Co., Ltd. 13.95% Real Young Electronics Co., Ltd. 100% Mao Ray Electronics (DongGuan) Co., Ltd.
100% Chicony Co., Ltd.
Power Trading (Dong Guan)
100% Quansun Investment Corp., Ltd
100% Chicony Power Technology (Chong- Qing)Co., Ltd.
100% Hipro Electronics Co., Ltd. 0.31% Chicony Power Technology Co., Ltd. 100% Chicony Power Technology Hong Kong Limited
100% Chiocny Power Technology (DongGuan) Co., Ltd.
100% Qun Jing Power Co., Ltd.
100% Chicony Power Technology (Suzhou) Co., Ltd. 100% Chocony Energy Saving Technology (Shanghai) Co., Ltd.
100% Chicony Power Holdings Inc. 100% Chicony Power International Inc.
49.28% Chicony Power Technology Co., Ltd. 100% Quang Sheng Electronics (Nanchang) Co., Ltd.
100% Chicony Power Technology (Thailand) Co.,Ltd. 100% Chicony Power USA, Inc.
100% CarLight Technology Co., Ltd.
78.125% WitsLight Technology Co., Ltd
100% WitsLight Technology (Kunshan) Co., Ltd. 100% ZhuZhou Torch Auto Lamp Co., Ltd
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(2)Basic Information on the Affiliates	Main business line	1.Sale of computer peripheral components. 2.Engaged in the acquisition and consolidation, investment, and management of overseas companies. Production and sale of computer peripheral components. 1. Sale of power supply devices and related electronic products. 2. Engaged in the acquisition and consolidation, investment, and management of overseas companies. Import and export of power supply devices and related electronic products. R&D, manufacturing, and sale of network connectivity products. Production and sale of computer peripheral components. Sale of computer peripheral components. Production and sale of computer peripheral components. Sale of computer peripheral components. Production and sale of computer peripheral components.
	Paid-in Capital	US$ 10,000,000 NT$900,000,000 US$ 12,560,000 NT$ 46,600,000 NT$993,523,140 Bath 611,252,500 US$1,000,000 NT$ 3,867,153,750 US$3,250,000 US$ 9,760,000
	Address	P.O. Box 3152, Road Town,Tortola, British Virgin Islands 22F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, BVI 30F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City 22F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City 82 Mu 4, Takhan Bangpakong, Chachoengsao 24130, Thailand Level 15(A1) Main Office Tower, Financial ParkLabuan, 87000 Labuan Ft, Malaysia 30F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City 53 Parker Irvine,CA 92618, U.S.A. Chicony Electronics Manufacturing Plant, SanZhong District, QingXi, DongGuan City, GuangZhou, Mainland China
	Date of Incorporation	1989.4.14 1994.3.16 1998.9.17 1990.10.5 1997.10.17 1989.12.28 2006.9.11 2008.12.05 1989.12.19 1998.7.1
	Name of corporation	Chicony Overseas Inc. Unikey Electronics Co., Ltd. Hipro Overseas (BVI) Inc. Hipro Electronics CO., LTD. XAVi Technologies Corporation Chicony Elec. (Thailand) Co., Ltd. Chicony Global Inc. Chicony Power Technology Co. Ltd. Chicony America Inc. Chicony Electronics (Dongguan) CO., Ltd.

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Main business line	1. Sale of computer peripheral components. 2. Engaged in the acquisition and consolidation, investment, and management of overseas companies. Production and sale of computer peripheral components. Sale of computer peripheral components. 1. Sale of computer peripheral components. 2. Engaged in the acquisition and consolidation, investment, and management of overseas companies. Production of electronic components, keyboards, and plastic products. Production of electronic components, keyboards, and plastic products. Sale of computer peripheral components. 1. Sale of computer peripheral components. 2. Engaged in the acquisition and consolidation, investment, and management of overseas companies. Ecommerce software services. Production and sale of computer peripheral components. 1.Design, manufacture, repair, and import/export of computer peripheral equipment and electronic products. 2. Engaged in the acquisition and consolidation, investment, and management of overseas companies.
Paid-in Capital	US$2,294,000 US$ 30,778,269 (RMB224,440,430) US$6,555 (CZK200,000) US$3,850,000 US$ 3,850,000 RMB 1,000,000 JPY10,000,000 US$ 2,284,142 US$ 6,200,000 US$15,000,000 US$ 9,139,780
Address	Vistra Corporate Service Centre, Wickhams Cay II, Road Town, Tortola, VG 1110, British Virgin Islands 2379, ZhongShanBei Road, SongLing, WuJiang City, JiangSu, Mainland China Tovarni 1553, 535 01Prelouc,Czech Republic Scotia Centre 4th Floor P.O. Box 2804, George Town, Grand Cayman, Cayman Islands No. 345, HuXinXi Road, WuJiang Economics & Technology Development District No. 345, HuXinXi Road, WuJiang Economics & Technology Development District 4B Iwasaki.,3-11-15 Mizonzkuchi,Takatsu-ku, Kawasaki-shi,Kanagawa-ken 2-3-0001 P.O. Box 217. Apia, Samoa 53 Parker 2nd Floor Irvine, CA 92618, U.S.A. No. 18, JiuJiang Avenue, XuangFu Road Office, JiangJing District, ChongQing P.O. Box 3152, Road Town, Tortola British Virgin Islands
Date of Incorporation	1999.4.16 2001.10.26 2002.11.25 2004.6.10 2004.4.4 2012.1.9 2008.11 2001.12.11 2000.9.1 2011.4.12 2000.5.25
Name of corporation	Mao-Feng International Inc. Chicony Electronics (SuChou) Co., Ltd. Chicony Electronics CEZ s.r.o. Global Faith Inc. (KwangShin) Suzhou Mao-Qun Electronics Co., Ltd. Suzhou Qun-Yang Electronics Co., Ltd. Chicony Electronics Japan Co., Ltd. Kuang Mao International Inc. Chicony America Inc. Chicony Electronic (Chongqing) Co., Ltd. Real Young Elec. Co., Ltd.

