Coxon — Annual Report 2018

Nov 14, 2018

Coxon Precise Industrial Co., Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2018 and 2017 and Independent Auditors’ Report

1

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2018 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

COXON PRECISE INDUSTRIAL CO., LTD.

By:

CHANG, WEN-TUNG Director March 14, 2019

2

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Coxon Precise Industrial Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Coxon Precise Industrial Co., Ltd. and its subsidiaries (collectively referred to as the “ Group ” ), which comprise the consolidated balance sheets as of December 31, 2018 and 2017, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended and the notes to the consolidated financial statements, including a summary of significant accounting policies(collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2018 and 2017, 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 International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

3

The key audit matters of the consolidated financial statements for the year ended December 31, 2018 are as follows:

Sales Revenue Recognition Specific Customers

The sales revenue of Coxon Precise Industrial Co., Ltd. and its subsidiaries for the year ended December 31, 2018 was $ 5,499,980 thousand. According to the auditing standards, revenue recognition is presumed to have a significant audit risk; in addition, the sales of Coxon Precise Industrial Co., Ltd. and its subsidiary mainly come from distributors. As sales revenue generated from a single transaction which was derived from specific distributors are higher than that from other customers, we considered the occurrence of revenue as a key audit matter. Refer to Notes 4 and 28 to the consolidated financial statements.

Our key audit procedures performed in respect of the sales revenue recognition included the following:

1. We understood, evaluated and tested the effectiveness of the design and implementation of internal control system that is related to revenue recognition.

2. We obtained the sales details of specific customers for the year ended December 31, 2018 and we sampled and tested the selected sales transactions with their original purchase orders, delivery orders and invoices, and we compared the amounts to to their respective accounts to ensure the occurrence of the sales.

3. We obtained the sales returns details of specific customers for the subsequent period, sampled and tested the related sales return supporting documents and reviewed the reasonableness of the occurrence of such sales returns.

Other Matters

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income for the year ended December 31, 2017 were based on the associates’ financial statements audited by other auditors for the years then ended.

As of December 31, 2017, the amount of investment accounted for using the equity method was $324,133 thousand, which accounted for 3% of the total consolidated asset. For the year ended December 31, 2017, the share of profit or loss of associates and joint ventures was $3,575 thousand, which accounted for 1% of the loss before income tax.

We have also audited the parent company only financial statements of Coxon Precise Industrial Co., Ltd. as of and for the years ended December 31, 2018 and 2017 on which we have issued an unmodified opinion.

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 IFRS, IAS, IFRIC and SIC endorsed and issued into effect by the FSC of the Republic of China, 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.

4

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 supervisors, are responsible for overseeing the Group’s financial reporting process.

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

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

1. Identify and assess the risks of material misstatement of the 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 control.

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 auditors’ 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 auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. 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.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of 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.

5

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 statements 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 for the year ended December 31, 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Jui-Chuan Chih and Su-Huan You.

Deloitte & Touche Taipei, Taiwan Republic of China March 14, 2019

Notice to Readers

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

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

6

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 6 and 37) Financial assets at fair value through profit or loss - current (Notes 7 and 37) Financial assets at fair value through other comprehensive income - current (Notes 8 and 37) Available-for-sale financial assets - current (Notes 10 and 37) Financial assets at amortized cost - current (Notes 9, 37 and 39) Trade receivables (Notes 12, 28 and 37) Trade receivables from related parties (Notes 12, 28, 37 and 39) Other receivables (Note 37) Other receivables from related parties (Notes 37 and 38) Current tax assets (Note 30) Inventories (Note 13) Prepayments (Notes 19 and 37) Non-current assets held for sale (Note 14) Other financial assets - current (Notes 20, 37 and 39) Other current assets (Note 20) Total current assets NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 8 and 37) Financial assets measured at cost - non-current (Notes 11 and 37) Investments accounted for using the equity method (Notes 16 and 42) Property, plant and equipment (Notes 17 and 39) Intangible assets (Note 18) Deferred tax assets (Note 30) Prepayments for equipment (Note 41) Prepayments for investments (Note 20) Long-term prepayments for leases (Notes 19 and 39) Other non-current assets (Notes 12 and 20) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Financial liabilities at fair value through profit or loss - current (Notes 7, 22 and 37) Contract liabilities - current (Notes 28 and 38) Notes payable (Notes 23 and 37) Trade payables (Notes 23 and 37) Payables on equipment (Note 37) Other payables (Notes 24 and 37) Other payables to related parties (Notes 24, 37 and 38) Current tax liabilities (Notes 30 and 37) Provisions - current (Note 25) Liabilities directly associated with non-current assets held for sale (Notes 14 and 38) Receipts in advance (Note 38) Current portion of bonds payable executed with reverse repurchase agreements (Notes 22, 34 and 37) Current portion of long-term borrowings (Notes 21, 34 and 37) Other current liabilities (Notes 24 and 38) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 21 and 37) Deferred tax liabilities (Note 30) Net defined benefit liabilities - non-current (Note 26) Other non-current liabilities (Notes 24 and 38) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 27 and 33) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2018 Amount % $ 1,233,017 18 85,031 1 201,879 3 - - 117,217 2 1,514,329 22 64,626 1 35,635 - 24,938 - 22,447 - 538,979 8 130,573 2 538,154 8 - - 36,563 - 4,543,388 65 54,942 1 - - 29,214 - 2,018,600 29 33,275 1 149,549 2 81,832 1 30,000 - 34,607 1 14,915 - 2,446,934 35 $ 6,990,322 100 $ - - 44,254 1 258 - 1,023,231 15 20,662 - 574,002 8 - - 8,619 - 16,851 - 58,529 1 - - - - 191,667 3 1,956 - 1,940,029 28 800,000 11 15,979 - 42,172 1 10,459 - 868,610 12 2,808,639 40 1,216,622 17 2,649,585 38 671,798 10 221,728 3 (327,913) (5) 565,613 8 (354,252) (5) 4,077,568 58 104,115 2 4,181,683 60 $ 6,990,322 100		2017
				Amount % $ 1,889,851 20 - - - - 19,780 - - - 2,032,398 22 298 - 32,698 1 31,909 - - - 682,613 7 140,191 2 - - 678,944 7 5,852 - 5,514,534 59 - - 101,398 1 324,133 3 2,985,645 32 43,354 - 207,321 2 149,742 2 - - 50,084 1 7,877 - 3,869,554 41 $ 9,384,088 100 $ 2,425 - - - 484 - 969,939 10 47,478 1 775,202 8 228 - 47,417 1 16,261 - - - 51,618 1 100,700 1 695,834 7 11,498 - 2,719,084 29 1,200,000 13 140,284 2 40,705 - 7,566 - 1,388,555 15 4,107,639 44 1,216,622 13 2,749,231 29 671,798 7 28,722 - 657,852 7 1,358,372 14 (221,728) (2) 5,102,497 54 173,952 2 5,276,449 56 $ 9,384,088 100

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

(With Deloitte & Touche auditors’ report dated March 14, 2019)

7

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Losses Per Share)

OPERATING REVENUE (Notes 28 and 38) OPERATING COSTS (Notes 13 and 29) GROSS (LOSS) PROFIT OPERATING EXPENSES (Note 29) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses OTHER OPERATING INCOME AND EXPENSES (Notes 29 and 38) LOSS FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 16, 17, 22, 29, 32 and 38) Other income Other gains and losses Finance costs Share of loss of associates and joint ventures Total non-operating income and expenses LOSS BEFORE INCOME TAX FROM CONTINUING OPERATIONS INCOME TAX (EXPENSE) BENEFIT (Note 30) NET LOSS FROM DISCONTINUING OPERATIONS NET LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 26, 27 and 30) Items that will not be reclassified subsequently to profit or loss:		2018	% 100 (100) - (4) (8) - - (12) - (12) - - (1) - (1) (13) - (3) (16)		2017
		Amount $ 5,499,980 (5,516,027) (16,047) (200,778) (458,226) (18,477) (2,594) (680,075) 34,106 (662,016) 8,460 6,768 (32,939) (24,983) (42,694) (704,710) (3,734) (182,008) (890,452)			Amount % $ 5,486,690 100 (5,167,709) (94) 318,981 6 (198,594) (4) (522,101) (9) (30,144) (1) - - (750,839) (14) 14,152 - (417,706) (8) 9,784 - (56,360) (1) (36,889) - (3,575) - (87,040) (1) (504,746) (9) 94,362 2 (21,621) (1) (432,005) (8) (Continued)

8

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Losses Per Share)

Actuarial loss arising from defined benefit plans Unrealized gain on investments in equity instruments at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations Unrealized loss on available-for-sale financial assets Income tax relating to item that may be reclassified subsequently to profit or loss Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE LOSS FOR THE YEAR NET LOSS ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO: Owners of the Company Non-controlling interests		2018 Amount % (1,335) - 24,561 - 1,099 - (159,594) (3) - - 40,073 1 (95,196) (2) $ (985,648) (18) $ (837,986) (15) (52,556) (1) $ (890,542) (16) $ (931,861) (17) (53,877) (1) $ (985,738) (18)		2017
				Amount % (8,125) - - - 1,381 - (232,683) (4) (2,325) - 39,057 - (202,695) (4) $ (634,700) (12) $ (395,810) (7) (36,195) (1) $ (432,005) (8) $ (595,560) (11) (39,140) (1) $ (634,700) (12) (Continued)

9

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Except Losses Per Share)

LOSSES PER SHARE (NEW TAIWAN DOLLARS; Note 27) From continuing and discontinued operations Basic Diluted From continuing operations Basic Diluted	2018 Amount % $ (6.89) $ (6.89) $ (5.39) $ (5.39)	2017
		Amount % $ (3.25) $ (3.25) $ (3.07) $ (3.07)

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

(With Deloitte & Touche auditors’ report dated March 14, 2019) (Concluded)

10

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2017 Appropriation of the 2016 earnings Special reserve Cash dividends from capital surplus Buy-back of convertible bonds Net loss for the year ended December 31, 2017 Other comprehensive loss for the year ended December 31, 2017, net of income tax Total comprehensive loss for the year ended December 31, 2017 Buy-back of treasury shares Retirement of treasury shares Changes in percentage of ownership interests in subsidiaries Non-controlling interests BALANCE AT DECEMBER 31, 2017 Effect of retrospective application and retrospective restatement BALANCE AT JANUARY 1, 2018 AS RESTATED Appropriation of the 2017 earnings Special reserve Cash dividends from capital surplus Redemption of bond Net loss for the year ended December 31, 2018 Other comprehensive income (loss) or the year ended December 31, 2018, net of income tax Total comprehensive income (loss) for the year ended December 31, 2018 Non-controlling interests Disposals of investments in equity instruments designated as at fair value through other comprehensive BALANCE AT DECEMBER 31, 2018		Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Total Non-controlling Interests $ 5,932,774 $ 149,671 - - (182,493) - (12,790) - (395,810) (36,195) (199,750) (2,945) (595,560) (39,140) (31,489) - - - (7,945) 7,945 - 55,476 5,102,497 173,952 6,578 - 5,109,075 173,952 - - (97,330) - (2,316) - (837,986) (52,556) (93,875) (1,321) (931,861) (53,877) - (15,960) - - $ 4,077,568 $ 104,115	Total Equity $ 6,082,445 - (182,493) (12,790) (432,005) (202,695) (634,700) (31,489) - - 55,476 5,276,449 6,578 5,283,027 - (97,330) (2,316) (890,542) (95,196) (985,738) (15,960) - $ 4,181,683
	Ordinary Shares Shares Issued (In Thousands) Share Capital Capital Surplus 125,151 $ 1,251,512 $ 3,017,023 - - - - - (182,493) - - (12,790) - - - - - - - - - - - - (3,489) (34,890) (64,564) - - (7,945) - - - 121,662 1,216,622 2,749,231 - - - 121,662 1,216,622 2,749,231 - - - - - (97,330) - - (2,316) - - - - - - - - - - - - - - - 121,662 $ 1,216,622 $ 2,649,585	Retained Earnings Legal Reserve Special Reserve Unappropriated Earnings $ 671,798 $ - $ 1,102,247 - 28,722 (28,722) - - - - - - - - (395,810) - - (6,744) - - (402,554) - - - - - (13,119) - - - - - - 671,798 28,722 657,852 - - 22,267 671,798 28,722 680,119 - 193,006 (193,006) - - - - - - - - (837,986) - - (236) - - (838,222) - - - - - 23,196 $ 671,798 $ 221,728 $ (327,913)	Other Equity Exchange Differences on Unrealized Gain (Loss) on Unrealized Gain (Loss) on Financial Assets at Fair Value Translating Available-for- Through Other Foreign Operations sale Financial Assets Comprehensive Income Treasury Shares $ (41,653) $ 12,931 $ - $ (81,084) - - - - - - - - - - - - - - - - (190,681) (2,325) - - (190,681) (2,325) - - - - - (31,489) - - - 112,573 - - - - - - - - (232,334) 10,606 - - - (10,606) (5,083) - (232,334) - (5,083) - - - - - - - - - - - - - - - - - (118,200) - 24,561 - (118,200) - 24,561 - - - - - - - (23,196) - $ (350,534) $ - $ (3,718) $ -

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

(With Deloitte & Touche auditors’ report dated March 14, 2019)

11

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NET CASH FLOWS GENERATED FROM OPERATING ACTIVITIES Income before income tax from continuing operations Income before income tax from discontinued operations Loss before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss recognized Impairment loss recognized on trade receivables Net loss on fair value changes of financial assets and liabilities designated as at fair value through profit or loss Finance costs Interest income Dividend income Share of loss of associates and joint ventures Gain on disposal of property, plant and equipment Gain on disposal of investments (Reversal of) impairment loss recognized on property, plant and equipment (Reversal of) write-down of inventories Unrealized (gain) loss on the foreign currency exchange Changes in operating assets and liabilities Trade receivables Other receivables Inventories Prepayments Other current assets Contract liabilitties Notes payable Trade payables Other payables Provisions Receipt in advance Other current liabilities Deferred revenue Net defined benefit liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities	2018 $ (704,800) (182,004) (886,804) 631,186 18,386 5,247 - 8,319 32,939 (8,276) (184) 24,983 (58,719) (125,067) 172,003 172,319 10,711 414,170 408 (26,826) 6,378 (30,711) (6,096) (226) 70,796 (178,218) 590 - (8,983) 4,638 132 243,095 8,276 184 (29,824) (89,600) 132,131	2017 $ (504,746) (22,093) (526,839) 720,207 17,643 - 25,022 3,648 36,889 (10,285) (178) 3,575 (3,258) (17,542) 7,469 30,340 (5,456) (48,638) 27,037 (16,358) 14,323 371 - (166) 64,074 (18,909) (3,272) (2,136) (27,714) - (130) 269,717 10,285 178 (26,304) (68,018) 185,858

(Continued)

12

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

NET CASH FLOWS GENERATED FROM (USED IN) INVESTING ACTIVITIES Purchase of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through other comprehensive income Purchase of available-for-sale financial assets Proceeds from sale of available-for-sale financial assets Purchase of financial assets at amortized cost Purchase of financial assets measured at cost Proceeds from sale of financial assets measured at cost Disposal of investments accounted for using the equity method Increase in prepayments for investment Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Payments for intangible assets (Increase) decrease in other financial assets Increase in prepayments for equipment Net cash used in investing activities NET CASH USED IN FINANCING ACTIVITIES Repayments of bonds Repayments for buy-back of bonds Proceeds from long-term borrowings Repayments of long-term borrowings Increase in guarantee deposits received Dividends paid to owners of the Company Payments to acquire treasury shares Changes in non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2018 (123,660) 26,418 - - 548,885 - - 156,775 (30,000) (159,502) 164,141 (7,307) (8,328) - (4,972) 562,450 (107,499) - 2,000,000 (2,904,167) 3,641 (97,330) - (15,960) (1,121,315) (38,423) (465,157) 1,889,851 $ 1,424,694	2017 - - (1,645) 19,159 - (45,053) 1,203 - - (227,389) 67,555 (997) (12,162) (430,511) (144,162) (774,002) - (701,041) 500,000 (104,167) 3,021 (182,493) (31,489) 55,476 (460,693) 16,876 (1,031,961) 2,921,812 $ 1,889,851 (Continued)

13

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars)

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent item reported in the consolidated balance sheets at December 31, 2018 and 2017:

Cash and cash equivalents in consolidated balance sheets Cash and cash equivalents in disposal group held for sale Cash and cash equivalents in consolidated statements of cash flows		December 31	December 31
		2018 $ 1,233,017 191,677 $ 1,424,694	2017 $ 1,889,851 - $ 1,889,851

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

(With Deloitte & Touche auditors’ report dated March 14, 2019) (Concluded)

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

1. GENERAL INFORMATION

Coxon Precise Industrial Co., Ltd. (the “Company”) was incorporated in the Republic of China (ROC) in June 1989. The Company mainly manufactures, packages and sells all kinds of molds, metal and plastic components and makes relevant investments.