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Main business line	Production of electronics components, keyboard, and plastic products. General investment. Wholesale and retail sale of computers and consumer equipment. General investment. Sale and production of power supply devices and related electronic products. Sale of power supplies and related electronic products. R&D center and investment holdings. Sale of power supplies and related electronic products. Design, research, and manufacture of LED lighting modules. Manufacture and sale of LED lighting modules. Production and sale of automotive and motorcycle components, electric machines and device, decorative lighting, and plastic products. Design, research, and international trade of lamps and related components for automotive and electric vehicles. Production and sale of power supplies and related electronic products. Production and sale of electronic equipment (high performance power supply, power modules, and voltage transformer) and LED lighting equipment.
Paid-in Capital	US$ 8,445,283 NT$80,000,000 NT$ 1,000,000 US$10,000,000 THB$ 38,000,000 US$10,000,000 HK$46,800,000 (US$ 6,000,000) US$ 1,500,000 US$12,800,000 USD10,500,000 (RMB66,710,247) RMB46,000,000 NT$ 3,000,000 US$20,750,000 (RMB 157,684,105) US$42,100,000 (RMB 283,008,569)
Address	HuoLianShu Management District, NiuShan Foreign Business Industrial Park, DongGuan 30F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City 30F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City Portcullis Chambers, 4th Floor, Ellen Skelton Building 3076 Sir Francis Drake Highway, Road Town, Tortola, British Virgin Islands VG1110 82 Mu 4, Ta Kham Sub-District, Bangpakong District, Chachoengsao Province 24130, Thailand Marquee Place, Suite 300, 430 West Bay Road, P.O. Box 32052 Grand Cayman KY1-1208 Cayman Islands 3RD Floor, Building 9,NO.5 Science Park West Avenue, Shatin, New Territories.Hong Kong 723 S.Casino Center Blvd. 2nd Floor Las Vegas U.S.A. LEVEL2, LOTEMAU CETRE, VAEA STREET, APIA, SAMOA Rm 4, No. 99, MuYe Road, YuShan, KunShan City, JiangSu 268 HuangHeNan Road, TianYuan District, ZhuZhou, Hunan 24F, No. 69, Sec.2, Guangfu Rd., Sanchong Dist.,New Taipei City LiaoBu XinChen Technology Industrial Park, DongGuan, GuangDong No. 2379, ZhongShanBei Road, SongLing, WuJiang, JiangSu
Date of Incorporation	2000.10.23 2003.4.24 2008.8.26 2009.7 2019.10.1 2009.7 2002.4.24 2003.11.21 2009.12.11 2010.7.6 2002.3.22 2016.6.24 1998.12.7 2002.12.11
Name of corporation	Mao Ray Electronics (DongGuan) Co., Ltd. Quansun Investment Corp., Ltd. Chun Ching Power Technology Co., Ltd. Chicony Power Holdings Inc. Chicony Power Technology (Thailand) Co., Ltd. Chicony Power International, Inc. Chicony Power Technology Hong Kong Limited (CPHK) Chicony Power USA, Inc. WitsLight Technology Co., Ltd. WitsLight Technology (KunShan) Co., Ltd. Zhuzhou Torch Auto Lamp Co., Ltd. CarLight Technology Co., Ltd. Chicony Power Technology (Dongguan) Co. Ltd. Chicony Power Technology (SuChou) Co. Ltd.

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Name of corporation Date of Incorporation Address Paid-in Capital Main business line Quang Sheng Electronics (Nanchang) Co., Ltd. 2006.7.1 NanChang GaoXin District, HuoJuEr Road North US$ 4,000,000 (RMB31,170,839) Production and sale of electronic equipment (magnetic elements, circuit boards, keyboards) and voltage transformers. Chicony Power Technology (Chongqing) Co. Ltd. 2011.4.25 18 JiuJiang Avenue, ShuangFu Office, JiangJing, ChongQing US$10,000,000 Production and sale of electronic equipment (high performance power supply, power modules, and voltage transformers) and LED lighting equipment. Chicony Energy Saving Technology (Shanghai) Co., Ltd. 2011.5.25 Office Suite 1702, No. 1600, ZhongShanXi Road, XuHui District, Shanghai RMB10,000,000 Inquiry services, development, and transfer of energy-saving technology. Sale and installation of energy saving lighting equipment. DongGuan Chicony Power Energy Trading Co., Ltd. 2013.1.11 LiaoBu XinChen Technology Industrial Park, DongGuan, GuangDong US$ 350,000 Wholesale and import/export of power supply devices and other parts, LED lighting equipment, digital products, office supplies, computers, and other electronic parts. Chicony Power Technology (Taizhou) Co., Ltd. 2019.6.11 Zhenqian Road, Shan Houpan Village, Hengjie Town, Luqiao District, Taizhou City, Zhejiang Province US$ 3,000,000 Electric machinery, frequency converter and R&D, production, sales, installation, after-sales and technology consulting service for industrial automatic equipment; electrical machinery and accessories and the production and sales of machinery accessories; import/export business of goods or technology. Directmax International Ltd. 2002.7.2 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,750,000 Investment holdings and transfer. XAVi Overseas Ltd. 2002.1.18 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,500,000 Investment holdings and transfer. Systemax Development, Ltd. 2002.7.12 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 250,000 Sale of DSL bridges and routers. XAVi Technologies (Suzhou) Co., Ltd. 2002.12.25 No. 108, HuaHong Road, WuJiang Economics and Technology Development District, JiangSu, Mainland China US$10,000,000 (RMB68,820,935) Production and sale of DSL bridges and routers. (3) Presumed to have similar shareholder’s data as in an affiliation or with controlling interest: Not Applicable (4) In regards to the overall scope of business of affiliates, the scope of business of the Company and its subsidiaries includes: Manufacturing, trading, and management services.	Name of corporation Date of Incorporation Address Paid-in Capital Main business line Quang Sheng Electronics (Nanchang) Co., Ltd. 2006.7.1 NanChang GaoXin District, HuoJuEr Road North US$ 4,000,000 (RMB31,170,839) Production and sale of electronic equipment (magnetic elements, circuit boards, keyboards) and voltage transformers. Chicony Power Technology (Chongqing) Co. Ltd. 2011.4.25 18 JiuJiang Avenue, ShuangFu Office, JiangJing, ChongQing US$10,000,000 Production and sale of electronic equipment (high performance power supply, power modules, and voltage transformers) and LED lighting equipment. Chicony Energy Saving Technology (Shanghai) Co., Ltd. 2011.5.25 Office Suite 1702, No. 1600, ZhongShanXi Road, XuHui District, Shanghai RMB10,000,000 Inquiry services, development, and transfer of energy-saving technology. Sale and installation of energy saving lighting equipment. DongGuan Chicony Power Energy Trading Co., Ltd. 2013.1.11 LiaoBu XinChen Technology Industrial Park, DongGuan, GuangDong US$ 350,000 Wholesale and import/export of power supply devices and other parts, LED lighting equipment, digital products, office supplies, computers, and other electronic parts. Chicony Power Technology (Taizhou) Co., Ltd. 2019.6.11 Zhenqian Road, Shan Houpan Village, Hengjie Town, Luqiao District, Taizhou City, Zhejiang Province US$ 3,000,000 Electric machinery, frequency converter and R&D, production, sales, installation, after-sales and technology consulting service for industrial automatic equipment; electrical machinery and accessories and the production and sales of machinery accessories; import/export business of goods or technology. Directmax International Ltd. 2002.7.2 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,750,000 Investment holdings and transfer. XAVi Overseas Ltd. 2002.1.18 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,500,000 Investment holdings and transfer. Systemax Development, Ltd. 2002.7.12 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 250,000 Sale of DSL bridges and routers. XAVi Technologies (Suzhou) Co., Ltd. 2002.12.25 No. 108, HuaHong Road, WuJiang Economics and Technology Development District, JiangSu, Mainland China US$10,000,000 (RMB68,820,935) Production and sale of DSL bridges and routers. (3) Presumed to have similar shareholder’s data as in an affiliation or with controlling interest: Not Applicable (4) In regards to the overall scope of business of affiliates, the scope of business of the Company and its subsidiaries includes: Manufacturing, trading, and management services.	Name of corporation Date of Incorporation Address Paid-in Capital Main business line Quang Sheng Electronics (Nanchang) Co., Ltd. 2006.7.1 NanChang GaoXin District, HuoJuEr Road North US$ 4,000,000 (RMB31,170,839) Production and sale of electronic equipment (magnetic elements, circuit boards, keyboards) and voltage transformers. Chicony Power Technology (Chongqing) Co. Ltd. 2011.4.25 18 JiuJiang Avenue, ShuangFu Office, JiangJing, ChongQing US$10,000,000 Production and sale of electronic equipment (high performance power supply, power modules, and voltage transformers) and LED lighting equipment. Chicony Energy Saving Technology (Shanghai) Co., Ltd. 2011.5.25 Office Suite 1702, No. 1600, ZhongShanXi Road, XuHui District, Shanghai RMB10,000,000 Inquiry services, development, and transfer of energy-saving technology. Sale and installation of energy saving lighting equipment. DongGuan Chicony Power Energy Trading Co., Ltd. 2013.1.11 LiaoBu XinChen Technology Industrial Park, DongGuan, GuangDong US$ 350,000 Wholesale and import/export of power supply devices and other parts, LED lighting equipment, digital products, office supplies, computers, and other electronic parts. Chicony Power Technology (Taizhou) Co., Ltd. 2019.6.11 Zhenqian Road, Shan Houpan Village, Hengjie Town, Luqiao District, Taizhou City, Zhejiang Province US$ 3,000,000 Electric machinery, frequency converter and R&D, production, sales, installation, after-sales and technology consulting service for industrial automatic equipment; electrical machinery and accessories and the production and sales of machinery accessories; import/export business of goods or technology. Directmax International Ltd. 2002.7.2 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,750,000 Investment holdings and transfer. XAVi Overseas Ltd. 2002.1.18 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,500,000 Investment holdings and transfer. Systemax Development, Ltd. 2002.7.12 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 250,000 Sale of DSL bridges and routers. XAVi Technologies (Suzhou) Co., Ltd. 2002.12.25 No. 108, HuaHong Road, WuJiang Economics and Technology Development District, JiangSu, Mainland China US$10,000,000 (RMB68,820,935) Production and sale of DSL bridges and routers. (3) Presumed to have similar shareholder’s data as in an affiliation or with controlling interest: Not Applicable (4) In regards to the overall scope of business of affiliates, the scope of business of the Company and its subsidiaries includes: Manufacturing, trading, and management services.	Name of corporation Date of Incorporation Address Paid-in Capital Main business line Quang Sheng Electronics (Nanchang) Co., Ltd. 2006.7.1 NanChang GaoXin District, HuoJuEr Road North US$ 4,000,000 (RMB31,170,839) Production and sale of electronic equipment (magnetic elements, circuit boards, keyboards) and voltage transformers. Chicony Power Technology (Chongqing) Co. Ltd. 2011.4.25 18 JiuJiang Avenue, ShuangFu Office, JiangJing, ChongQing US$10,000,000 Production and sale of electronic equipment (high performance power supply, power modules, and voltage transformers) and LED lighting equipment. Chicony Energy Saving Technology (Shanghai) Co., Ltd. 2011.5.25 Office Suite 1702, No. 1600, ZhongShanXi Road, XuHui District, Shanghai RMB10,000,000 Inquiry services, development, and transfer of energy-saving technology. Sale and installation of energy saving lighting equipment. DongGuan Chicony Power Energy Trading Co., Ltd. 2013.1.11 LiaoBu XinChen Technology Industrial Park, DongGuan, GuangDong US$ 350,000 Wholesale and import/export of power supply devices and other parts, LED lighting equipment, digital products, office supplies, computers, and other electronic parts. Chicony Power Technology (Taizhou) Co., Ltd. 2019.6.11 Zhenqian Road, Shan Houpan Village, Hengjie Town, Luqiao District, Taizhou City, Zhejiang Province US$ 3,000,000 Electric machinery, frequency converter and R&D, production, sales, installation, after-sales and technology consulting service for industrial automatic equipment; electrical machinery and accessories and the production and sales of machinery accessories; import/export business of goods or technology. Directmax International Ltd. 2002.7.2 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,750,000 Investment holdings and transfer. XAVi Overseas Ltd. 2002.1.18 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 7,500,000 Investment holdings and transfer. Systemax Development, Ltd. 2002.7.12 P.O.Box 3152, Road Town, Tortola, British Virgin Islands US$ 250,000 Sale of DSL bridges and routers. XAVi Technologies (Suzhou) Co., Ltd. 2002.12.25 No. 108, HuaHong Road, WuJiang Economics and Technology Development District, JiangSu, Mainland China US$10,000,000 (RMB68,820,935) Production and sale of DSL bridges and routers. (3) Presumed to have similar shareholder’s data as in an affiliation or with controlling interest: Not Applicable (4) In regards to the overall scope of business of affiliates, the scope of business of the Company and its subsidiaries includes: Manufacturing, trading, and management services.
Main business line	Production and sale of electronic equipment (magnetic elements, circuit boards, keyboards) and voltage transformers. Production and sale of electronic equipment (high performance power supply, power modules, and voltage transformers) and LED lighting equipment. Inquiry services, development, and transfer of energy-saving technology. Sale and installation of energy saving lighting equipment. Wholesale and import/export of power supply devices and other parts, LED lighting equipment, digital products, office supplies, computers, and other electronic parts.	Electric machinery, frequency converter and R&D, production, sales, installation, after-sales and technology consulting service for industrial automatic equipment; electrical machinery and accessories and the production and sales of machinery accessories; import/export business of goods or technology.	Investment holdings and transfer. Investment holdings and transfer. Sale of DSL bridges and routers. Production and sale of DSL bridges and routers.
Paid-in Capital	US$ 4,000,000 (RMB31,170,839) US$10,000,000 RMB10,000,000 US$ 350,000	US$ 3,000,000	US$ 7,750,000 US$ 7,500,000 US$ 250,000 US$10,000,000 (RMB68,820,935)
Address	NanChang GaoXin District, HuoJuEr Road North 18 JiuJiang Avenue, ShuangFu Office, JiangJing, ChongQing Office Suite 1702, No. 1600, ZhongShanXi Road, XuHui District, Shanghai LiaoBu XinChen Technology Industrial Park, DongGuan, GuangDong	Zhenqian Road, Shan Houpan Village, Hengjie Town, Luqiao District, Taizhou City, Zhejiang Province	P.O.Box 3152, Road Town, Tortola, British Virgin Islands P.O.Box 3152, Road Town, Tortola, British Virgin Islands P.O.Box 3152, Road Town, Tortola, British Virgin Islands No. 108, HuaHong Road, WuJiang Economics and Technology Development District, JiangSu, Mainland China
Date of Incorporation	2006.7.1 2011.4.25 2011.5.25 2013.1.11	2019.6.11	2002.7.2 2002.1.18 2002.7.12 2002.12.25
Name of corporation	Quang Sheng Electronics (Nanchang) Co., Ltd. Chicony Power Technology (Chongqing) Co. Ltd. Chicony Energy Saving Technology (Shanghai) Co., Ltd. DongGuan Chicony Power Energy Trading Co., Ltd.	Chicony Power Technology (Taizhou) Co., Ltd.	Directmax International Ltd. XAVi Overseas Ltd. Systemax Development, Ltd. XAVi Technologies (Suzhou) Co., Ltd.