The Company’s shares were previously listed on the Taipei Exchange (formerly the Taiwan GreTai Securities Market) since January 2008 and has now been listed on the Taiwan Stock Exchange (TWSE) since October 2009.

The consolidated financial statements of the Company and its subsidiaries, collectively referred to as the “Group”, are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the board of directors and authorized for issue on March 14, 2019.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

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

Except for the following, whenever applied, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC would not have any material impact on the Group’s accounting policies:

• 1) Annual Improvements to IFRSs 2014-2016 Cycle

Several standards, including IFRS 12 “Disclosure of Interests in Other Entities” and IAS 28 “Investments in Associates and Joint Ventures,” were amended in this annual improvement.

The amendment to IFRS 12 clarifies that when an entity’s interest in a subsidiary, a joint venture or an associate is classified as held for sale or is included in a disposal group that is classified as held for sale, the entity is not required to disclose summarized financial information of that subsidiary, joint venture or associate in accordance with IFRS 12. However, all other requirements in IFRS 12 apply to interests in entities classified as held for sale in accordance with IFRS 5. The Group applied the aforementioned amendment retrospectively.

15

• 2) IFRS 9 “Financial Instruments” and related amendments

IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement”, with consequential amendments to IFRS 7 “Financial Instruments: Disclosures” and other standards. IFRS 9 sets out the requirements for classification, measurement and impairment of financial assets and hedge accounting. Refer to Note 4 for information relating to the relevant accounting policies.

Classification, measurement and impairment of financial assets

On the basis of the facts and circumstances that existed as of January 1, 2018, the Group has performed an assessment of the classification of recognized financial assets and has elected not to restate prior reporting periods.

The following table shows the original measurement categories and carrying amount under IAS 39 and the new measurement categories and carrying amount under IFRS 9 for each class of the Group’s financial assets and financial liabilities as of January 1, 2018.

		Measurement Category	Measurement Category	Measurement Category	Measurement Category	Measurement Category	Measurement Category				Carrying Amount	Carrying Amount	Carrying Amount	Carrying Amount
Financial Assets		IAS 39					IFRS 9				IAS	39		IFRS 9		Remark
Cash and cash equivalents	Loans	and receivables		Amortized cost						$	1,889,851		$ 1,889,851			b)
Equity securities	Available‑for‑sale			Fair		value through other					19,780			19,780		a)
					comprehensive income
					(FVTOCI) - equity
					instruments
	Measured at cost			FVTOCI			- equity				101,398			107,976		a)
					instruments
Notes receivable, trade	Loans	and receivables		Amortized cos							2,097,303			2,097,303		c)
receivables and other
receivables
Other financial assets -	Loans	and receivables		Amortized cost							678,944			678,944		b)
current
		IAS 39							IFRS 9
		Carrying						Carrying			Retained			Other
		Amount						Amount as			Earnings			Equity
		as of							of		Effect on			Effect on
		January 1,		Reclassifi-			Remea-	January		1,	January 1,			January 1,
Financial Assets		2018		cations		surements			2018			2018		2018		Remark
FVTOCI
Equity instruments		$ 101,398		$ (101,398 )		$	-	$		-	$		-	$	-	a)
Add: Reclassification from fair	value	19,780		(19,780 )			-			-			-		-	a)
through profit or loss (FVTPL) (IAS
39) (including fair value option
revoked)
Add: Reclassification from			-	121,178			6,578		127,756			22,267		(15,689)		a)
available-for-sale (IAS 39)
		$ 121,178		$	-	$	6,578	$	127,756		$	22,267		$ (15,689)

• a) The Group elected to designate all its investments in equity securities previously classified as available-for-sale under IAS 39 as at FVTOCI under IFRS 9, because these investments are not held for trading. As a result, the related other equity - unrealized gain (loss) on available-for-sale financial assets of $10,606 thousand was reclassified to other equity - unrealized gain (loss) on financial assets at FVTOCI.

Investments in unlisted shares previously measured at cost under IAS 39 have been designated as at FVTOCI under IFRS 9 and were remeasured at fair value. Consequently, an increase of $6,578 thousand was recognized in both financial assets at FVTOCI and other equity - unrealized gain (loss) on financial assets at FVTOCI on January 1, 2018.

16

The Group recognized under IAS 39 impairment loss on certain investments in equity securities previously measured at cost and the loss was accumulated in retained earnings. Since those investments were designated as at FVTOCI under IFRS 9 and no impairment assessment is required, an adjustment was made that resulted in a decrease of $5,083 thousand in other equity - unrealized gain (loss) on financial assets at FVTOCI and an increase of $22,267 thousand in retained earnings on January 1, 2018.

• b) Cash and cash equivalents and other financial assets -current previously classified as loans and receivables under IAS 39 are classified as at amortized cost under IFRS 9.

• c) Notes receivable, trade receivables and other receivables that were previously classified as loans and receivables under IAS 39 are classified as at amortized cost with an assessment of expected credit losses under IFRS 9.

• 3) IFRS 15 “Revenue from Contracts with Customers” and related amendments

IFRS 15 establishes principles for recognizing revenue that apply to all contracts with customers and supersedes IAS 18 “Revenue”, IAS 11 “Construction Contracts” and a number of revenue-related interpretations. Refer to Note 4 for related accounting policies.

• 4) Amendments to IAS 12 “Recognition of Deferred Tax Assets for Unrealized Losses”

The amendments clarify that the difference between the carrying amount of the debt instrument measured at fair value and its tax base gives rise to a temporary difference, even though there are unrealized losses on that asset, irrespective of whether the Group expects to recover the carrying amount of the debt instrument by sale or by holding it and collecting contractual cash flows.

In addition, in determining whether to recognize a deferred tax asset, the Group should assess a deductible temporary difference in combination with all of its other deductible temporary differences, unless the tax law restricts the utilization of losses as deduction against income of a specific type, in which case, a deductible temporary difference is assessed in combination only with other deductible temporary differences of the appropriate type. The amendments also stipulate that, when determining whether to recognize a deferred tax asset, the estimate of probable future taxable profit may include some of the Group’s assets for more than their carrying amount if there is sufficient evidence that it is probable that the Group will achieve the higher amount and that the estimate for future taxable profit should exclude tax deductions resulting from the reversal of deductible temporary differences.

Prior to the amendment, in assessing a deferred tax asset, the Group assumed that it will recover the asset at its carrying amount when estimating probable future taxable profit. The Group applied the above amendments retrospectively in 2018.

• 5) IFRIC 22 “Foreign Currency Transactions and Advance Consideration”

IAS 21 stipulated that a foreign currency transaction shall be recorded on initial recognition in the functional currency by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. IFRIC 22 further explains that the date of the transaction is the date on which an entity recognizes a non-monetary asset or non-monetary liability from payment or receipt of advance consideration. If there are multiple payments or receipts in advance, the entity shall determine the date of the transaction for each payment or receipt of advance consideration.

The Group applied IFRIC 22 prospectively to all assets, expenses and income recognized on or after January 1, 2018 within the scope of the Interpretation.

17

• b. Amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed by the FSC for application starting from 2019

New, Amended or Revised Standards and Interpretations (the“New IFRSs”) Annual Improvements to IFRSs 2015-2017 Cycle 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”	Effective Date Announced by IASB (Note 1)
	January 1, 2019 January 1, 2019 (Note 2) January 1, 2019 January 1, 2019 (Note 3) January 1, 2019 January 1, 2019

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

• Note 2: The FSC permits the election for early adoption of the amendments starting from 2018.

• Note 3: The Group shall apply these amendments to plan amendments, curtailments or settlements occurring on or after January 1, 2019.

• 1) IFRS 16 “Leases”

IFRS 16 sets out the accounting standards for leases that will supersede IAS 17 and a number of related interpretations.

Definition of a lease

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

The Group as lessee

Upon initial application of IFRS 16, the Group will recognize right-of-use assets, or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases will be recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group will present the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities will be classified within financing activities; cash payments for the interest portion will be classified within operating activities. Currently, payments under operating lease contracts, including property interest qualified as investment properties, are recognized as expenses on a straight-line basis. Prepaid lease payments for land use rights of land located in China are recognized as prepayments for leases. Cash flows for operating leases are classified within operating activities on the consolidated statements of cash flows. Leased assets and finance lease payables are recognized for contracts classified as finance leases.

18

The Group anticipates applying IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized on January 1, 2019. Comparative information will not be restated.

The Group as lessor

Except for sublease transactions, the Group will not make any adjustments for leases in which it is a lessor and will account for those leases with the application of IFRS 16 starting from January 1, 2019.

Anticipated impact on assets, liabilities and equity

Carrying Amount as of December 31, 2018 Investment properties $ - Total effect on assets $ - Finance lease payables - non-current $ - Total effect on liabilities $ -	Adjustments Arising from Initial Application Adjusted Carrying Amount as of January 1, 2019 $ 1,086,086 $ 1,086,086 $ 1,086,086 $ 1,086,086 $ 1,086,086 $ 1,086,086 $ 1,086,086 $ 1,086,086

• 2) IFRIC 23 “Uncertainty over Income Tax Treatments”

IFRIC 23 clarifies that when there is uncertainty over income tax treatments, the Group should assume that the taxation authority will have full knowledge of all related information when making related examinations. If the Group concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the Group should determine the taxable profit, tax bases, unused tax losses, unused tax credits or tax rates consistently with the tax treatments used or planned to be used in its income tax filings. If it is not probable that the taxation authority will accept an uncertain tax treatment, the Group should make estimates using either the most likely amount or the expected value of the tax treatment, depending on which method the Group expects to better predict the resolution of the uncertainty. The Group has to reassess its judgments and estimates if facts and circumstances change.

Upon initial application of IFRIC 23, the Group will recognize the cumulative effect of retrospective application in retained earnings on January 1, 2019.

• 3) Amendments to IAS 28 “Long-term Interests in Associates and Joint Ventures”

The amendments clarified that IFRS 9 shall be applied to account for other financial instruments in an associate or joint venture to which the equity method is not applied. These included long-term interests that, in substance, form part of the Group’s net investment in an associate or joint venture. For long-term interests that, in substance, form part of the Group’s net investment in an associate or joint venture and are governed by IFRS 9, the Group shall, based on the facts and circumstances that exist on January 1, 2019, perform an assessment of the classification under IFRS 9 applied retrospectively.

19

• 4) Amendments to IFRS 9 “Prepayment Features with Negative Compensation”

IFRS 9 stipulated that if a contractual term of a financial asset permits the issuer (i.e. the debtor) to prepay a debt instrument or permits the holder (i.e. the creditor) to put a debt instrument back to the issuer before maturity and the prepayment amount substantially represents unpaid amounts of the principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination, the financial asset has contractual cash flows that are solely payments of principal and interest on the principal amount outstanding. The amendments further explain that reasonable compensation may be paid or received by either of the parties, i.e. a party may receive reasonable compensation when it chooses to terminate the contract early.

Upon initial application of the above amendments, the Group will recognize the cumulative effect of retrospective application in retained earnings on January 1, 2019.

• 5) Annual Improvements to IFRSs 2015-2017 Cycle

Several standards, including IFRS 3, IFRS 11, IAS 12 and IAS 23 “Borrowing Costs”, were amended in this annual improvement. IAS 23 was amended to clarify that, if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, the related borrowing costs shall be included in the calculation of the capitalization rate on general borrowings. Upon initial application of the above amendment, the related borrowing costs will be included in the calculation starting from 2019.

• 6) Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement”

The amendments stipulate that, if a plan amendment, curtailment or settlement occurs, the current service cost and the net interest for the remainder of the annual reporting period are determined using the actuarial assumptions used for the remeasurement of the net defined benefit liabilities (assets). In addition, the amendments clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Group will apply the above amendments prospectively.

• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs Amendments to IFRS 3 “Definition of a Business” 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 and IAS 8 “Definition of Material”	Effective Date Announced by IASB (Note 1)
	January 1, 2020 (Note 2) To be determined by IASB January 1, 2021 January 1, 2020 (Note 3)

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual periods beginning on or after their respective effective dates.

• Note 2: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.

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

20

• 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

The amendments stipulate that, when the Group sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or loss resulting from the transaction is recognized in full. Also, when the Group loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Group sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Group’s interest as an unrelated investor in the associate or joint venture, i.e. the Group’s share of the gain or loss is eliminated. Also, when the Group loses control of a subsidiary that does not contain a business but retains significant influence or joint control over an associate or a joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Group’s interest as an unrelated investor in the associate or joint venture, i.e. the Group’s share of the gain or loss is eliminated.

• 2) Amendments to IFRS 3 “Definition of a Business”

The amendments clarify that, to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process applied to the input that together significantly contribute to the ability to create outputs. The amendments narrow the definitions of outputs by focusing on goods and services provided to customers, and the reference to an ability to reduce costs is removed. Moreover, the amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs. In addition, the amendments introduce an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

• b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

21

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and

• 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. 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.

Assets and liabilities that are not classified as current are classified as non-current.

• d. Basis of consolidation

• Principles for preparing consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e. its subsidiaries, including structured entities).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

22

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required had the Group directly disposed of the related assets or liabilities.

The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition of an investment in an associate or a jointly controlled entity.

See Note 15, Tables 5 and 6 for detailed information on subsidiaries (including the percentages of ownership and main businesses).

e. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting consolidated financial statements, the functional currencies of the Group (including subsidiaries, associates, joint ventures and branches in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the year. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to the non-controlling interests of the subsidiary but is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

23

f. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

g. Investments in associates and joint ventures

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture.

The Group uses the equity method to account for its investments in associates and joint ventures.

Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Group also recognizes the changes in the Group’s share of the equity of associates and joint ventures attributable to the Group.

Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

24

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate directly disposed of the related assets or liabilities.

When a group entity transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Group’ consolidated financial statements only to the extent that interests in the associate and the joint venture are not related to the Group.

• h. Property, plant and equipment

Property, plant and equipment (including assets held under finance leases and bearer plants) are measured at cost less accumulated depreciation and accumulated impairment loss.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• i. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

• 2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

• j. Impairment of tangible and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

25

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

k. Non-current assets held for sale

Non-current assets (or disposal groups) are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within 1 year from the date of classification.

When a sale plan would result in a loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale, regardless of whether the Group will retain a non-controlling interest in that subsidiary after the sale.

When the Group is committed to a sale plan involving the disposal of an investment or a portion of an investment in an associate or a joint venture, only the investment or the portion of the investment that will be disposed of is classified as held for sale when the classification criteria are met, and the Group discontinues the use of the equity method in relation to the portion that is classified as held for sale. Any retained portion of an investment in an associate or a joint venture that has not been classified as held for sale continues to be accounted for using the equity method. If the Group ceases to have significant influence or joint control over the investment after the disposal takes place, the Group accounts for any retained interest that has not been classified as held for sale in accordance with the accounting policies for financial instruments.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation of those assets would cease.

When a subsidiary, joint operation, joint venture, associate, or a portion of an interest in a joint venture or an associate previously classified as held for sale no longer meets the criteria to be so classified, it is measured at the carrying amount that would have been recognized had such interests not been classified as held for sale. The consolidated financial statements for the years since classification as held for sale are amended accordingly.

l. Financial instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

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

26

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

• a) Measurement categories

2018

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

• i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified or designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note XX.

• ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables at amortized cost and financial assets at amortized cost - current, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

• i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

• ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

27

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• iii. Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

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

2017

Financial assets are classified into the following categories: Available-for-sale financial assets, and loans and receivables.

i. Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL.

Available-for-sale financial assets are measured at fair value. Changes in the carrying amounts of available-for-sale monetary financial assets (relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and dividends on available-for-sale equity investments) are recognized in profit or loss. Other changes in the carrying amount of available-for-sale financial assets are recognized in other comprehensive income and will be reclassified to profit or loss when such investments are disposed of or are determined to be impaired.