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Number of Shares Held	Shares Held % /Issued Amount %	`－` `－`	`－` `－` `－` `－` 100%	`－` `－`	`－` `－` `－`	`－` `－` `－` `－` 100%	`－` 45.94% 5.17% 1.19% 0.13% 0.07% 0.60% 1.54% `－` 0.35% 0.13%
	Shares Held /Issued Amount	`－` `－`	`－` `－` `－` `－` 90,000,000	`－` `－`	5 1 `－` 1	`－` `－` `－` `－` 4,660,000	`－` 45,642,271 5,141,160 1,185,845 132,054 69,984 591,445 1,528,194 `－` 345,916 128,304
Name or Representative		Hsu, Kun-Tai Lu, Chin-Tsung	Lu, Chin-Tsung Hsu, Kun-Tai (Vacancy) (Vacancy)	Hsu, Kun-Tai Lu, Chin-Tsung	Hsu, Kun-Tai Lu, Chin-Tsung Lin, Yu-Ling Lu ShuJun	Hsu, Kun-Tai (Vacancy) Lu, Chin-Tsung Hsu YueYuan	Lu, Chin-Tsung Hsu, Kun-Tai Chen, Chiu-Lung Huang, Chien-Yu Chou, Yung-Chang Hsu, Chen-Yao Li, Hui-Chin Li, Cih-Jing Lin, Yu-Ling Tsai, Mei-I
Title		Director Director	Chairman (Legal Representative) Director of the Legal Representative Director of the Legal Representative Supervisor of the Legal Representative Legal Representative: Chicony Electronics Co., Ltd.	Director Director	Director Director Director Chairman & CEO (Chief Executive Officer)	Chairman (Legal Representative) Director of the Legal Representative Director of the Legal Representative Supervisor of the Legal Representative Legal Representative: Chicony Electronics Co., Ltd.	Chairman (Legal Representative) Legal Representative: Chicony Electronics Co., Ltd. Director Director Director Director Director Director Supervisor Supervisor Supervisor
Enterprise Name		Chicony Overseas Inc.	Unikey Electronics Co., Ltd.	Hipro Overseas (BVI) Inc.	Chicony Electronics (Thailand) Co., Ltd.	Hipro Electronics CO., LTD.	XAVI Technologies Corporation