Dividends on available-for-sale equity instruments are recognized in profit or loss when the Group’s right to receive the dividends is established.

Available-for-sale equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment loss at the end of each reporting period and presented in a separate line item as financial assets measured at cost. If, in a subsequent period, the fair value of the financial assets can be reliably measured, the financial assets are remeasured at fair value. The difference between the carrying amount and the fair value of such financial assets is recognized in other comprehensive income. Any impairment losses are recognized in profit and loss.

28

ii. Loans and receivables

Loans and receivables (including cash and cash equivalents, trade receivables, notes receivable, other financial assets and other receivables) are measured at amortized cost using the effective interest method, less any impairment, except for short-term receivables when the effect of discounting is immaterial.

Cash equivalents include time deposits and with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets

2018

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments that are measured at FVTOCI, lease receivables, as well as contract assets.

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables, lease receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of such a financial asset.

2017

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence, as a result of one or more events that occurred after the initial recognition of the financial assets, that the estimated future cash flows of the investment have been affected.

For financial assets measured at amortized cost, such as trade receivables, notes receivable and other receivables, such assets are assessed for impairment on a collective basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with defaults on receivables, and other situations.

For a financial asset measured at amortized cost, the amount of the impairment loss recognized

29

is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment (at the date the impairment is reversed) does not exceed what the amortized cost would have been had the impairment not been recognized.

For any available-for-sale equity investments, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

For all other financial assets, objective evidence of impairment could include significant financial difficulty of the issuer or counterparty, breach of contract such as a default or delinquency in interest or principal payments, it becoming probable that the borrower will enter bankruptcy or financial re-organization, or the disappearance of an active market for those financial assets because of financial difficulties.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss in the period.

In respect of available-for-sale equity securities, impairment loss previously recognized in profit or loss is not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment loss is subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

For financial assets that are measured at cost, the amount of the impairment loss is measured as the difference between such an asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of a financial asset is reduced by the impairment loss directly for all financial assets, with the exception of trade receivables, notes receivables and overdue receivables, where the carrying amount is reduced through the use of an allowance account. When trade receivables and other receivables are considered uncollectible, they are written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss except for uncollectible trade receivables, notes receivables and overdue receivables that are written off against the allowance account.

• c) Derecognition of financial assets

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

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profit or loss.

30

• 2) Equity instruments

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

Equity instruments issued by a group entity are recognized at the proceeds received, net of direct issue costs.

The repurchase of the Company’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Company’s own equity instruments.

• 3) Financial liabilities

• a) Subsequent measurement

Except the following situations, all financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities are classified as at FVTPL when such financial liabilities are either held for trading or is designated as at FVTPL.

Financial liabilities held for trading are stated at fair value, with any gain or loss arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any interest or dividends paid on the financial liability.

A financial liability may be designated as at FVTPL upon initial recognition when doing so results in more relevant information and if:

• i. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• ii. The financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and has performance evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• iii. The contract contains one or more embedded derivatives so that the entire combined contract (asset or liability) can be designated as at FVTPL.

For a financial liability designated as at FVTPL, the amount of changes in fair value attributable to changes in the credit risk of the liability is presented in other comprehensive income and will not be subsequently reclassified to profit or loss. The remaining amount of changes in the fair value of that liability is presented in profit or loss. The gain or loss accumulated in other comprehensive income will be transferred to retained earnings when the financial liability is derecognized. If this accounting treatment related to credit risk would create or enlarge an accounting mismatch, all changes in fair value of the liability are presented in profit or loss.

• b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• 4) Convertible bonds

31

The component parts of compound instruments (i.e. convertible bonds) issued by the Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to capital surplus - share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

• 5) Derivative financial instruments

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Before 2018, derivatives embedded in non-derivative host contracts were treated as separate derivatives when they met the definition of a derivative; their risks and characteristics were not closely related to those of the host contracts; and the contracts were not measured at FVTPL. Starting from 2018, derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative; their risks and characteristics are not closely related to those of the host contracts; and the host contracts are not measured at FVTPL.

m. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

n. Revenue recognition

2018

The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

32

For contracts where the period between the date on which the Group transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

Revenue from the sale of goods

Revenue from the sale of goods comes from manufacturing, processing and sales of molds, an parts and plastic molding fixture. Sales of those goods are recognized as revenue when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently. Receipts in advance are recognized as contract liabilities before the goods are shipped

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

2017

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Allowances for sales returns and liabilities for returns are recognized at the time of sale based on the seller’s reliable estimate of future returns and based on past experience and other relevant factors.

• 1) Sale of goods

Revenue from the sale of goods is recognized when all the following conditions are satisfied:

• a) The Group has transferred to the buyer the significant risks and rewards of ownership of the goods;

• b) The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• c) The amount of revenue can be measured reliably;

• d) It is probable that the economic benefits associated with the transaction will flow to the Group; and

• e) The costs incurred or to be incurred in respect of the transaction can be measured reliably.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of risks and rewards of the materials ’ ownership.

• 2) Rendering of services

Service income is recognized when services are provided.

• a) The amount of revenue can be measured reliably;

• b) It is probable that the economic benefits associated with the transaction will flow to the entity;

• c) The stage of completion of the transaction at the end of the reporting period can be measured reliably; and

• d) The costs incurred for the transaction and the costs to complete the transaction can be measured

33

reliably.

The Group recognized the revenue within the scope of recoverable costs, when the results of rendering services cannot be measured reliably; the Group does not recognized the revenue, when the results of rendering services cannot be measured reliably and the cost is likely unrecoverable.

• 3) Dividend and interest income

Dividend income from investments is recognized when a shareholder’s right to receive payment has been established and provided that it is probable that the economic benefits will flow to the Group and that the amount of income can be measured reliably.

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and at the applicable effective interest rate.

• o. Leasing

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

• 1) The Group as lessor

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

• 2) The Group as lessee

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

p. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

• q. Employee benefits

• 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit

34

retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and net interest on the net defined benefit liabilities (assets)) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• 3) Other long-term employee benefits

Other long-term employee benefits are accounted for in the same way as the accounting required for defined benefit plans except that remeasurement is recognized in profit or loss.

• 4) Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefit and when the Group recognizes any related restructuring costs.

• r. Taxation

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

1) Current tax

According to the Income Tax Law, an additional tax at 10% of unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

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

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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

35

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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

• 3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

5. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of less than 3 months) Time deposits Bank acceptances		December 31	December 31
		2018 $ 1,325 1,200,692 31,000 - $ 1,233,017	2017 $ 2,359 1,855,264 31,000 1,228 $ 1,889,851

36

7. FINANCIAL INSTRUMENTS AT FVTPL

Financial assets mandatorily classified as at FVTPL-current Structured deposits (a) Financial liabilities at FVTPL-current Derivative financial liabilities Convertible options (Note 22 on convertible options)		December	31
		2018 $ 85,031 $ -	2017 $ - $ 2,425

• a. The Group entered into a short-term structured time deposit contract with bank in 2018. The structured time deposit contract includes an embedded derivative instrument which is not closely related to the host contract. The contract was designated as at FVTPL under IAS 39. But under IFRS 9, the entire contract is assessed and mandatorily classified as at FVTPL since it contained a host that is an asset within the scope of IFRS 9.

8. FINANCIAL ASSETS AT FVTOCI - 2018

Investments in equity instruments at FVTOCI

	December	December	31,
		2018
Current
Domestic investments
Unlisted shares
Ordinary shares - Halo Neuro Inc.	$		-
Ordinary shares - Toyo Precision Appliance (Kunshan) Co., Ltd.		201,879
	$	201,879
Non-current
Domestic investments
Unlisted shares
Ordinary shares - Kin Tin Optotronic Co., Ltd.	$		-
Foreign investments
Unlisted shares
Ordinary shares - CGK International Co., Ltd.		30,826
Ordinary shares - PT. Fuji Seiki Indonesia		24,116
Ordinary shares - Aetas Technology Inc.			-
	$	54,942

37

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Group’s strategy of holding these investments for long-term purposes. These investments in equity instruments were classified as available-for-sale under IAS 39. Refer to Note 3, Note 10 and Note 11 for information relating to their reclassification and comparative information for 2017.

9. FINANCIAL ASSETS AT AMORTIZED COST - 2018

	December 31,	December 31,
		2018
Current
Domestic investments
Principal guaranteed fund	$	44,753
Bank deposits pledged as collateral		72,464
Less: Allowance for impairment loss		-
	$	117,217

Refer to Note 39 for information relating to bank deposits pledged as collateral.

10. AVAILABLE-FOR-SALE FINANCIAL ASSETS

	December 31,
	2017
Domestic investments
Listed shares and emerging market shares	$ 13,828
Foreign investments
Unlisted shares	5,952
	$ 19,780

11. FINANCIAL ASSETS MEASURED AT COST - NON-CURRENT

	December 31,
	2017
Domestic unlisted ordinary shares	$ 101,398

Management believed the above unlisted equity investments held by the Group had fair values, which cannot be reliably measured, because the range of reasonable fair value estimates was so significant. Therefore, they were measured at cost less impairment at the end of the reporting period.

During 2017, the Group disposed of certain financial assets measured at cost with carrying amounts of $0 thousand and recognized a disposal gain of $1,203 thousand.

38

12. NOTES RECEIVABLE AND TRADE RECEIVABLES

Trade receivables Unrelated parties Less: Allowance for impairment loss Related parties 2018		December 31	December 31
		2018 $ 1,532,074 (17,745) $ 1,514,329 $ 64,626	2017 $ 2,053,836 (21,438) $ 2,032,398 $ 298

In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group’s provision matrix.

December 31, 2018

Gross carrying amount Loss allowance (lifetime ECL) Amortized cost	Not Past Due $ 1,402,810 (3,123) $ 1,399,687	0-30 Days $ 93,279 (3,942) $ 89,337	31-90 Days $ 22,014 (1,940) $ 20,074	91-180 Days O $ 7,459 (2,228) $ 5,231	ver 180 Days $ 6,512 (6,512) $ -	Total $ 1,532,074 (17,745) $ 1,514,329		Overdue Receivables
							O	ver 365 Days $ 19,085 (19,085) $ -

39

The movements of the loss allowance of trade receivables were as follows:

	Trade	Overdue
	Receivables	Receivables
Balance at January 1, 2018 per IAS 39 and IFRS 9	$ 21,438	$ 23,004
Add: Impairment losses recognized	4,751	496
Less: Amounts written off	(4,239)	-
Less: Reclassified to non-current assets held for sale (Note 14)	(3,842)	(3,737)
Foreign exchange losses	(363)	(678)
	$ 17,745	$ 19,085

2017

The average credit period on sales of goods was 90-120 days. No interest was charged on trade receivables. The Group recognized an allowance for impairment loss of 100% against all receivables over 181 days because historical experience had been that receivables that are past due 181 days and beyond were not recoverable. Allowance for impairment loss were recognized against trade receivables based on estimated irrecoverable amounts determined by reference to past default experience with the counterparties and an analysis of their current financial position.

Trade receivables disclosed above included amounts (the aging analysis is shown below) that were past due at the end of the reporting period but for which the Company did not recognized an allowance for impairment loss because there were no significant changes in their credit quality and the amounts were considered recoverable.

The aging analysis of the trade receivables that were impaired was as follows:

	December 31,
	2017
Not overdue	$ 1,841,185
Overdue with aging of 1-30 days	143,612
Overdue with aging of 31-60 days	44,193
Overdue with aging of 61-90 days	7,715
Overdue with aging of 91-180 days	7,331
Overdue with aging of 181 days or more	10,098
	$ 2,054,134

The movements of the allowance of doubtful trade receivables were as follows:

Individually Assessed for Impairment Collectively Assessed for Impairment Balance at January 1, 2017 $ - $ 16,121 Add: Impairment losses recognized on receivables - 5,496 Foreign exchange translation gains and losses - (179) Balance at December 31, 2017 $ - $ 21,438	Total $ 16,121 5,496 (179) $ 21,438

40

The movements of the allowance of doubtful overdue receivable were as follows:

Individually Assessed for Impairment Collectively Assessed for Impairment Balance at January 1, 2017 $ - $ 3,332 Less: Impairment losses reversed - 19,526 Foreign exchange translation gains and losses - 146 Balance at December 31, 2017 $ - $ 23,004	Total $ 3,332 19,526 146 $ 23,004

Overdue receivables were classified under other assets.

13. INVENTORIES

Raw materials Materials Work in progress (including molds) Semifinished products Finished goods		December 31	December 31
		2018 $ 67,382 37,129 235,956 37,805 160,707 $ 538,979	2017 $ 147,175 19,080 279,386 55,395 181,577 $ 682,613

The inventory write-downs recognized as cost of goods sold for the years ended December 31, 2018 and 2017 was $361,348 thousand and $207,248 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2018 and 2017 was $5,516,027 thousand and $5,167,709 thousand, respectively.

The cost of goods sold includes the amounts of written-off the inventory and recognized as expenses were as follows:

Inventory write-downs Unallocated production overhead	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 172,319 380,021 $ 552,340	2017 $ 30,340 383,256 $ 413,596

14. NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE

• a. Discontinued operations

On July 19, 2018, the board of directors of the Group resolved to dispose of 100% of the shares of Shanghai Teckyork Enterprise Co., Ltd. and Shanghai Sonor Enterprise Co., Ltd. to stop the production of plastic products.

The above transaction was in compliance with the requirements of “non-current assets held for sale and discontinued operations” under IFRS 5, and the disposed assets are classified as non-current assets for

41

sale. In addition, the non-current assets for sale meets the definition of discontinued operation and is therefore expressed as discontinued operation. In order to match the expression of discontinued operation in the consolidated income statements for the year ended December 31, 2018, the Group reclassified the profit and loss item of the discontinued operation for the year ended December 31, 2017, so as to make the information in the income statements of the years ended December 31, 2018 and 2017 more relevant.

Profit (loss) from discontinued operations was as follows:

Net loss for the year Reversals of impairment losses on changes in fair value less costs to sell Income tax expense	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (182,004) - (4) $ (182,008)	2017 $ (22,093) - 472 $ (21,621)

The details of profit (loss) from discontinued operations and the related cash flow information were as follows:

Operating revenue Operating costs Gross profit Selling and marketing expenses General and administrative expenses Expected credit loss Profit from operations Other operating income and expenses Other income Other gains and losses Finance costs Profit (loss) before tax Income tax expense Net profit (loss) for the year Profit (loss) from discontinued operations attributable to: Owners of the Company Non-controlling interests Net cash used in operating activities Net cash generated from investing activities Net cash generated from (used in) financing activities Net cash inflows (outflows)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 221,769 (284,468) (62,699) (6,722) (166,690) (2,938) (239,049) 59,018 737 (2,708) (2) (182,004) (4) $ (182,008) $ (182,008) - $ (182,008) $ (14,667) 61,761 295 $ 47,389	2017 $ 537,402 (507,752) 29,650 (10,869) (53,575) - (34,794) 18,900 679 (6,878) - (22,093) 472 $ (21,621) $ (21,621) - $ (21,621) $ (9,039) 184 (161,090) $ (169,945)

42

b. Non-current assets held for sale

	December 31,	December 31,
		2018
Non-current assets held for sale	$	538,154
Liabilities directly associated with non-current assets classified as held for sale	$	58,529

The board of directors of the Company resolved to dispose of the entire shareholding of Shanghai Teckyork Enterprise Co., Ltd. and Shanghai Sonor Enterprise Co., Ltd. on July 19, 2018, and has been actively seeking buyers. The disposal procedures are expected to be completed within 12 months. The non-current assets for sale that have been reclassified are separately stated in the consolidated balance sheet. The main categories of assets and liabilities under the non-current assets for sale are as follows:

	December 31,	December 31,
		2018
Cash and cash equivalents	$	191,677
Financial assets at FVTPL - current		31,327
Financial assets at amortized cost - current		12,842
Trade receivables		32,504
Other receivables		3,625
Inventory		4,810
Prepayments		5,203
Property, plant and equipment		243,106
Prepayments for equipment		112
Long-term prepayments for leases		12,679
Other non-current assets		269
Non-current assets classified as held for sale	$	538,154
Trade and other payables	$	51,316
Contract liabilities		1,268
Other current liabilities		559
Other non-current liabilities		5,386
Liabilities directly associated with non-current assets classified as held for sale	$	58,529

The net proceeds of disposal are expected to exceed the carrying amount of related net assets, and accordingly, no impairment was recognized while reclassifying the assets and liabilities attributable to the production line to non-current assets held for sale.

On November 14, 2018, the board of directors of the Company resolved to dispose of Teckyork Enterprise Co., Ltd. However, the Company did not reclassify Teckyork Enterprise Co., Ltd. as non-current assets for sale because it did not meet the condition for immediate sale.

On November 14, 2018, the board of directors of the Group resolved to dispose of Teckyork Enterprise Co., Ltd. However, as Teckyork Enterprise Co., Ltd. does not meet the condition for immediate sale, it is not intended to reclassify Teckyork Enterprise Co., Ltd. as non-current assets for sale.

43

15. SUBSIDIARY

a. Subsidiary included in consolidated financial statements

Investor Investee Main Business Coxon Precise Industrial Co., Ltd. Coxon Industry Ltd. Global investing activities Coxon Industrial Ltd. Dong Guan Chensong Plastic Co., Ltd. Manufacturing and sale of nonmetal molding and automobile part Coxon Precise Industrial Co., Ltd. Sun Can International Ltd. Global investing activities Sun Can International Ltd. Sinxon Plastic (Dong Guan) Ltd. Manufacturing and sale of nonmetal molding and automobile part Coxon Precise Industrial Co., Ltd. Teckyork Enterprise Co., Ltd. Global investing activities Teckyork Enterprise Co., Ltd. Shanghai Teckyork Enterprise Co., Ltd. Manufacturing and sale of nonmetal molding, precision plastic injection parts and optical lens Shanghai Sonor Enterprise Co., Ltd. Manufacturing and sale of nonmetal molding, precision plastic injection parts, related semi-finished goods and components Vastech Industrial Co., Ltd. Global investing activities Vastech Industrial Co., Ltd. Vastech Plastic (Shanghai) Industrial Co., Ltd. Manufacturing and sale of nonmetal molding, precision plastic injection parts and optical lens Teckyork Enterprise Co., Ltd. Changshu Huaxon Industry Co., Ltd. Leasehold estate Coxon Precise Industrial Co., Ltd. Cheng Yee Enterprise Ltd. Global investing activities Cheng Yee Enterprise Ltd. Coxon Precise International Ltd. Global investing activities Hang Yuan Enterprise Ltd. Global investing activities Hang Yuan Enterprise Ltd. Coxon Industry (Changshu) Co., Ltd. Manufacturing and sale of nonmetal molding, precision plastic injection parts, related semi-finished goods and components Cheng Yee Enterprise Ltd. Coxon Medical Limited Global investing activities Coxon Medical Limited Shanghai Coxon Medical Limited Manufacturing of medical materials Coxon Precise Industrial Co., Ltd. Cheng Da Industry Ltd. Global investing activities Cheng Da Industry Ltd. Dong Guan Cheng Da Metal Product Company Limited Manufacturing optical instrument, electronic products and plastic products Coxon Precise Industrial Co., Ltd. Soartek Optoelectronics Technology Co., Ltd. Manufacturing of optical instrument and electronic components Soartek Optoelectronics Technology Co., Ltd. Hsiangtek Optical Technology Co., Ltd. Global investing activities Coxon Precise Industrial Co., Ltd. Plenty Link Technology Co., Ltd. Global investing activities Plenty Link Technology Co., Ltd. Dongguan Shuang-Ying Photoelectric Technology Co., Ltd. Manufacturing of optical instrument and electronic components Plenty Link Technology Co., Ltd. Shuang-Ying Science and Technology, Ltd. Manufacturing of optical instrument and electronic components	% of Ownership
	December 31
	2018 2017 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - 100 - 100 100 100 100 100 100 100 100 100 100 100 80 80 100 100 100 100 100 100 100 100 - 100 65 65 100 100 100 100

• a. On December 25, 2015, board of directors of Vastech Plastic (Shanghai) Industrial Co., Ltd. resolved to end its operation and completed the liquidation on April 19, 2018. On March 19, 2018, the board of directors of Vastech Industrial Co., Ltd. resolved to end its operation and completed the liquidation on June 21, 2018. On March 19, 2018, the board of directors of Hsiangtek Optical Technology Co., Ltd. resolved to end its operation and completed the liquidation on May 28, 2018. For a description of the liquidation of these subsidiaries of the Group, refer to Note 32.

• b. Subsidiary not included in consolidated financial statements: None

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Associates

Material associates Toyo Precision Appliance (Kunshan) Co., Ltd. Associates that are not individually material Changshu Houkennixx Plastic Product Co., Ltd. Guangdong Tonly Precision Structure Co., Ltd. Siix Coxon Precision Phils., Inc.		December 31	December 31
		2018 $ - - 20,005 9,209 $ 29,214	2017 $ 277,986 32,922 - 13,225 $ 324,133

44

As at the end of the reporting period, the proportion of ownership and voting rights in associates held by the Group were as follows:

Name of Associate Toyo Precision Appliance (Kunshan) Co., Ltd. Changshu Houkennixx Plastic Product Co., Ltd. Guangdong Tonly Precision Structure Co., Ltd. Siix Coxon Precision Phils., Inc.	December 31
	2018 2017 - 30% - 25% 30% - 45% 45%

Refer to Table 5 “Information on Investees” and Table 6 “Information on Investments in Mainland China” for the nature of activities, principal places of business and countries of incorporation of the associates.

In 2017, the Group held 30% interest in Toyo Precision Appliance (Kunshan) Co., Ltd. and accounted for the investment as an associate. In October 2018, the Group sold 15% of its interest in Toyo Precision Appliance (Kunshan) Co., Ltd. to a third party for proceeds of $126,626 thousand and, thus, ceased to have significant influence. The Group retained the remaining 15% interest as financial assets at FVTOCI whose fair value at the date of disposal was $131,235 thousand. This transaction resulted in the recognition of a gain in profit or loss, which is calculated as follows:

Proceeds of disposal Less: Carrying amount of investment on the date of loss of significant influence Plus/less: Share of other comprehensive income of the associate Gain (loss) recognized	$ 126,626 (128,817) 89,543 $ 87,352

The summarized financial information in respect of the Group’s associates is set out below:

Total assets Total liabilities Revenue Profit (loss) for the year		December 31	December 31
	2018 2017 $ 408,312 $ 2,872,090 $ 321,164 $ 1,784,391 For the Year Ended December 31
		2018 $ 325,960 $ (13,756)	2017 $ 3,729,914 $ 25,368

Investments accounted for using the equity method as well as share of profit or loss and other comprehensive gains and losses of the Group, except Guangdong Tonly Precision Structure Co., Ltd. and Siix Coxon Precision Phils., Inc. in 2018, were calculated based on the financial reports not audited by the auditor; in 2017, they were calculated based on the financial reports audited by the auditor. However, management of the Company believes that the 2018 annual financial reports of the above subsidiaries will not be subject to major adjustments if they were verified by the auditor.

45

17. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2017 Additions Disposals Reclassification Effect of exchange rate changes Balance at December 31, 2017 Accumulated depreciation and impairment Balance at January 1, 2017 Depreciation expense Impairment losses recognized in profit or loss Disposals Effect of exchange rate changes Balance at December 31, 2017 Carry amounts value at December 31, 2017 Cost Balance at January 1, 2018 Additions Disposals Reclassification Reclassified as held for sale Effect of exchange rate changes Balance at December 31, 2018 Accumulated depreciation and impairment Balance at January 1, 2018 Depreciation expense Impairment losses Disposals Reclassification Reclassified as held for sale Effect of exchange rate changes Balance at December 31, 2018 Carry amounts value at December 31, 2018	Freehold Land $ 79,244 - - - - $ 79,244 $ 18,812 - - - - $ 18,812 $ 60,432 $ 79,244 - - - - - $ 79,244 $ 18,812 - - - - - - $ 18,812 $ 60,432	Buildings $ 1,835,801 - - - (43,546) $ 1,792,255 $ 745,236 80,581 - - (17,988) $ 807,829 $ 984,426 $ 1,792,255 14,524 (36,913 ) - (549,158 ) (22,351) $ 1,198,357 $ 807,829 80,380 - (23,106 ) - (318,968 ) (9,507) $ 536,628 $ 661,729	Machinery $ 4,312,892 129,540 (214,727 ) 232,481 (115,199) $ 4,344,987 $ 2,526,120 499,192 3,464 (152,540 ) 36,009 $ 2,912,245 $ 1,432,742 $ 4,344,987 68,301 (715,636 ) 21,681 - (55,615) $ 3,663,718 $ 2,912,245 408,939 103,355 (633,996 ) - - (47,213) $ 2,743,330 $ 920,388	Transportation Equipment $ 54,310 1,821 (749 ) - (706) $ 54,676 $ 36,430 4,083 100 (729 ) (470) $ 39,414 $ 15,262 $ 54,676 589 (8,033 ) - (6,251 ) 117 $ 41,098 $ 39,414 4,247 102 (7,552 ) - (3,412 ) 245 $ 33,044 $ 8,054	Office Equipment $ 71,457 4,272 (2,789 ) - (1,404) $ 71,536 $ 62,897 3,331 3 (2,773 ) (1,233) $ 62,225 $ 9,311 $ 71,536 286 (5,494 ) - (13,094 ) (265) $ 52,969 $ 62,225 3,102 41 (5,152 ) - (12,533 ) (225) $ 47,458 $ 5,511	Leasehold Improvement $ 580,695 14,945 - 18,679 (29,427) $ 584,892 $ 294,086 30,398 176 - (12,017) $ 312,643 $ 272,249 $ 584,892 11,464 (15,702 ) 23,897 - 4,335 $ 608,886 $ 312,643 33,790 39,110 (8,709 ) - - 1,366 $ 378,200 $ 230,686	Other Equipment $ 536,900 30,479 (7,514 ) 25,935 (10,914) $ 574,886 $ 287,294 102,622 3,726 (5,440 ) (5,038) $ 383,164 $ 191,722 $ 574,886 19,775 (73,810 ) 32,853 (13 ) (7,585) $ 546,106 $ 383,164 100,728 29,395 (71,651 ) - (1 ) (5,809) $ 435,826 $ 110,280	Construction in Progress $ 13,094 17,770 - (11,169 ) (194) $ 19,501 $ - - - - - $ - $ 19,501 $ 19,501 17,747 - (5,661 ) (9,504 ) (563) $ 21,520 $ - - - - - - - $ - $ 21,520	Total $ 7,484,393 198,827 (225,779 ) 265,926 (201,390) $ 7,521,977 $ 3,970,875 720,207 7,469 (161,482 ) (737) $ 4,536,332 $ 2,985,645 $ 7,521,977 132,686 (855,588 ) 72,770 (578,020 ) (81,927) $ 6,211,898 $ 4,536,332 631,186 172,003 (750,166 ) - (334,914 ) (61,143) $ 4,193,298 $ 2,018,600

Due to the poor sales of plastic component products of the Group in the South China area, the Group expects that the future economic benefits of the equipment used to produce such products in the South China area will be reduced, and the recoverable amount will be less than the carrying amount. Therefore, as of December 31, 2018 and 2017 the impairment losses of $172,003 thousand and $7,469 thousand were recognized, respectively. The impairment losses have been included in other benefits and losses of the consolidated income statements.

The Group recognized the recoverable amount of the machine and equipment based on the fair value less the disposal cost. The relevant fair value is measured using the market method; the main assumption of fair value includes the estimated sale value, which is level 2 of fair value measurement.

The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful life of the asset:

Building Main buildings 10-50 years Engineering systems 5-20 years Machinery 1-10 years Transportation equipment 1-10 years Office equipment 1-10 years Leasehold improvement 2-20 years Other equipment 2-20 years

Refer to Note 39 for the carrying amount of property, plant and equipment pledged by the group to secure borrowings/general banking facilities granted to the Group.

The above-mentioned non-current assets for sale are measured at the lower of the carrying amount and the fair value less the disposal cost, and are reclassified as non-current assets for sale. Please refer to Note 14.

46

18. INTANGIBLE ASSETS

Cost Balance at January 1, 2017 Additions Effect of exchange rate changes Balance at December 31, 2017 Accumulated amortization Balance at January 1, 2017 Amortization expense Effect of exchange rate changes Balance at December 31, 2017 Carrying amounts at December 31, 2017 Cost Balance at January 1, 2018 Additions Disposals Reclassified as held for sale Effect of exchange rate changes Balance at December 31, 2018 Accumulated amortization Balance at January 1, 2018 Amortization expense Disposals Reclassified as held for sale Effect of exchange rate changes Balance at December 31, 2018 Carrying amounts at December 31, 2018

Computer Software $ 134,254 12,162 (4,762) $ 141,654 $ 83,510 17,643 (2,853) $ 98,300 $ 43,354 $ 141,654 8,328 (3,520) (4,316) 328 $ 142,474 $ 98,300 18,386 (3,520) (4,316) 349 $ 109,199 $ 33,275

The above items of other intangible assets are amortized on a straight-line basis at the following rates per annum: Computer software 1-10 years

47

19. LONG-TERM REPAYMENTS FOR LEASE OBLIGATIONS

Land use right Current (prepayments) Non-current		December	31
		2018 $ 913 34,607 $ 35,520	2017 $ 1,961 50,084 $ 52,045

Long-term prepaid lease payments include land use rights which are for land located in mainland China.

Refer to note 14 for the long-term prepayments for lease obligations of Shanghai Teckyork Enterprise Co., Ltd. reclassified to non-current assets held for sale.

Refer to Note 39 for the land use rights which are for land located in mainland China pledged by the Group to secure borrowings/general banking facilities which were granted to the Group.

20. OTHER FINANCIAL ASSETS

Current Other financial assets - current Time deposits with original maturities of more than 3 months Principal guaranteed fund Time deposits pledged Other current assets Non-current Prepayments for investments Refundable deposits Overdue receivable Less: Allowance for impairment loss		December 31	December 31
		2018 $ - - - $ - $ 36,563 $ 30,000 $ 14,915 19,085 (19,085) $ 14,915	2017 $ 109,308 391,687 177,949 $ 678,944 $ 5,852 $ - $ 7,877 23,004 (23,004) $ 7,877

The Group is a leader in environment-friendly materials and has a control on key material sources. The Group had plans to invest in Simpla Biotech Co., Ltd., and as of December 31, 2018, the Group invested $30,000 thousand which is recognized as prepaid investment funds.

48

21. BORROWINGS

Long-term Borrowings

Secured borrowings (Note 34) Bank loans Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2017; loan period from November 6, 2017 to November 6, 2019. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time. Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2018; loan period from November 6, 2018 to November 6, 2020. Principal lump-sum payment at maturity and interest payment monthly. Unsecured borrowings Bank loans Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2018; loan period from November 6, 2018 to November 6, 2020. Principal lump-sum payment at maturity and interest payment monthly. Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2017; loan period from November 6, 2017 to November 6, 2019. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time. Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2017; loan period from April 5, 2016 to April 5, 2018. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time. Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2017; loan period from July 24, 2017 to July 25, 2019. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time.

December 31

2018 2017 $ - $ 53,000 53,000 - 247,000 - - 247,000 - 100,000 - 100,000 (Continued)

49

Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2018; loan period from August 15, 2018 to August 15, 2020. Principal lump-sum payment at maturity and interest payment monthly. Hua Nan Bank Medium-term working capital loan with a credit line of $800,000 thousand and interest rate of 1.35% for the year ended December 31, 2017; loan period from August 15, 2017 to August 15, 2019. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time. China Trust Bank Medium-term working capital loan with a credit line of $700,000 thousand and interest rate of 1.31% for the year ended December 31, 2017; loan period from October 20, 2016 to October 20, 2018. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time. China Trust Bank Medium-term working capital loan with a credit line of $700,000 thousand and interest rate of 1.56% for the year ended December 31, 2017; loan period from April 10, 2017 to April 10, 2019. Principal lump-sum payment at maturity and interest payment monthly. The Group paid it off ahead of time. China Trust Bank Medium-term working capital loan with a credit line of $700,000 thousand and interest rate of 1.56% for the year ended December 31, 2018; loan period from January 12, 2018 to January 10, 2020. Principal lump-sum payment at maturity and interest payment monthly. Shanghai Commercial Savings Bank Medium-term working capital loan with a credit line of $300,000 thousand and interest rate of 1.62% for the years ended December 31, 2018 and 2017; loan period from July 25, 2016 to July 25, 2019. Principal and interest payment monthly. A grace period of two years is given. Shanghai Commercial Savings Bank Medium-term working capital loan with a credit line of $300,000 thousand and interest rate of 1.37% for the year ended December 31, 2017; loan period from July 25, 2016 to July 15, 2019. Principal and interest payment monthly. A grace period of two years is given. Shanghai Commercial Savings Bank Medium-term working capital loan with a credit line of $300,000 thousand and interest rate of 1.37% for the years ended December 31, 2018 and 2017; loan period from December 2, 2015 to November 15, 2018. Principal and interest payment monthly. A grace period of one year is given.