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Number of Shares Held	Shares Held % /Issued Amount %	`－` 48.12% 0.83% 0.53% 0.80% `－` `－` `－`	`－`	`－` `－` `－`	`－` `－` `－`	`－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`
	Shares Held /Issued Amount	`－` 186,068,594 3,219,714 2,059,567 3,091,353 `－` `－` `－`	`－`	`－` `－` `－`	`－` `－` `－`	`－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`
Name or Representative		Lu, Chin-Tsung Tseng, Kuo-Hua Huang, Chung-Ming Li, Cih-Jing Tsai, Duh-Kung Fu, Yow-Shiuan Chiu, Te-Chen	Hsu, Kun-Tai	Hsu, Kun-Tai Lu, Chin-Tsung Yao Ching Chang	Hsu, Kun-Tai Lu, Chin-Tsung Huang, Chien-Yu	Hsu, Kun-Tai Lu, Chin-Tsung	Hsu, Kun-Tai Lu, Chin-Tsung Tsai, Chin Cheng Wang, Hui-Kai Huang, Chien-Yu	Hsu, Kun-Tai Lu, Chin-Tsung Cheng, YuHua Lin, Yu Ling
Title		Chairman (Legal Representative) Legal Representative: Chicony Electronics Co., Ltd. Director & CEO Director Director Independent Director Independent Director Independent Director	Director	Director Director & CEO (Chief Executive Officer) and Secretary Director and CFO	Chairman Director and General Manager Director	Director Director	Chairman Director Director Director and General Manager Supervisor	Director Director Director Director
Enterprise Name		Chicony Power Technology Co., Ltd.	Chicony Global Inc.	Chicony America Inc.	Chicony Electronics (Dongguan) CO., Ltd.	Mao-Feng International Inc.	Chicony Electronic (SuChou) Co., Ltd.	Chicony Electronics CEZ s.r.o

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Number of Shares Held	Shares Held % /Issued Amount %	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－`	`－` `－` `－`
	Shares Held /Issued Amount	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－`	`－` `－` `－`
Name or Representative		Lin, Mao-Kuei Lu, Chin-Tsung Wei, Chuan-Pin Hsu, FengLin Hsu, FengYang	Huang, Chien-Yu Wang, Hui-Kai Lu, Chin-Tsung Chen, LaiZhu Wei, Chuan-Pin	Huang, Chien-Yu Wang, Hui-Kai Chen, LaiZhu Tsai, Chin Cheng	Huang, WenBin Lu, Chin-Tsung Huang, Chien-Yu Lin, Yu Ling	Hsu, Kun-Tai Lu, Chin-Tsung	Hsu, Kun-Tai Lu, Chin-Tsung Chang, Yao Ching
Title		Director Director Director Director Director	Chairman Director & GM Director Director Supervisor	Chairman Director and General Manager Director Supervisor	Chairman Director Director Supervisor	Director Director	Director Director & CEO(Chief Executive Officer) Director and Secretary
Enterprise Name		Global Faith Inc. (Global Faith, Inc.) (Note 3)	Suzhou Mao-Qun Electronics Co., Ltd. (Note 3)	Suzhou Qun-Yang Electronics Co., Ltd.	Chicony Electronics Japan, Inc.	Kuang Mao International, Inc. (Kuang Mao International, Inc.)	Chicony America Inc.

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Number of Shares Held	Shares Held % /Issued Amount %	`－` `－` `－` `－`	`－` `－` `－`	`－` `－` `－`	`－` `－` `－` `－` 100%	`－` `－` `－` `－` 100%	`－` `－`	`－` `－`
	Shares Held /Issued Amount	`－` `－` `－` `－`	`－` `－` `－`	`－` `－` `－`	`－` `－` `－` `－` 8,000,000	`－` `－` `－` `－` 100,000	`－` `－`	`－` `－`
Name or Representative		Hsu, Kun-Tai Huang, Chien-Yu Tsai, Chin Cheng Lu, Chin-Tsung	Hsu, Kun-Tai Lu, Chin-Tsung Huang, Chien-Yu	Huang, Chien-Yu Hsu, Kun-Tai Lu, Chin-Tsung	Hsu, Kun-Tai (Vacancy) Lu, Chin-Tsung (Vacancy)	Hsu, Kun-Tai (Vacancy) Lu, Chin-Tsung (Vacancy)	Lu, Chin-Tsung Tseng, Kuo-Hua	Lu, Chin-Tsung Tseng, Kuo-Hua
Title		Chairman Director Director and General Manager Supervisor	Director Director Director	Chairman Director and General Manager Director and Supervisor	Chairman (Legal Representative) Director of the Legal Representative Director of the Legal Representative Supervisor of the Legal Representative Legal Representative: Hipro Electronics Co., Ltd.	Chairman (Legal Representative) Director of the Legal Representative Director of the Legal Representative Supervisor of the Legal Representative Legal Representative: Hipro Electronics Co., Ltd.	Director Director	Director Director
Enterprise Name		Chicony Electronic (Chongqing) Co., Ltd.	Real Young Electronics. Co., Ltd.	Mao Ray Electronics (DongGuan) Co., Ltd.	Quansun Investment Corp., Ltd.	Chun Ching Power Technology Co., Ltd.	Chicony Power Holdings Inc.	Chicony Power International, Inc.

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Number of Shares Held	Shares Held % /Issued Amount %	`－` `－` `－` `－`	`－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`
	Shares Held /Issued Amount	`－` `－` `－` `－`	`－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－`
Name or Representative		Lu, Chin-Tsung Tseng, Kuo-Hua Huang, Chung-Ming Li, Tsu-Yu	Lu, Chin-Tsung Tseng, Kuo-Hua Chang, Yao Ching	Tseng, Kuo-Hua Lu, Chin-Tsung Huang, Chung-Ming Huang, Chien-Yu Wang, Hui-Kai	Tseng, Kuo-Hua Lu, Chin-Tsung Huang, Chung-Ming Huang, Chien-Yu	Tseng, Kuo-Hua Lu, Chin-Tsung Huang, Chung-Ming Li, Tsu-Yu Huang, Chien-Yu	Tseng, Kuo-Hua Lu, Chin-Tsung Huang, Chien-Yu Huang, Chung-Ming
Title		Director Director Director Director	Director Director Director	Chairman and General Manager Director Director Director Supervisor	Chairman Director Director Supervisor	Chairman Director Director Director and General Manager Supervisor	Chairman and General Manager Director Director Supervisor
Enterprise Name		Chicony Power Technology Hong Kong Limited	Chicony Power USA, Inc.	Chicony Power Technology (SuChou) Co. Ltd.	Chicony Power Technology (Dongguan) Co. Ltd.	Quang Sheng Electronics (Nanchang) Co., Ltd.	Chicony Power Technology (Chongqing) Co. Ltd.

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Number of Shares Held	Shares Held % /Issued Amount %	`－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－`	`－` `－` `－` `－`	`－` `－` `－`	`－` `－` `－`	`－` `－` `－`	`－` `－` `－`
	Shares Held /Issued Amount	`－` `－` `－` `－`	`－` `－` `－` `－`	`－` `－`	`－` `－` `－` `－`	1 1 1	`－` `－` `－`	`－` `－` `－`	`－` `－` `－`
Name or Representative		Tseng, Kuo-Hua Lu, Chin-Tsung Huang, Chung-Ming Huang, Ming-Hui	Tseng, Kuo-Hua Lu, Chin-Tsung Huang, Chien-Yu Huang, Chung-Ming	Hsu, Kun-Tai Lu, Chin-Tsung	Tseng, Kuo-Hua Huang, Chung-Ming Chen, Hsueh-Yi Huang, Chien-Yu	Lu, Chin-Tsung Tseng, Kuo-Hua Huang, Chien-Yu	Hsu, Kun-Tai Li, Hui-Chin Lu, Chin-Tsung	Hsu, Kun-Tai Li, Hui-Chin Lu, Chin-Tsung	Hsu, Kun-Tai Li, Hui-Chin Lu, Chin-Tsung
Title		Chairman Director Director and General Manager Supervisor	Chairman Director Director and General Manager Supervisor	Director Director	Chairman Director and General Manager Director Supervisor	Director Director Director	Director Director Director	Director Director Director	Director Director Director
Enterprise Name		Chicony Energy Saving Technology (Shanghai) Co., Ltd.	DongGuan Chicony Power Energy Trading Co., Ltd.	Chicony Overseas Hong Kong Limited	Chicony Power Technology (Taizhou) Co., Ltd.	Chicony Power Technology (Thailand) Co., Ltd.	Directmax International Ltd.	XAVi Overseas Ltd.	Systemax Development, Ltd.

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Number of Shares Held	Shares Held % /Issued Amount %	`－` `－` `－` `－` `－`	`－` 16.32% `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－` 100%
	Shares Held /Issued Amount	`－` `－` `－` `－` `－`	`－` 2,089,500 `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－`	`－` `－` `－` `－` `－` 300,000
Name or Representative		Hsu, Kun-Tai Lu, Chin-Tsung Chen, Chiu-Lung Li, Hui-Chin Wang, Hui-Kai	Tseng, Kuo-Hua Tsai, Chih-Chieh Hu, Wei-Ming	Chen, Hsueh-Yi Tseng, Kuo-Hua Hu, Wei-Ming Huang, Ming-Hui Tsai, Chih-Chieh	Chen, Hsueh-Yi Tseng, Kuo-Hua Hu, Wei-Ming Huang, Ming-Hui Tsai, Chih-Chieh	Chen, Hsueh-Yi Hu, Wei-Ming Tseng, Kuo-Hua Huang, Ming-Hui Tsai, Chih-Chieh
Title		Chairman Director Director Supervisor General Manager	Director Director General Manager	Chairman Director Director and General Manager Director Supervisor	Chairman Director Director Director Supervisor	Chairman (Legal Representative) Director of the Legal Representative Director of the Legal Representative Director of the Legal Representative Supervisor of the Legal Representative Legal Representative: WitsLight Technology Corporation Limited
Enterprise Name		XAVi Technologies (Suzhou) Co., Ltd.	WitsLight Technology Corporation Limited (Samoa)	WitsLight Technology (Kunshan) Co., Ltd.	ZhuZhou Torch Auto Lamp Co., Ltd.	CarLight Technology Co., Ltd.