December 31

2018 2017 $ 100,000 $ - - 100,000 - 550,000 - 150,000 400,000 - 91,667 150,000 - 100,000 - 45,834 (Continued)

50

Taiwan Cooperative Bank Medium-term working capital loan with a credit line of $350,000 thousand and interest rate of 1.50% for the year ended December 31, 2017; loan period from December 8, 2016 to December 8, 2019. From December 8, 2016 to December 8, 2018, interest payment monthly. From December 8, 2018 to December 8, 2019, principal and interest payment monthly. Taiwan Cooperative Bank Medium-term working capital loan with a credit line of $350,000 thousand and interest rate of 1.50% for the year ended December 31, 2018 and 2017; loan period from May 12, 2017 to December 8, 2019. From May 12, 2017 to December 7, 2018, interest payment monthly. From December 8, 2018 to December 8, 2019, principal and interest payment monthly. E.Sun Bank Medium-term working capital loan with a credit line of $200,000 thousand and interest rate of 1.65% for the year ended December 31, 2017; loan period from May 12, 2017 to May 12, 2020. Repayable in four quarterly installments and interest payment monthly. A grace period of two years is given. The Group paid it off ahead of time. Less: Current portion BONDS PAYABLE Unsecured domestic bonds Less: Discount on unsecured convertible bonds Less: Current portion		December 31	December 31	December 31
		2018 2017 $ - $ 50,000 100,000 150,000 - 100,000 991,667 1,895,834 (191,667) (695,834) $ 800,000 $ 1,200,000 (Concluded) December 31
			2018 $ - - - $ -	2017 $ 105,900 (5,200) (100,700) $ -

22. BONDS PAYABLE

Second Issue of Unsecured Domestic Convertible Bonds

• a. The conversion price is initially $71 per ordinary share, and the conversion period is from July 30, 2015 to June 29, 2020. The conversion price will be adjusted upon the occurrence of a change in the number of ordinary shares, and the conversion price is $56.72 per ordinary share as of December 31, 2017.

• b. Each bondholder has the right to put the convertible bonds at 101% of par value or 101.51% of par value before 30 days on and after the 2nd and 3rd year anniversary, respectively.

51

• c. The Group could redeem the convertible bonds at par value at any time during the period from 31 days after the original issue date to 40 days before the maturity date, under the following conditions: The closing price of the ordinary shares on each of the 30 consecutive trading days reaches or exceeds 30% of the conversion price, or the outstanding balance of the bonds is less than 10% of that from the original issuance.

The convertible bonds contain both liability and convertible options. The effective interest rate of the liability component was 2.058% per annum on initial recognition. The convertible options were recognized in financial assets or liabilities at FVTPL.

The convertible bonds contain both liability and equity components. The equity component was presented form the original issue date to December 31, 2017 under the following conditions:

				Amounts	Amounts
Proceeds from issue, June 29, 2015 (less transaction costs $5,000 thousand)				$	795,000
Equity component					(63,520)
Derivative component - redeemable put option					(8,960)
Liability component at the date of issue (less transaction costs allocated		to the
liability component of $5,000 thousand)					722,520
Interest charged at an effective interest rate of 2.058%					77,480
Repayment of bonds					(800,000)
Interest paid					-
Liability component at December 31, 2018				$	-
				The	Conversion
	The		Host		Option
	Liability			Derivative
	Instrument			Instrument
Balance at January 1, 2017	$	745,238		$	(33,760)
Interest expense			8,731		-
Fair value changes gain (loss)			-		(3,648)
Payments for buy-back of bonds		(653,269)			34,983
Balance at December 31, 2017	$	100,700		$	(2,425)
Balance at January 1, 2018	$	100,700		$	(2,425)
Interest expense			1,041		-
Fair value changes gain (loss)			-		(1,017)
Repayment of bonds		(101,741)			3,442
Balance at December 31, 2018	$		-	$	-

52

23. NOTES PAYABLE AND TRADE PAYABLES

Notes payable to unrelated parties Operating Non-operating Trade payables-operating Unrelated parties		December 31	December 31
		2018 $ 258 - $ 258 $ 1,023,231	2017 $ 327 157 $ 484 $ 969,939

Trade payables were paid according to the condition of contract or billings from the suppliers. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

24. OTHER LIABILITIES

Current Other payables Salaries or bonuses Payable for processing fees Others Other liabilities Others Non-current Guarantee deposits Others		December 31	December 31
		2018 $ 139,313 135,265 299,424 $ 574,002 $ 1,956 $ 9,117 1,342 $ 10,459	2017 $ 204,066 148,456 422,908 $ 775,430 $ 11,498 $ 7,566 - $ 7,566

53

25. PROVISIONS

Employee benefits		December	31
		2018 $ 16,851	2017 $ 16,261

The provision for employee benefits represents annual leave taken by employees.

26. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company of the Group adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, a group makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plans adopted by the Company of the Group in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Group has no right to influence the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Deficit Net defined benefit liabilities		December	31
		2018 $ 79,187 (37,015) 42,172 $ 42,172	2017 $ 77,572 (36,867) 40,705 $ 40,705

54

Movements in net defined benefit liabilities were as follows:

	Present Value of		Net Defined
	the Defined		Benefit
	Benefit	Fair Value of	Liabilities
	Obligation	the Plan Assets	(Assets)
Balance at January 1, 2017	$ 68,007	$ (35,297)	$ 32,710
Current service cost	811	-	811
Net interest expense (income)	595	(314)	281
Recognized in profit or loss	1,406	(314)	1,092
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(34)	(34)
Actuarial gain - changes in financial
assumptions	(1,711)	-	(1,711)
Actuarial loss - changes in demographic
assumptions	2,948	-	2,948
Actuarial loss - experience adjustments	6,922	-	6,922
Recognized in other comprehensive income	8,159	(34)	8,125
Contributions from the employer	-	(1,222)	(1,222)
Benefits paid	-	-	-
Balance at December 31, 2017	$ 77,572	$ (36,867)	$ 40,705
Balance at January 1, 2018	$ 77,572	$ (36,867)	$ 40,705
Current service cost	866	-	866
Net interest expense (income)	873	(421)	452
Recognized in profit or loss	1,739	(421)	1,318
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(1,049)	(1,049)
Actuarial loss - changes in financial
assumptions	885	-	885
Actuarial loss - changes in demographic
assumptions	4,204	-	4,204
Actuarial loss - experience adjustments	(2,705)	-	(2,705)
Recognized in other comprehensive income	2,384	(1,049)	1,335
Contributions from the employer	-	(1,186)	(1,186)
Benefits paid	(2,508)	2,508	-
Balance at December 31, 2018	$ 79,187	$ (37,015)	$ 42,172

Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic/and foreign/equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the (government/corporate) bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

55

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

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase	December 31
	2018 2017 1.000% 1.125% 2.000% 2.000%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would decrease/increase as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		December	31
		2018 $ (1,928) $ 2,002 $ 1,947 $ (1,885)	2017 $ (1,762) $ 1,826 $ 1,777 $ (1,723)

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

Expected contributions to the plans for the next year Average duration of the defined benefit obligation		December	31
		2018 $ 1,117 9.9 years	2017 $ 1,318 9.2 years

27. EQUITY

a. Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2018 150,000 $ 1,500,000 121,662 $ 1,216,622	2017 150,000 $ 1,500,000 121,662 $ 1,216,622

Fully paid ordinary shares, which have a par value of $10, carry one vote and one dividend per share.

There were 12,000 thousand shares of the Company’s shares authorized which were reserved for the issuance of employee share options.

56

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Issuance of ordinary shares Conversion of bonds Conversion of employee share options May be used to offset a deficit only Share of changes in capital surplus of associates May not be used for any purpose Employee share options - issuance of ordinary shares Employee share options From share options of convertible bonds Invalidation of employee share options		December 31	December 31
		2018 $ 1,838,650 496,427 133,054 68,616 6,300 58,124 - 48,414 $ 2,649,585	2017 $ 1,935,980 496,427 133,054 68,616 6,300 58,124 8,408 42,322 $ 2,749,231

Note: Such capital surplus may be used to offset a deficit; in addition when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).

c. Retained earnings and dividends policy

In accordance with the amendments to the Company Act in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. The shareholders held their regular meeting on June 6, 2016 and, in that meeting, resolved amendments to the Company’s Articles of Incorporation (the “Articles”), particularly the amendment to the policy on dividend distribution and the addition of the policy on the distribution of employees’ compensation.

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to “employees’ compensation and remuneration of directors and supervisors” in Note 29-f.

To ensure that the Company has funds for its present and future expansion plans, the Company prefers to distribute mixed share dividends and cash dividends as shareholders’ bonus among which share dividend is distributed from 0% to 50% and cash dividends from 100% to 50%. The distribution policy would be adjusted depending on the operating conditions, industry developments, capital requirement and so forth.

57

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from special reserve by the Company.

Except for non-ROC resident shareholders, all shareholders receiving the dividends are allowed a tax credit equal to their proportionate share of the income tax paid by the Company.

The appropriations of earnings for 2017 and 2016 approved in the shareholders’ meetings on June 11, 2018 and June 2, 2017, respectively, were as follows:

Reversal of special reserve	Appropriation of Earnings For 2017 For 2016 $ 193,006 $ 28,722	Dividends Per Share (NT$)
		For 2017 For 2016 $ - $ -

The Company’s shareholders also resolved to issue cash dividends from capital surplus of $97,300 thousand, in the shareholders’ meeting on June 11, 2018.

The appropriation of earnings for 2018 was proposed by the Company’s board of directors on March 14, 2019. The appropriations and dividends per share were as follows:

	Appropriation	Dividends Per	Dividends Per
	of Earnings	Share	(NT$)
Legal reserve	$ 132,524	$	-

The appropriation of earnings for 2018 are subject to resolution in the shareholders’ meeting to be held on June 6, 2019.

• d. Special reserves

Beginning at January 1 Appropriation in respect of: Debit to other equity items Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 28,722 193,006 $ 221,728	2017 $ - 28,722 $ 28,722

58

e. Other equity items

• 1) Exchange differences on translating foreign operations

		For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018		2017
	Balance at January 1	$ (232,334)	$	(41,653)
	Effect of change in tax rate	8,393		-
	Recognized for the year
	Exchange differences on translating foreign operations	(158,273)		(229,738)
	Income tax related to gains on translating foreign
	operations	31,680		39,057
	Balance at December 31	$ (350,534)	$	(232,334)
2)	Unrealized gain (loss) on available-for-sale financial assets
	Balance at January 1, 2017		$	12,931
	Unrealized (loss) gain on revaluation of available-for-sale financial assets			(2,325)
	Balance at December 31, 2017		$	10,606
	Balance at January 1, 2018 per IAS 39		$	10,606
	Adjustment on initial application of IFRS 9			(10,606)
	Balance at January 1, 2018 per IFRS 9		$	-
3)	Unrealized gain (loss) on financial assets at FVTOCI
			For the Year
				Ended
			December 31,
				2018
	Balance at January 1 per IAS 39		$	-
	Adjustment on initial application of IFRS 9			(5,083)
	Balance at January 1 per IFRS 9			(5,083)
	Recognized for the year
	Unrealized gain (loss) - equity instruments			24,561
	Cumulative unrealized gain (loss) of equity instruments transferred to retained
	earnings due to disposal			(23,196)
	Balance at December 31		$	(3,718)

59

f. Non-controlling interests

Balance at January 1 Attributable to non-controlling interests: Share of loss for the year Exchange differences on translating foreign operations Changes in equity of subsidiaries Non-controlling interest increases Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 173,952 (52,556) (1,321) - (15,960) $ 104,115	2017 $ 149,671 (36,195) (2,945) 7,945 55,476 $ 173,952

• g. Treasury shares

	Shares
	Cancelled
	(In Thousands
Purpose of Buy-Back	of Shares)
Number of shares at January 1, 2017	2,547
Increase during the year	942
Decrease during the year	(3,489)
Number of shares at December 31, 2017	-

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuance for cash and to vote.

28. REVENUE

Revenue from contracts with customers Plastic components Molds Others Less: Discontinued operations Contact Balances Trade receivables Trade receivables from related parties Contract liabilities Receipts in advance	For the Year Ended December 31	For the Year Ended December 31
		2018 2017 $ 5,232,910 $ 5,252,119 140,779 527,595 348,060 244,378 (221,769) (537,402) $ 5,499,980 $ 5,486,690 December 31, 2018 $ 1,514,329 $ 64,626 $ 44,254

60

For contract revenue from clients for the year ended December 31, 2018, a contract liability of $12,419 thousand was reclassified as revenue.

29. NET PROFIT FROM CONTINUING OPERATIONS

Net profit from continuing operations contains the following items:

• a. Other revenue and expenses

Lease revenue Lease costs Technical service income Other revenue Gain on disposal of property plant and equipment Loss on disposal of property plant and equipment Less: Discontinued operations (Note 14)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 27,312 (5,739) 12,832 - 63,800 (5,081) (59,018) $ 34,106	2017 $ 26,401 (11,569) 12,670 2,292 6,856 (3,598) (18,900) $ 14,152

• b. Other income

Interest income Dividends Less: Discontinued operations (Note 14)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 9,013 184 (737) $ 8,460	2017 $ 10,285 178 (679) $ 9,784

c. Other gains and losses

Gain on disposal of investments Miscellaneous income Net foreign exchange gains or losses Fair value changes of financial assets mandatorily classified as at FVTPL Loss on impairment Other expenses Less: Discontinued operations (Note 14)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 125,067 68,643 14,662 8,319 (172,003) (40,629) 2,709 $ 6,768	2017 $ 17,542 44,423 (107,586) (3,648) (7,469) (6,500) 6,878 $ (56,360)

61

d. Finance costs

Interest on bank loans Interest on convertible bonds Other finance costs Less: Discontinued operations (Note 14)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 28,052 1,041 3,848 (2) $ 32,939	2017 $ 26,594 8,731 1,564 - $ 36,889

e. Depreciation and amortization

Property, plant and equipment Less: Discontinued operations (Note 14) Intangible assets Less: Discontinued operations (Note 14) An analysis of depreciation by function Operating costs Less: Discontinued operations (Note 14) Operating expenses Less: Discontinued operations (Note 14) An analysis of amortization by function Operating costs Less: Discontinued operations (Note 14) Operating expenses Less: Discontinued operations (Note 14)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 625,447 (28,558) $ 596,889 $ 18,386 (1,998) $ 16,388 $ 515,397 (12,521) $ 502,876 $ 110,050 (16,037) $ 94,013 $ 2,354 - $ 2,354 $ 16,032 (1,998) $ 14,034	2017 $ 708,638 (31,177) $ 677,461 $ 17,643 (705) $ 16,938 $ 609,919 (23,431) $ 586,488 $ 98,719 (7,746) $ 90,973 $ 1,337 (148) $ 1,189 $ 16,306 (557) $ 15,749

The Group entered into lease agreements on some assets. The related depreciation expenses that were listed in other income and expenses were $5,739 thousand in 2018 and $11,569 thousand in 2017.

62

f. Employee benefits expense

Short-term benefits Post-employment benefits Defined contribution plans Defined benefit plans Less: Discontinued operations An analysis of employee benefits expense by function Operating costs Less: Discontinued operations Operating expenses Less: Discontinued operations	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 1,570,510 7,333 1,318 (162,534) $ 1,416,627 $ 1,183,549 (71,464) $ 1,112,085 $ 395,612 (91,070) $ 304,542	2017 $ 1,820,220 9,682 1,092 (203,252) $ 1,627,742 $ 1,460,060 (182,578) $ 1,277,482 $ 370,934 (20,674) $ 350,260

• g. Employees’ compensation and remuneration of directors and supervisors

The Company accrued employees’ compensation and remuneration of directors and supervisors at the rates of between 3% and 12% and no higher than 3%, respectively, of net profit before income tax, employees’ compensation and remuneration of directors and supervisors.