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Earnings per Share (NTD) (after taxation)	$ 2,614,435	6.44	3.03	16.92	1.81	(1,003.55)	(572.92)	4.51	(0.26)	-	-	-	(4.10)	-
Income in Current Period (after taxation) Note 2	$ 2,614,435	579,200	38,031	78,858	179,600	(61,342)	(572,919)	1,720,487	(848)	198,541	432,109	12,220	(15,775)	(14,332)
Operating Income Note 2	$ 64,859	(212)	(94)	(1,055)	(25,649)	(64,805)	385,673	595,135	(34,943)	294,235	278,025	7,437	(2,729)	3,760
Operating Income Note 2	$ -	-	-	-	1,992,683	5,885	26,429,625	31,841,716	814,502	22,161,270	18,404,986	690,010	-	8,642
Net Worth Note 1	$22,734,106	3,088,591	2,721,424	1,150,209	999,349	326,381	3,312,396	8,283,693	89,340	3,888,283	8,347,504	256,484	(310,312)	(273,617)
Total Liabilities Note 1	$152,926	1,255,871	-	483,864	686,913	1,178,882	13,318,688	12,386,298	508,020	13,385,567	7,359,361	112,147	36,737	235,987
Total Assets Note 1	$ 22,887,032	4,344,462	2,721,424	1,634,073	1,686,262	1,505,263	16,631,084	20,669,991	597,360	17,273,850	15,706,865	368,631	(273,575)	(37,630)
Authorized Capital (dollar)	10,000,000	900,000,000	12,560,000	46,600,000	993,523,140	611,252,500	1,000,000	3,867,153,750	3,250,000	9,760,000	30,778,269 224,440,430)	6,555 200,000)	3,850,001	3,850,000
	US$	NT$	US$	NT$	NT$	THB	US$	NT$	US$	US$	US$ (RMB	US$ (CZK	US$	US$
Enterprise Name	Chicony Overseas Inc.	Unikey Electronics Co., Ltd.	Hipro Overseas (BVI) Inc.	Hipro Electronics CO., LTD.	XAVi Technologies Corporation	Chicony Electronics (Thailand) Co., Ltd.	Chicony Global Inc.	Chicony Power America Co. Ltd.	Chicony America Inc.	Chicony Electronics (Dongguan) CO., Ltd.	Chicony Electronic (SuChou) Co., Ltd.	Chicony Electronics CEZ s.r.o	Global Faith, Inc.	Suzhou Mao-Qun Electronics Co.,

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Earnings per Share (NTD) (after taxation)		$ -	-	(5.43)	-	-	9.48	376.36	-	0.51	0.85	138.31	(0.46)	138.31	14.34	(0.93)
Income in Current Period (after taxation) Note 2		($12,234)	910	(12,408)	(46)	398,018	86,608	863,377	104,733	4,074	85	1,383,105	(1,761)	1,383,066	21,517	(11,870)
Operating Income Note 2		($11,325)	1,531	(44)	(46)	424,618	(17,836)	409,809	145,178	(214)	(85)	(115)	(1,515)	188,423	24,527	(6,852)
Operating Income Note 2		$125,749	32,152	-	-	4,408,741	84,889	-	6,133,520	-	-	-	-	13,680,856	1,262,843	-
Net Worth Note 1		($73,017)	10,873	(186,182)	(2,356)	2,435,761	797,339	10,114,270	1,130,213	(174,106)	(114,945)	5,631,211	36,396	5,631,168	48,621	153,763
Total Liabilities Note 1		$123,066	1,902	207,686	2,368	1,551,369	702,943	332,837	3,988,839	605,383	192,737	-	51,158	76,954	580,104	34,928
Total Assets Note 1		$50,049	12,775	21,504	12	3,987,130	1,500,282	10,447,107	5,119,052	431,277	77,792	5,631,211	87,554	5,708,122	628,725	188,691
Authorized Capital (dollar)		1,000,000	10,000,000	2,284,142	6,200,000	15,000,000	9,139,780	2,294,000	8,445,283	80,000,000	1,000,000	10,000,000	38,000,000	10,000,000	1,500,000	12,800,000
		RMB	JPY	US$	US$	US$	US$	US$	US$	NT$	NT$	US$	THB	US$	US$	US$
Enterprise Name	Ltd.	Suzhou Qun-Yang Electronics Co., Ltd.	Chicony Electronics Japan, Inc.	Kuang Mao International, Inc. (Kuang Mao International, Inc.)	Chicony America Inc.	Chicony Electronic (Chongqing) Co., Ltd.	Real Young Elec. Co., Ltd.	Mao-Feng International Inc.	Mao Ray Electronics (DongGuan) Co., Ltd.	Quansun Investment Corp., Ltd.	Chun Ching Power Technology Co., Ltd.	Chicony Power Holdings Inc.	Chicony Power Technology (Thailand) Co., Ltd.	Chicony Power International, Inc.	Chicony Power USA, Inc.	WitsLight Technology Co., Ltd.

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Earnings per Share (NTD) (after taxation)	(25.91)	$ -	-	25.68	-	-	-	-	-	-	-	11.47	14.64
Income in Current Period (after taxation) Note 2	(7,772)	($21,259)	10,506	1,201,885	187,633	683,093	8,634	371,801	(4,045)	(778)	(4,189)	88,897	109,828
Operating Income Note 2	(16,585)	($1,330)	(766)	(22,144)	212,950	864,389	7,583	427,059	(3,677)	(756)	(5,663)	-	-
Operating Income Note 2	-	$ -	779,891	127,799	10,444,460	14,016,612	876,648	6,582,537	5,471	3,154	2,865	-	-
Net Worth Note 1	(31,223)	$234,082	174,353	3,915,378	1,151,194	2,453,622	231,516	1,195,776	47,101	(362)	84,796	426,057	116,683
Total Liabilities Note 1	33,128	$20,533	502,156	1,328,736	3,470,925	5,337,355	330,765	2,379,241	9,928	3,658	73,222	-	1,951
Total Assets Note 1	1,905	$ 254,615	676,509	5,244,114	4,622,119	7,790,977	562,281	3,575,017	57,029	3,296	158,018	426,057	118,634
Authorized Capital (dollar)	3,000,000	10,500,000 66,710,247)	46,000,000	46,800,000 6,000,000)	20,750,000 157,684,105)	42,100,000 283,008,569)	4,000,000 31,170,839)	10,000,000	10,000,000	350,000	3,000,000	7,750,000	7,500,000
	NT$	US$ (RMB	RMB	HK$ (US$	US$ (RMB	US$ (RMB	US$ (RMB	US$	RMB	US$	RM	US$	US$
Enterprise Name	CarLight Technology Co., Ltd.	WitsLight Technology (KunShan) Co., Ltd.	ZhuZhou Torch Auto Lamp Co., Ltd.	Chicony Power Technology Hong Kong Limited	Chicony Power Technology (DongGuan) Co., Ltd.	Chicony Power Technology (SuChou) Co. Ltd.	Quang Sheng Electronics (Nanchang) Co., Ltd.	Chicony Power Technology (Chongqing) Co. Ltd.	Chicony Energy Saving Technology (Shanghai) Co., Ltd.	DongGuan Chicony Power Energy Trading Co., Ltd.	Chicony Power Technology (Taizhou) Co., Ltd.	Directmax International Ltd.	XAVi Overseas Ltd.