If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the actual amounts of employees’ compensation and remuneration of directors and supervisors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2017.

Information on the employees’ compensation and remuneration of directors and supervisors resolved by the Company’s board of directors in 2018 and 2017 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

63

30. INCOME TAXES RELATING TO CONTINUING OPERATIONS

• a. Major components of tax expense (benefit) recognized in profit or loss

The major components of tax expense (benefit) were as follows:

Current tax In respect of the current year Adjustments for prior years’ tax Deferred tax In respect of the current year Adjustments to deferred tax attributable to changes in tax rates and laws Less: Discontinued operations Income tax (benefit) expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 21,382 7,585 (44,624) 19,395 (4) $ 3,734	2017 $ 64,795 (1,437) (158,192) - 472 $ (94,362)

A reconciliation of accounting income and current income tax (benefit) expense is as follows:

Loss before income tax Income tax (benefit) expense at the statutory rate Tax effect of adjusting items: Nondeductible expenses and losses Tax-exempt income Unrecognized loss carryforwards/deductible temporary differences Adjustments to deferred tax attributable to changes in tax rates and laws Adjustments for prior years’ tax Income tax (benefit) expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (704,800) $ (431,300) 2,309 (128) 405,873 19,395 7,585 $ 3,734	2017 $ (504,746) $ (308,259) 534 (3,539) 218,339 - (1,437) $ (94,362)

The applicable corporate income tax rate used by Group in the ROC is 17%, while the applicable tax rate used by subsidiaries in China is 25%.

In February 2018, it was announced that the Income Tax Act in the ROC was amended, and starting from 2018, the corporate income tax rate will be adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to 2018 unappropriated earnings will be reduced from 10% to 5%. Deferred tax assets and deferred tax liabilities recognized as at December 31, 2017 are expected to be adjusted and increase by $11,343 thousand and $22,101 thousand, respectively, in 2018.

As the status of the 2018 appropriation of earnings is uncertain, the potential income tax consequences of the 2017 unappropriated earnings are not reliably determinable.

64

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year: Adjustments to deferred tax attributable to changes in tax rates and laws Translation of foreign operations Actuarial gains and losses on defined benefit plan Total income tax recognized in other comprehensive income	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (9,225) (31,680) (267) $ (41,172)	2017 $ - (39,057) (1,381) $ (40,438)

c. Current tax assets and liabilities

Current tax assets - income tax payable Tax refund receivable Current tax liabilities - income tax payable Income tax payable		December	31
		2018 $ 22,447 $ 8,619	2017 $ - $ 47,417

• d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2018

Deferred tax assets Temporary differences Property, plant and equipment Intangible assets Defined benefit obligation Allowance for impaired receivables Write-down of inventories Impairment loss Loss carryforwards Unrealized gain or loss investments in associates and joint ventures accounted for using the equity method Exchange differences on translating foreign operations Others Deferred tax liabilities Temporary differences Unrealized gain or loss investments in	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehen- sive Income $ 19,764 $ (13,684) $ - 22 (23) - 6,920 415 1,099 12,017 (5,804) - 43,934 (33,026) - 5,980 1,054 - 60,020 (60,091) - - 1,744 - 47,589 - 40,073 11,075 10,623 - $ 207,321 $ (98,792) $ 41,172 $ 125,067 $ (125,067) $ -	Exchange Differences $ (90) 1 - 6 (81) (5) 71 (32) (27) 5 $ (152) $ -	Closing Balance $ 5,990 - 8,434 6,219 10,827 7,029 - 1,712 87,635 21,703 $ 149,549 $ -

65

associates and joint ventures accounted for using the equity method Exchange differences on translating foreign operations - Others 15,217 $ 140,284 For the year ended December 31, 2017	- 1,046 $ (124,021)	- - $ -	- - (284) 15,979 $ (284) $ 15,979 (Concluded)

Deferred tax assets Temporary differences Property, plant and equipment Intangible assets Defined benefit obligation Allowance for impaired receivables Write-down of inventories Impairment loss Loss carryforwards Exchange differences on translating foreign operations Others Deferred tax liabilities Temporary differences Unrealized gain or loss investments in associates and joint ventures accounted for using the equity method Exchange differences on translating foreign operations Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehen- sive Income $ 18,042 $ 2,066 $ - 120 (93) - 5,561 (22) 1,381 6,275 5,719 - 37,803 6,788 - 6,066 (91) - 66,041 (4,627) - 8,714 - 38,875 15,881 (4,731) - $ 164,503 $ 5,009 $ 40,256 $ 275,727 $ (150,660) $ - 182 - (182) 18,101 (2,523) - $ 294,010 $ (153,183) $ (182)	Exchange Differences $ (344) (5) - 23 (657) 5 (1,394) - (75) $ (2,447) $ - - (361) $ (361)	Closing Balance $ 19,764 22 6,920 12,017 43,934 5,980 60,020 47,589 11,075 $ 207,321 $ 125,067 - 15,217 $ 140,284

e. Deductible temporary differences, unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Expire in 2016 to 2028 Deductible temporary differences		December 31	December 31
		2018 $ 419,883 $ 746,407	2017 $ 913,942 $ 521,883

f. Income tax assessments

The income tax returns of the Company, Soartek Optoelectronics Technology Co., Ltd. and Shuang-Ying Science and Technology, Ltd. through 2016 had been assessed by the tax authorities.

66

31. EARNINGS (LOSSES) PER SHARE

Unit: NT$ Per Share

Basic loss per share From continuing operations From discontinued operations Total basic earnings per share Diluted loss per share From continuing operations From discontinued operations Total diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (5.39) (1.50) $ (6.89) $ (5.39) (1.50) $ (6.89)	2017 $ (3.07) (0.18) $ (3.25) $ (3.07) (0.18) $ (3.25)

The earnings (losses) and weighted average number of ordinary shares outstanding in the computation of earnings (losses) per share were as follows:

Net Loss for the Year

Losses used in the computation of basic earnings (losses) per share Less: Losses for the year from discontinued operation used in the computation of basic earnings per share from discontinued operations Losses used in the computation of basic earnings (losses) per share Losses used in the computation of diluted earnings (losses) per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ (837,986) (182,008) $ (655,978) $ (655,978)	2017 $ (395,810) (21,621) $ (374,189) $ (374,189)

Weighted average number of ordinary shares outstanding (in thousand shares):

Weighted average number of ordinary shares in the computation of basic earnings (losses) per share Effect of potentially dilutive ordinary shares: Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings (losses) per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 121,662 - 121,662	2017 121,741 - 121,741

If the outstanding convertible bonds issued by the Company were converted to ordinary shares, since the exercise price of the options or warrants issued by the Company exceeded the average market price of the shares during 2018 and 2017, they were anti-dilutive and excluded from the computation of diluted earnings (losses) per share.

67

If the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation will be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings (losses) per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings (losses) per share until the number of shares to be distributed to employees is resolved in the following year.

32. DISPOSAL OF SUBSIDIARIES

On December 25, 2015 and March 19, 2018, the Group entered into an agreement to end of the operation of Vastech Plastic (Shanghai) Industrial Co., Ltd., Ltd., Vastech Industrial Co., Ltd., and Hsiangtek Optical Technology Co., Ltd., respectively. The liquidation was completed on April 19, 2018, June 21, 2018 and May 28, 2018, and all the relevant shares were retired.

• a. Consideration received from disposals

	Vastech Plastic
	(Shanghai)		Vastech		Hsiangtek
	Industrial Co.,	Industrial Co.,				Optical
	Ltd.		Ltd.		Technology Co.
Consideration received in cash and cash
equivalents	$ 94,656	$ 103,692			$ 14,820
Analysis of assets and liabilities on the date control was lost
	Vastech Plastic
	(Shanghai)		Vastech		Hsiangtek
	Industrial Co.,	Industrial Co.,				Optical
	Ltd.		Ltd.		Technology Co.
Net assets disposed of
Cash and cash equivalents	$ 94,656	$	103,692		$	14,820
Gain or loss on disposals of subsidiaries
	Vastech Plastic
	(Shanghai)		Vastech		Hsiangtek
	Industrial Co.,	Industrial Co.,				Optical
	Ltd.		Ltd.		Technology Co.
Consideration received	$ 94,656	$	103,692		$	14,820
Net assets disposed of	(94,656)		(103,692)			(14,820)
Non-controlling interests
Exchange differences on subsidiaries
disposed of reclassified to profit or loss	40,135			-		(80)
Gain or loss on disposals	$ 40,135	$		-	$	(80)

b. Analysis of assets and liabilities on the date control was lost

c. Gain or loss on disposals of subsidiaries

The gain or loss on disposal is included in the gain or loss on disposal of subsidiaries.

68

d. Net cash inflow on disposals of subsidiaries

	Vastech Plastic	Vastech Plastic
	(Shanghai)			Vastech		Hsiangtek
	Industrial Co.,		Industrial Co.,				Optical
		Ltd.		Ltd.		Technology		Co.
Consideration received in cash and cash
equivalents	$	94,656	$	103,692		$	14,820
Less: Cash and cash equivalent balances
disposed of		(94,656)		(103,692)			(14,820)
	$	-	$		-	$		-

33. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On December 21, 2016, the board of directors of the Company approved to issue additional ordinary shares in the amount of US$6,200 thousand of Plenty Link Technology Co., Ltd., and the ordinary shares of Plenty Link Technology Co., Ltd. total US$18,000 thousand. In addition, the proportion of ownership and voting rights in Plenty Link Technology Co., Ltd. held by the Company increased to 65%.

The above transactions were accounted for as equity transaction since the Company did not cease to have control over Plenty Link Technology Co., Ltd.

	Plenty Link	Plenty Link
	Technology Co.,
		Ltd.
Cash consideration paid	$	(191,084)
The proportionate share of the carrying amount of the net assets of the subsidiary
transferred from non-controlling interests		183,139
Difference arising from equity transactions	$	(7,945)
Line items adjusted for equity transactions
Difference arising from equity transactions
Capital surplus - changes in percentage of ownership interests in subsidiaries	$	(7,945)

34. NON-CASH TRANSACTIONS

As of December 31, 2018 and 2017, the Group reclassified long-term borrowings and bonds payable of $191,667 thousand and $796,534 thousand, respectively, under current portion of long-term borrowings.

69

35. OPERATING LEASE ARRANGEMENTS

The Group as Lessee

• a. Rental agreements

Lessee Sinxon Plastic (Dong Guan) Ltd. Sinxon Plastic (Dong Guan) Ltd. Sinxon Plastic (Dong Guan) Ltd. Sinxon Plastic (Dong Guan) Ltd. Sinxon Plastic (Dong Guan) Ltd. Dongguan Shuang-Ying Photoelectric technology Co, Ltd. Don Guan Cheng Da Metal Product Co., Limited Don Guan Cheng Da Metal Product Co., Limited Dongguan Chensong Plastic Co., Ltd.	Lesser Lan Zhi-Hsing Sun Pei-Fan Sun Pei-Fan Sun Jung-Yuan Tan Yi-Ling Tan Yi-Ling Tan Yi-Ling Don Guan Jin Chuang Electrical Appliance Trading Co., Ltd. Sun Yu-Hao	Objection Building Dormitory Plant and dormitory Plant and dormitory Plant and dormitory Plant and dormitory Plant and dormitory Plant and dormitory Plant and dormitory	Period and Method of Payment
			From December 1, 2015 to November 30, 2023, rental is RMB203 thousand every month. From October 1, 2017 to May 31, 2019, rental is RMB226 thousand every month. From April 1, 2017 to March 31, 2022, rental is RMB561 thousand every month. From April 1, 2017 to March 31, 2022, rental is RMB297 thousand every month. From April 1, 2018 to March 31, 2023, rental is RMB948 thousand every month. From February 1, 2018 to March 31, 2022, rental is RMB111 thousand every month. From April 1, 2017 to March 31, 2022, rental is RMB387 thousand every month. From April 1, 2018 to March 31, 2023, rental is RMB515 thousand every month. From January 1, 2017 to December 31, 2023 rental is RMB707 thousand every month.

• b. The future minimum lease payments of non-cancellable operating leases are as follows:

Not later than 1 year Later than 1 year and not later than 5 years		December 31	December 31
		2018 $ 177,696 508,644 $ 686,340	2017 $ 191,043 592,714 $ 783,757

36. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The Group adopts prudent risk management strategy and performs audit on a regular basis. The capital structure of the Group is determined according to the business development strategies and operational requirements.

70

37. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments that are not measured at fair value

• 1) Financial assets and liabilities not measured at fair value that differences between carrying amounts and fair values were as follows:

2)	Financial assets Financial assets measured at amortized cost - non-current Financial liabilities Financial liabilities measured at amortized cost - convertible bonds Fair value hierarchy December 31, 2018: None. Financial liabilities Financial liabilities measured at amortized cost Convertible bonds	December 31	December 31
		2018 2017 Carrying Amount Fair Value Carrying Amount Fair Value $ - $ - $ 101,398 $ - - - 100,700 109,607 December 31, 2017	2017
		Level 1 Level 2 Level 3 Total $ 109,607 $ - $ - $ 109,607

• b. Fair value of financial instruments that are measured at fair value on a recurring basis

• 1) Fair value hierarchy

Financial assets at FVTOCI Invest in equity instruments at FVTOCI Unlisted shares	December 31, 2018
	Level 1 Level 2 Level 3 Total $ - $ - $ 256,821 $ 256,821

71

Available-for-sale financial assets Securities listed in ROC Equity securities Financial liabilities at FVTPL Other	December 31, 2017
	Level 1 Level 2 Level 3 Total $ 19,780 $ - $ - $ 19,780 - - 2,425 2,425

There were no transfers between Levels 1 and 2 in the current and prior periods.

• 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2018

	Financial
	Liabilities at
	Fair Value
	Through
	Profit or Loss
Balance at January 1, 2018	$ (2,425)
Recognized in profit or loss	(1,017)
Repayment of bonds	3,442
Balance at December 31, 2018	$ -
For the year ended December 31, 2017
	Financial
	Liabilities at
	Fair Value
	Through
	Profit or Loss
Balance at January 1, 2017	$ (33,760)
Recognized in profit or loss	(3,648)
Repayment of bonds	34,983
Balance at December 31, 2017	$ (2,425)

• 3) Valuation techniques and inputs applied for the purpose of measuring Level 3 fair value measurement

Derivatives: The right of redemption and put are estimated fair value by convertible bonds with binomial tree method using price volatility (significant unobservable inputs). When the increase in price volatility, the fair value of these derivatives would increase.

72

c. Categories of financial instruments

Financial assets Financial assets at FVTPL Mandatorily classified as a FVTPL Loans and receivables (1) Available-for-sale financial assets Available-for-sale financial assets - current Financial assets measured at cost - non-current Financial assets Financial assets at amortized cost (2) Financial assets at FVTOCI Equity instruments - current Equity instruments - non-current Financial liabilities FVTPL Others Financial liabilities at amortized cost (3)

December 31

2018 2017 $ 85,031 $ - - 4,666,098 - 19,780 - 101,398 2,989,762 - 201,879 - 54,942 - - 2,425 2,609,820 3,789,865

• Note 1: The balances included loans and receivables measured at amortized cost, which comprise cash and cash equivalents, trade and other receivables and other financial assets.

• Note 2: The balances included financial assets at amortized cost, which comprise cash and cash equivalents, trade and other receivables, and financial assets at amortized cost.

• Note 3: The balances included financial liabilities measured at amortized cost, which comprise short-term and long-term loans, notes payable, trade and other payables, payables on equipment and bonds payable issued.

d. Financial risk management objectives and policies

The Group sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Group’s policies approved by the board of directors, which provided written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits was reviewed by the internal auditors on a continuous basis.

The Group’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

73

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. The Group entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including:

a) Foreign currency risk

The Group use foreign exchange forward contracts to eliminate currency exposure in foreign currency risk. The change of rate eliminated by the profit and loss of the terms of the hedge derivatives so the market price risk is not martial.

The following table details the Group’s sensitivity to a 1% increase and decrease in New Taiwan dollars (i.e. the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign currency forward contracts designated as cash flow hedges. For a 1% weakening of New Taiwan dollars against the relevant currency, there would be a decrease of $8,083 thousand and $13,135 thousand for the years ended December 31, 2018 and 2017, respectively, in post-tax income.

b) Interest rate risk

The Group was exposed to fair value interest rate risk in relation to fixed-rate bank borrowings. The bonds payable are fixed-rate and measured at amortized cost, so changes in rate will not have effect on the cash flow in the future.

The sensitivity analysis assumed bank borrowings were held for the whole reporting period and there was a 1% change in rates; it would result in a decrease of $7,933 thousand and $15,735 thousand for the years ended December 31, 2018 and 2017, respectively, in post-tax income.

c) Other price risk

The Group was exposed to equity price risk through its investments in listed equity securities. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments. The Group manages this exposure by maintaining a portfolio of investments with different risks.

The sensitivity analysis assumed the listed equity securities were outstanding for the whole reporting period and there was a 5% change in price; it would result in a decrease of $12,841 thousand and $989 thousand for the years ended December 31, 2018 and 2017, respectively, in comprehensive income.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to minimize credit risk, management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. In this regard, management believes the Group’s credit risk was significantly reduced.

74

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

For the ended December 31, 2018 and 2017, the unused bank borrowings are $958,333 thousand and $814,167 thousand, respectively.

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table was drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

December 31, 2018

			Later Than	Later Than	1	Later Than	2
			Year and Up			Years and Up
	Up to 1 Year		to	2 Years		to 3 Years		Over 3 Years		Total
Non-derivative financial liabilities
Notes payable	$	258	$		-	$	-	$	- $	258
Trade payables		1,023,331			-		-		-	1,023,331
Payables on equipment		20,662			-		-		-	20,662
Other payables		574,002			-		-		-	574,002
Current tax liabilities		8,619			-		-		-	8,619
Current portion of long-term
borrowings and bonds payable		191,667			-		-		-	191,667
Long-term borrowings		-		800,000			-		-	800,000

December 31, 2017

			Later Than	1	Later Than	2
			Year and Up		Years and Up
	Up	to 1 Year	to 2 Years		to 3 Years		Over 3 Years		Total
Non-derivative financial liabilities
Notes payable	$	484	$	-	$	-	$	- $	484
Trade payables		969,939		-		-		-	969,939
Payables on equipment		47,478		-		-		-	47,478
Other payables		775,202		-		-		-	775,202
Other payables to related parties		228		-		-		-	228
Current tax liabilities		47,417		-		-		-	47,417
Current portion of long-term
borrowings and bonds payable		796,534		-		-		-	796,534
Long-term borrowings		-	1,177,778		22,222			-	1,200,000

75

38. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which were related parties of the Company, had been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Company and related parties are disclosed below.

• a. Related party name and categories

Related Party Name Related Party Categories Toyo Precision Appliance (Kunshan) Co., Ltd. Associates - equity-method investments Changshu Houkennixx Plastic Product Co., Ltd. Associates - equity-method investments Siix Coxon Precision Phils., Inc. Associates - equity-method investments Guangdong Tonly Precision Structure Co., Ltd. Associates - equity-method investments Tonly Electronic (Huizhou) Co., Ltd. Others - the parent of Guangdong Tongli Precision Structure Co., Ltd. Quanta Computer Inc. Other - the third joint venture party of Plenty Link Technology Co., Ltd.

• b. Sales of goods

Line Item Related Party Category/Name Sales Associates Changshu Houkennixx Plastic Product Co., Ltd. Siix Coxon Precision Phils., Inc. Toyo Precision Appliance (Kunshan) Co., Ltd. Guangdong Tonly Precision Structure Co., Ltd. Others Quanta Computer Inc. Tonly Electronic (Huizhou) Co., Ltd.	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 12,959 1,355 - 8,728 1,845 234,274 $ 259,161	2017 $ 12,675 10,356 1,149 - - - $ 24,180

• c. Receivable from related parties (excluding loans to related parties)

Line Item Related Party Category/Name Trade receivables Associates Siix Coxon Precision Phils., Inc. Toyo Precision Appliance (Kunshan) Co., Ltd. Others Quanta Computer Inc. Tonly Electronic (Huizhou) Co., Ltd.		December 31	December 31
		2018 $ 38 222 173 64,193 $ 64,626	2017 $ 298 - - - $ 298 (Continued)

76

Line Item Related Party Category/Name Other receivables Associates Toyo Precision Appliance (Kunshan) Co., Ltd. Changshu Houkennixx Plastic Product Co., Ltd. Guangdong Tonly Precision Structure Co., Ltd. Siix Coxon Precision Phils., Inc. Others Tonly Electronic (Huizhou) Co., Ltd.		December 31	December 31
		2018 $ - 5,402 19,194 - 342 $ 24,938	2017 $ 24,748 6,312 - 849 - $ 31,909 (Concluded)

For the years ended December 31, 2018 and 2017, no impairment loss was recognized for trade receivables from related parties.

• d. Other transactions with related parties

Line Item Related Party Category/Name Other revenue Associates Toyo Precision Appliance (Kunshan) Co., Ltd. Siix Coxon Precision Phils., Inc. Changshu Houkennixx Plastic Product Co., Ltd. Processing income Associates Siix Coxon Precision Phils., Inc. Other income Associates Guangdong Tonly Precision Structure Co., Ltd. Profit or loss of Others discontinued operations Quanta Computer Inc.	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 648 2,804 - $ 3,452 $ 67 $ 266 $ 1,479	2017 $ - 2,409 1,143 $ 3,552 $ - $ - $ -

77

Line Item Related Party Category/Name Contract liabilities Associates Siix Coxon Precision Phils., Inc. Receipts in advance Associates Toyo Precision Appliance (Kunshan) Co., Ltd. Siix Coxon Precision Phils., Inc. Other current Associates liabilities Siix Coxon Precision Phils., Inc. Other non-current Associates liability - guarantee deposit received Guangdong Tonly Precision Structure Co., Ltd. Liability directly Others associated with non-current assets held for sale Quanta Computer Inc. e. Rent revenue Related Party Rental Category/Name Rental Object Payment Associates - Changshu Houkennixx Plastic Product Co., Ltd. Jiangsu Province Southeast Economic Development Zone 28 Jiulong Road Plant and dormitory rental paid monthly Associates - Guangdong Tonly Precision Structure Co., Ltd. Block C, West No. 3, South Central South Road, Shangsha Haibin District, Chang’an Town, Dongguan City				December	31
			$	2018 2017 1,677 $ - - $ 1,362 - 402 - $ 1,764 - $ 1,486 2,954 $ - 692 $ - For the Year Ended December 31
			$
			$
			$
			$
			$
				2018 $ 7,696 1,854 $ 9,550	2017 $ 6,795 - $ 6,795

78

• f. Disposal of property, plant and equipment

Related Party Category/Name Associates Toyo Precision Appliance (Kunshan) Co., Ltd. Others Tonly Electronic (Huizhou) Co., Ltd.		Proceeds For the Year Ended December 31 2018 2017 $ 4,528 $ - $ 2,720 $ -		Gain (Loss) on Disposal	Gain (Loss) on Disposal
				For the Year Ended December 31
		2018 $ 4,528 $ 2,720		2018 $ 399 $ 214	2017 $ - $ -

• g. Compensation of key management personnel

The remuneration of directors and other members of key management personnel for the years ended December 31, 2018 and 2017 were as follows:

Short-term benefits Post-employment benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 45,394 1,323 $ 46,717	2017 $ 45,869 1,539 $ 47,408

The remuneration of directors and key executives was determined by the remuneration committee with regard to the performance of individuals and market trends.

• h. Refer to note 33 for the transaction that the Group increased the capital of Plenty Link Technology Co., Ltd. by cash in 2017.

39. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, the tariff of imported raw materials guarantees or the deposit for court guarantees:

Financial assets at amortized cost Property, plant and equipment - land Property, plant and equipment - buildings Prepaid lease payments Other financial assets - current		December 31	December 31
		2018 $ 72,464 79,244 39,061 13,694 - $ 204,463	2017 $ - 79,244 40,294 14,968 177,949 $ 312,455

79

40. SIGNIFICANT EVENTS AFTER REPORTING PERIOD

Due to the consideration of asset activation by the surviving company of the Group, on November 14, 2018, the Company’s board of directors resolved to dispose of Teckyork Enterprise Co., Ltd.. The surviving company signed an equity transfer agreement with Magical Fountain Limited on March 14, 2019 with reference to the other accountant’s Opinion on Rationality of Equity Price and the American Appraisal Co., Ltd.’s Consolidated Report on the Value of Net Assets in order for Magical Fountain Limited to acquire Teckyork Enterprise Co. of the Group at USD 26,106 thousand (tentatively).

41. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of December 31, 2017 were as follows:

• a. Dong Guan Cheng Da Metal Product Co., Ltd. had commitments to buy machinery and equipment and to comply with repair construction contracts which amounted to $3,534 thousand, of which $3,021 thousand has been paid and recorded under prepayments for equipment.

• b. Coxon Industry (Changshu) Co., Ltd. had commitments to buy machinery and equipment and to comply with repair construction contracts which amounted to $15,017 thousand, of which $7,367 thousand has been paid and recorded under prepayments for equipment.

• c. Sinxon Plastic (Dong Guan) Ltd. had commitments to buy machinery and equipment and to comply with repair construction contracts which amounted to $38,502 thousand, of which $31,291 thousand has been paid and recorded under prepayments for equipment.

• d. Dong Guan Chensong Plastic Co., Ltd. had commitments to buy machinery and equipment and to comply with repair construction contracts which amounted to $9,871 thousand, of which $8,453 thousand has been paid and recorded under prepayments for equipment.

• e. Dongguan Shuang-Ying Photoelectric Technology Co., Ltd. had commitments to buy machinery and equipment and to comply with repair construction contracts which amounted to $35,685 thousand, of which $31,151 thousand has been paid and recorded under prepayments for equipment.

• f. Coxon Precise Industrial Co., Ltd. had commitments to buy machinery and equipment to comply with repair construction contracts which amounted to $549 thousand, of which $549 thousand has been paid and recorded under prepayments for equipment.

• g. The digital camera lawsuit between JCD Corporation (hereinafter referred to as “JCD”) and the Company is summarized as below.

• 1) Lawsuit matters: JCD applied to the Japan Commercial Arbitration Association for a tort arbitration in relation to its forbidding of the Company from producing and selling the digital camera lens designed by JCD as well as its demand for payment of US$2,662 thousand, JPY635 thousand and RMB393 thousand as compensation in 2010.

• 2) Lawsuit status up to report date: According to the verdict of the Japan Commercial Arbitration Association, Tokyo No. 10-11 is summarized as below.

  • a) The Company (the defendant) should pay JCD US$1,441 thousand, JPY1,270 thousand and the related accrued interests accrued from November 24, 2010 up to the date on which the total compensation is made using a 6% annual interest rate.

  • b) The Company cannot manufacture and sell the suspended category of digital camera zooms.

  • c) The company shall pay the petitioner a litigation fee of JPY 1,562 thousand.

80

In accordance with the Japanese arbitration judgment and the Taiwan Taoyuan District Court's recognized ruling, JCD filed a claim to the company for an enforcement amount, including 43,901 thousand compensation for creditor's rights, a 6% annual interest rate from November 24, 2010 to the settlement date and an execution fee of 351 thousand. The company requested the Taiwan Taoyuan District Court to suspend the enforcement process and obtained the approval, and provided a 13,400 thousand bearer negotiable certificate of deposit as a guarantee (accounted for under “financial assets measured at amortized cost - current” on December 31, 2018). The enforcement procedure has been temporarily suspended.

As of December 31, 2018, the Company filed a debtor's objection against JCD and requested the court to adjudicate the cancellation of the aforementioned enforcement procedure and confirmed that JCD’s claim against the Company regarding the aforementioned Japanese arbitration judgment did not exist. On March 4, 2019, the Supreme Court confirmed that the Company lost the case, and the Company estimated that the relevant compensation and additional interest amounted to $65,361 thousand, which is classified as other payables.

81

42. EXCHANGE RATE OF FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2018

Foreign Currencies (In Thousands) Exchange Rate Financial assets Monetary items USD $ 17,068 6.86 (USD:RMB) USD 32,886 30.72 (USD:NTD) EUR 11 1.15 (EUR:USD) EUR 3 35.20 (EUR:NTD) JPY 30 0.06 (JPY:RMB) JPY 49,744 0.01 (JPY:USD) JPY 20,198 0.28 (JPY:NTD) HKD 13 0.88 (HKD:RMB) HKD 599 0.13 (HKD:USD) HKD 2,733 3.92 (HKD:NTD) RMB 5,377 0.15 (RMB:USD) RMB 29 4.47 (RMB:NTD) CHF 1 1.02 (CHF:USD) Non-monetary items Investments accounted for using equity method RMB 4,472 0.15 (RMB:USD) USD 300 30.72 (USD:NTD) Financial liabilities Monetary items USD 6,931 6.86 (USD:RMB) USD 11,371 30.72 (USD:NTD) EUR 12 7.87 (EUR:RMB) JPY 7,044 0.06 (JPY:RMB) JPY 50,570 0.01 (JPY:USD) HKD 252 0.88 (HKD:RMB) HKD 34 0.13 (HKD:USD) RMB 276 0.15 (RMB:USD) RMB 76 4.47 (RMB:NTD)	Carrying Amount $ 524,259 1,010,090 387 118 8 13,839 5,619 51 2,348 10,714 24,048 130 11
	$ 1,591,622
	$ 20,005 9,209
	$ 29,214
	$ 212,898 349,261 424 1,960 14,069 988 135 1,233 338
	$ 581,306

82

December 31, 2017

Foreign Currencies (In Thousands) Exchange Rate Financial assets Monetary items USD $ 54,281 6.53 (USD:RMB) USD 36,504 29.76 (USD:NTD) EUR 2 7.81 (EUR:RMB) EUR 14 1.20 (EUR:USD) EUR 2 35.57 (EUR:NTD) JPY 234 0.06 (JPY:RMB) JPY 103,474 0.01 (JPY:USD) JPY 1,533 0.26 (JPY:NTD) HKD 3,396 0.84 (HKD:RMB) HKD 6,084 0.13 (HKD:USD) HKD 13,055 3.81 (HKD:NTD) RMB 29 4.57 (RMB:NTD) RMB 13,872 0.15 (RMB:USD) CHF 8 0.98 (CHF:USD) Non-monetary items Investments accounted for using equity method RMB 68,032 0.15 (RMB:USD) USD 444 29.76 (USD:NTD) Financial liabilities Monetary items USD 10,207 6.53 (USD:RMB) USD 31,169 29.76 (USD:NTD) EUR 7 7.81 (EUR:RMB) JPY 9,563 0.06 (JPY:RMB) JPY 93,400 0.01 (JPY:USD) JPY 1,335 0.26 (JPY:NTD) HKD 2,241 0.84 (HKD:RMB) HKD 3,434 0.13 (HKD:USD) HKD 2,100 3.81 (HKD:NTD) RMB 1,740 0.15 (RMB:USD) RMB 103 4.57 (RMB:NTD)	Carrying Amount $ 1,615,415 1,086,348 56 501 85 62 27,338 405 12,927 23,161 49,701 133 63,324 234
	$ 2,879,690
	$ 310,908 13,225
	$ 324,133
	$ 303,748 927,576 235 2,526 24,676 353 8,530 13,075 7,994 7,942 471
	$ 1,297,126

For the years ended December 31, 2018 and 2017, (realized and unrealized) net foreign exchange loss and gains were $14,662 thousand and $107,586 thousand, respectively. It is impractical to disclose net foreign exchange gain or losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the Group.

83

43. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and investees:

• 1) Financing provided to others: (Table 1)

• 2) Endorsements/guarantees provided: None

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures): (Table 2)

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None

• 5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None

• 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: (Table 3)

• 8)Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: (Table 4)

• 9) Trading in derivative instruments: (Notes 7, 22 and 37)

• 10) Intercompany relationships and significant intercompany transactions: (Table 7)

• 11) Information on investees: (Table 5)

• b. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: (Table 6)

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (Table 6):

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

84

• e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

• f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.

44. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Group’s reportable segments under IFRS 8 “Operating Segments” were as follows:

• Taiwan and South China

• South China (the chief operating range are domestic sales)

• Shanghai

• Changshu

• Others

• a. Segment revenues and results

The following was an analysis of the Group’s revenue and results from continuing operations by reportable segment.