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Earnings per Share (NTD) (after taxation)	($83.72)	-
Income in Current Period (after taxation) Note 2	($20,931)	109,828
Operating Income Note 2	($24,475)	111,121
Operating Income Note 2	$677,259	2,142,734
Net Worth Note 1	$309,374	118,582
Total Liabilities Note 1	$12,754	856,265
Total Assets Note 1	$322,128	974,847
Authorized Capital (dollar)	250,000	10,000,000 68,820,935)
	US$	US$ (RMB
Enterprise Name	Systemax Development, Ltd.	XAVi Technologies (Suzhou) Co., Ltd.

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Chicony Electronics CO., Ltd. Affiliates Consolidated Financial Statement Announcements

For the fiscal year of 2019 (from January 1, 2019 to December 31, 2019), the companies which should be included in the con solidated financial statements of the Company pursuant to the Affiliates Consolidated Business Reports and Consolidated Financial Statements Preparation of Affiliation Reports are the same as those should be included pursuant to the Statement of Financial Accounting Standards No. 10, and also the Affiliates Consolidated Financial Statements should disclose information on the parent company that has already been disclosed in the Consolidated Financial Statements of the Company. Therefore, the Company will not prepare separate Affiliates Consolidated Financial Statements.

Hereby Declare

Name of Company: Chicony Electronics CO., Ltd.

Chairman: Hsu, Kun-Tai

March 10, 2020

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The Company Lent the Amount to the Subsidiary	The Company Lent the Amount to the Subsidiary	1,139,530	1,251,500	1,251,000	`－`	`－`	`－`
The Company Undertakes Endorsements/ Guarantees in Favor of Subsidiaries		`－`	`－`	`－`	`－`	`－`	`－`
Pledge Under Lien		Note 2	Note 3	Note 3	Note 4	Note 4	Note 4
Number and Amount of Shares Held by the End of the Year or the Date of Printing	Amount	205,795	205,795	205,795	105,483	105,483	105,483
	Quantity of Shares	21,174,298	21,174,298	21,174,298	16,188,935	16,188,935	16,188,935
Capital Gains/Losses From Investment	Amount	`－`	`－`	`－`	`－`	`－`	`－`
Quantity and Amount of Shares Disposed	Amount	`－`	`－`	`－`	`－`	`－`	`－`
	Quantity of Shares	`－`	`－`	`－`	`－`	`－`	`－`
Quantity and Amount of Shares Acquired (Note 1)	Amount	`－`	`－`	`－`	`－`	`－`	`－`
	Quantity of Shares	105,344	`－`	`－`	80,541	`－`	`－`
Date of	Acquisition or Disposition	2018	2019	3/31/2020	2018	2019	3/31/2020
Proportion of Shareholdin g by the Company		100%			100%
Sources of Capital		Owned Capital			Owned Capital
Paid-in Capital		900,000			46,600
Subsidiary Name		Unikey Electronics Co., Ltd.			Hipro Electronics CO., LTD.

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AI assistant

CHICONY — Annual Report 2019

52047_rns_2020-06-10_19905fd7-d318-46b4-812c-694a4d89b7a3.pdf

Chicony Electronics Co., Ltd. 2019 Annual Report

1. The names, title, telephone numbers, and e-mail addresses of the Spokesperson and Deputy spokesperson:

2. Headquarter, branch office and factories:

3. The name, address, website, and telephone number of the stock transfer agent:

4. The names, office name, address, website, and telephone number of the

verifying CPAs of the most recent financial report:

5. The name of the Exchange where the overseas securities are listed and the ethod for querying the information of the overseas securities:

6. Company website:

Chicony Electronics CO., Ltd. Table of Contents

V. Operational Highlights

I. Letter to Shareholders

(1) 2019 Operational Result

(3) Research and development

2. 2020 Business Project Summary

(1) 2020 Business Target and Business Outlook

(3) Important production and marketing policies

II. Company Profile

(2) Job Functions of Major Departments

4. Names of Managers and the Distribution of Remuneration to Employees in 2019

3. Corporate Governance in action

(1) Status on Implementation of Board of Directors (1)

2. Status on Participation of Supervisors in the Operation of the Board of Directors

The participation of the Supervisors in the operation of the Board

Schedule 1:

(II) About the Succeeding CPA

(II) The counterparties of equity transfer are related parties:

8. Information on relationships among the top ten shareholders:

IV. Status of financing

(2) Structure of shareholders

(3) Dispersion of equity shares

V. Operational Highlights

Main Classification of Power Supply

3. Power Supply and LED Light Source Products

(1) Product is Oriented towards Being Small and Beautiful

A. Office Automation and PC Power Products:

B. Entertainment Input Device:

2. Market Share of Product

B. Great Product Manufacturing Experience in ODM/OEM

1. Primary Use:

(3) Switching Power Supply (including LED drive power):

a. Production Process

(5) Production Volume Table

(6) Sales Volume Table

Unit: Thousand Unit/ NT$ 1,000

6. Vital contracts

VII.Financial Highlights

(II) 1. Concise Consolidated Comprehensive Income Statement

(II) 2.Separate Condensed Comprehensive Income Statement

(III ) Audit Situation for the CPA

2. Financial Analysis of the Recent 5 years

Chicony Electronics CO., Ltd.

The Audit Committee’s Review Report

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Appropriateness of warehouse operating revenue cut-off

Description

How our audit addressed the matter

Valuation of inventory

Description

How our audit addressed the matter

Other matter - Audit by other auditors

Other matter - Parent company only financial reports

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

CHICONY ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2019 AND 2018

1. HISTORY AND ORGANISATION

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

CHICONY Annual Report 2019