Segment revenue and results Revenue from external customers Inter-segment revenue Segment revenue Segment income Interest income Other income Finance costs Other expense and loss Income from continuing operations before income tax Segment assets Assets Non-current assets held for sale Investments Current tax assets Deferred tax assets Total assets Depreciation and amortization Acquisition of property, plant and equipment				For the Year	Ended December 31, 2018	Ended December 31, 2018
		Taiwan and South China $ 2,183,518 1,818,239 $ 4,001,757 $ (160,285) $ 3,007,013 $ 130,597 $ 15,195	South China $ 2,311,913 1,852,098 $ 4,164,011 $ (607,535) $ 2,786,152 $ 401,334 $ 57,553	Shanghai $ 9,548 6,852 $ 16,400 $ 6,406 $ 15,897 $ 36,316 $ 24,659	Changshu $ 921,334 38,280 $ 959,614 $ (7,864) $ 1,892,248 $ 75,840 $ 33,052	Others Adjustments and Elimination $ 73,667 $ - 58,616 (3,774,085) $ 132,283 $ (3,774,085) $ 16,502 $ 75,133 $ 254,492 $ (2,046,696) $ 5,485 $ 2,227	Total $ 5,499,980 - $ 5,499,980 $ (677,643 ) 8,276 194,492 (32,939 ) (196,986) $ (704,800) $ 5,909,106 538,154 371,066 22,447 149,549 $ 6,990,322 $ 649,572 $ 132,686

85

Segment revenue and results Revenue from external customers Inter-segment revenue Segment revenue Segment income Interest income Other income Finance costs Other expense and loss Income from continuing operations before income tax Segment assets Assets Investments Deferred tax assets Total assets Depreciation and amortization Acquisition of property, plant and equipment				For the Year	Ended December 31, 2017	Ended December 31, 2017
		Taiwan and South China $ 2,968,833 2,458,903 $ 5,427,736 $ 295,729 $ 3,611,051 $ 134,841 $ 93,389	South China $ 1,365,815 2,444,965 $ 3,810,780 $ (737,217) $ 3,877,174 $ 475,181 $ 88,546	Shanghai $ 20,259 2,565 $ 22,824 $ (7,002) $ 999,178 $ 43,450 $ 2,778	Changshu $ 1,068,529 17,932 $ 1,086,461 $ (7,009) $ 2,675,212 $ 78,889 $ 13,941	Others Adjustments and Elimination $ 63,254 $ - 53,675 (4,978,040) $ 116,929 $ (4,978,040) $ 16,681 $ 49,336 $ 301,905 $ (2,733,064 ) $ 5,489 $ 173	Total $ 5,486,690 - $ 5,486,690 $ (389,482 ) 9,606 23,341 (36,889 ) (111,322) $ (504,746) $ 8,731,456 445,311 207,321 $ 9,384,088 $ 737,850 $ 198,827

Segment profit represented the profit before tax earned by each segment without gain or loss on disposal of property, plant and equipment, interest income, dividend income, gain on disposal of investments, share of profit or loss of associates, net exchange gain or loss, net profit or loss of financial assets measured at FVTPL, finance costs and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

On July 19, 2018, the Central China and Shanghai area was resolved by the board of directors to be transferred, and the transfer is expected to be completed within one year.

• b. Revenue from major products and services

The following is an analysis of the Group’s revenue from continuing operations from its major products and services.

Plastic components Molds Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 5,060,199 120,171 319,610 $ 5,499,980	2017 $ 4,761,334 480,978 244,378 $ 5,486,690

86

c. Geographical information

The Group operates in three principal geographical areas - Taiwan and China.

The Group’s revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are detailed below.

Taiwan China America Japan Others		Revenue from External Customers 2018 2017 $ 272,586 $ 44,616 4,405,349 2,002,890 19,493 130,069 427,805 492,053 374,747 2,817,062 $ 5,499,980 $ 5,486,690		Non-current Assets	Non-current Assets
				December 31
		2018 $ 272,586 4,405,349 19,493 427,805 374,747 $ 5,499,980		2018 $ 133,425 2,049,804 - - - $ 2,183,229	2017 $ 146,502 3,090,200 - - - $ 3,236,702

Non-current assets exclude non-current assets classified as held for sale, financial instruments, and deferred tax assets.

• d. Information about major customers

Individual customers accounting for at least 10% of net sales for the years ended December 31, 2018 and 2017 were as follows:

Customer Customer A Customer B	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2018 $ 1,428,765 - $ 1,428,765	2017 $ 679,029 161,957 $ 840,986

87

TABLE 1

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Parties	Highest Balance for the Year	Ending Balance	Actual Borrowing Amount	Interest Rate	Nature of Financing	Business Transaction Account and Amounts	Reasons for Short-term Financing	Collateral	Collateral	Financing Limit for Each Borrower	Aggregate Financing Limits
												Item	Value
1	Coxon Industry (Changshu) Co., Ltd.	Sinxon Plastic (Dong Guan) Ltd. Dong Guan Chensong Plastic Co., Ltd.	Other receivables Other receivables	Yes Yes	$ 623,238 93,720	$ 415,896 -	$ 415,896 -	5.31 5.31	Financing Financing	Interest income $ 23,428 Interest income 2,166	Working capital Working capital	- -	$ - -	$ 904,794 904,794	$ 904,794 904,794
2	Sun Can International Ltd.	Coxon Precise International Ltd. Sinxon Plastic (Dong Guan) Ltd.	Other receivables Other receivables	Yes Yes	107,503 153,575	- 153,575	- 153,575	1.50 -	Financing Financing	Interest income 1,235 Interest income -	Working capital Working capital	- -	- -	921,195 929,160	921,195 929,160
3	Coxon Industry Ltd.	Cheng Da Industry Ltd. Hang Yuan Enterprise Ltd.	Other receivables Other receivables	Yes Yes	29,195 29,130	- -	- -	1.50 1.50	Financing Financing	Interest income 113 Interest income 5	Working capital Working capital	- -	- -	747,750 747,750	747,750 747,750
4	Dong Guan Cheng Da Metal Product Co., Ltd.	Sinxon Plastic (Dong Guan) Ltd.	Other receivables	Yes	117,150	44,720	44,720	5.31	Financing	Interest expense 4,087	Working capital	-	-	274,864	274,864
5	Changshu Huaxon Industry Co., Ltd.	Sinxon Plastic (Dong Guan) Ltd.	Other receivables	Yes	138,650	134,160	134,160	5.31	Financing	Interest expense 4,018	Working capital	-	-	797,006	797,006

Note1: The limits on loans to others are handled by the company's invested company in accordance with the letter referenced (91) Tai-Tsai-Cheng (VI) No. 0910161919 from the Securities and Futures Bureau of the Financial Supervision Commission on December 18, 2002. The total amount of loans to others shall not exceed 40% of the net value in the latest audited financial statement by the accountant, and the loan to a single enterprise shall not exceed 30% of the net value in the latest audited financial statement by the accountant. However, the limits above shall not apply if, due to the group’s capital requirement, the object of the loan extension is an affiliated company of Coxon Precise Industrial Co., Ltd., which is the ultimate parent company, and a resolution is passed by the board of directors. However, the loan amount shall not exceed the net value in the latest audited financial statement by the accountant.

88

TABLE 2

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2018

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

Holding Company Name	Type and Issuer of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			December 31, 2018	December 31, 2018			Note
				Shares		Carrying Amount	Percentage of Ownership (%)		Fair Value
Coxon Precise Industrial Co., Ltd. Coxon Precise International Limited	Shares Halo Neuro Inc. CGK International Co., Ltd. PT. Fuji Seiki Indonesia Kin Tin Optotronic Co., Ltd. Aetas Technology Inc. Toyo Precision Appliance (Kunshan) Co., Ltd.	None None None None None Other related party	Financial assets at FVTOCI - current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - current	306,720 1,800,000 1,500,000 2,255,193 106,000 153,360		$ - $ 30,826 24,116 - - $ 54,942 $ 201,879	- 5 18 6 - 15		$ - $ 30,826 24,116 - - $ 54,942 $ 201,879

Note1: The financial assets measured at cost are unlisted shares. The assets were assessed as impaired with a small chance of recovery, so impairment loss was recognized.

Note2: Please refer to Schedule 5 and 6 for information on invested subsidiaries, affiliates and joint-venture interests.

89

TABLE 3

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Trade (Payables) Receivables	Notes/Trade (Payables) Receivables	Note
			Purchase/Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Financial Statement Account and Ending Balance	% of Total
Coxon Precise Industrial Co., Ltd. Coxon Industry Ltd. Sun Can International Ltd. Dong Guan Chensong Plastic Co., Ltd. Sinxon Plastic (Dong Guan) Ltd.	Coxon Industry Ltd. Sun Can International Ltd. Coxon Precise Industrial Co., Ltd. Dong Guan Chensong Plastic Co., Ltd. Coxon Precise Industrial Co., Ltd. Sinxon Plastic (Dong Guan) Ltd. Coxon Industry Ltd. Tonly Electronic (Huizhou) Co., Ltd. Sun Can International Ltd.	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Affiliated company Subsidiaries	Purchases Purchases Sales Purchases Sales Purchases Sales Sales Sales	$ 616,509 1,175,751 616,509 612,201 1,175,751 1,145,554 612,201 234,274 1,145,554	29 56 100 100 100 100 54 21 38	120 days 120 days 120 days 120 days 120 days 120 days 120 days 120 days 120 days	In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements In accordance with mutual agreements	120 days 120 days 120 days 120 days 120 days 120 days 120 days 120 days 120 days	Trade payables $ 177,152 Trade payables 795,947 Trade receivables 177,152 Trade payables 78,709 Trade receivables 795,947 Trade payables 240,089 Trade receivables 78,709 Trade receivables 64,193 Trade receivables 240,089	14 65 100 100 100 100 33 27 33

Note: The related party transactions between subsidiaries have been eliminated upon consolidation.

90

TABLE 4

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2018

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

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Actions Taken
Coxon Industry Ltd. Sun Can International Ltd. Dong Guan Chensong Plastic Co., Ltd. Sinxon Plastic (Dong Guan) Ltd. Coxon Industry (Changshu) Co., Ltd.	Coxon Precise Industrial Co., Ltd. Coxon Precise Industrial Co., Ltd. Sinxon Plastic (Dong Guan) Ltd. Coxon Industry Ltd. Sun Can International Ltd. Sinxon Plastic (Dong Guan) Ltd.	Ultimate parent company Ultimate parent company Associate Ultimate parent company Ultimate parent company Associate	$ 177,152 795,947 134,260 (Note 1) 78,709 240,089 416,205 (Note 1)	2.39 1.69 - 2.40 2.11 -	$ - - - - - -	- - - - - -	$ - - - - - -	$ - - - - - -

Note 1: Listed on other receivables.

Note 2: The related party transactions between subsidiaries had been eliminated upon consolidation.

91

TABLE 5

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of December 31, 2018	As of December 31, 2018	As of December 31, 2018	Net Income (Loss ) of the Investee	Share of Profits (Loss)	Note
				December 31, 2018	December 31, 2017	Shares	%	Carrying Amount
Coxon Precise Industrial Co., Ltd. Teckyork Enterprise Co., Ltd. Cheng Yee Enterprise Ltd. Soartek Optoelectronics Technology Co., Ltd. Coxon Industry Ltd. Plenty Link Technology Co., Ltd.	Teckyork Enterprise Co., Ltd. Sun Can International Ltd. Coxon Industry Ltd. Cheng Da Industry Cheng Yee Enterprise Ltd. Soartek Optoelectronics Technology Co., Ltd. Plenty Link Technology Co., Ltd. Vastech Industrial Co., Ltd. Hang Yuan Enterprise Ltd. Coxon Precise International Limited Coxon Medical Limited Hsiangtek Optical Technology Co., Ltd. Siix Coxon Precision Phils, Inc. Shuang Ying Science and Technology Ltd.	Samoa Samoa Samoa Samoa Samoa Taiwan Cayman Islands Samoa Samoa Virgin Islands Samoa Samoa Philippines Taiwan	Global investing activities Global investing activities Global investing activities Global investing activities Global investing activities Manufacturing and sale of nonmetal molding and automobile parts Global investing activities Global investing activities Global investing activities Global investing activities Global investing activities Global investing activities Manufacturing and sale of nonmetal molding Manufacturing of optical instrument and electronic components	$ 901,356 551,004 1,371,321 1,098,824 841,793 51,000 368,107 - 570,464 91,020 95,760 - 121,642 16,500	$ 1,044,773 551,004 1,371,321 1,098,824 1,723,671 51,000 368,107 18,021 1,213,600 91,020 159,600 97,290 121,642 16,500	12,569,700 16,932,762 42,870,000 35,769,500 21,000,000 5,100,000 11,700,000 - 20,000,000 3,000,000 3,000,000 - 4,050,000 1,950,000	100 100 100 100 100 100 65 - 100 100 80 - 45 65 (Note 2)	$ 1,307,592 929,160 747,751 392,740 1,287,641 46,749 144,167 - 926,241 254,261 105,806 - 9,209 9,853	$ (156,160) (289,923) (342,085) (233,551) 131,726 (22) (163,092) - 39,114 74,618 22,635 38,029 (9,358) (8,819)	$ (156,160) (289,923) (342,085) (233,551) 131,726 (22) (106,010) - 39,114 74,618 18,108 38,029 (4,211) (5,732)	Note 3 Note 4

Note 1: All investments and equity of the investee company are eliminated upon consolidation.

Note 2: Coxon Precise Industrial Co., Ltd. holds directly 65% of the voting shares of Plenty Link Technology Co., Ltd., Plenty Link Technology Co., Ltd. holds directly 100% of the voting shares of Sun Can International Ltd. and Coxon Precise Industrial Co., Ltd. holds indirectly 65% of the voting shares of Sun Can International Ltd.

Note 3: Liquidated in June 2018.

Note 4: Liquidated in May 2018.

92

TABLE 6

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2018 (In Thousands of New Taiwan Dollars and U.S. Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2018	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Income as of December 31, 2018	Note
					Outward	Inward
Shanghai Teckyork Enterprise Co., Ltd. Shanghai Sonor Enterprise Co., Ltd. Vastech Plastic (Shanghai) Industrial Co., Ltd. Changshu Huaxon Industry Co., Ltd. Changshu Houkennixx Plastic Product Co., Ltd. Sinxon Plastic (Dong Guan) Ltd. Coxon Industry (Changshu) Co., Ltd. Toyo Precision Appliance (Kunshan) Co., Ltd. Dong Guan Xiangjian Photoelectric Technology Co., Ltd. Shanghai Coxon Medical Ltd. Dong Guan Cheng Da Metal Product Company Ltd. Dong Guan Chensong Plastic Co., Ltd. Dong Guan Shuang-Ying Photoelectric Technology Co., Ltd. Guangdong Tonly Precision Structure Co., Ltd.	Manufacturing and sale of nonmetal molding, precision plastic injection parts and optical lens Manufacturing and sale of nonmetal molding, precision plastic injection parts, related semi-finished goods and components Manufacturing and sale of nonmetal molding, precision plastic injection parts and optical lens Leasehold estate Manufacturing, assembling and sale of plastic products Manufacturing and sale of nonmetal molding and automobile parts Manufacturing and sale of nonmetal molding, precision plastic injection parts, related semi-finished goods and components Manufacturing and processing of sheet metal-press work parts Manufacturing instrument, electronic products and plastic products Manufacturing of medical materials Manufacturing instrument, electronic products and plastic products Manufacturing and sale of metal and nonmetal molding and automobile parts Manufacturing of optical instrument and electronic components Design, production, processing and sales of precision plastic products, molds, plastic parts and hardware components; technical advice, technical services; import and export of goods and technology import and export.	$ 484,400 151,375 - 938,525 - 550,844 1,211,000 936,141 - 149,770 145,871 1,367,130 465,025 92,968	Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Investment through third party Note 10	$ 667,893 218,175 141,310 64,270 - 320,818 1,506,273 194,278 17,991 23,120 141,448 471,320 279,595 -	$ - - - - - - - - - - - - - -	$ - - 98,524 - - - 643,136 - 14,652 - - - - -	$ 667,893 218,175 42,786 64,270 - 320,818 863,137 194,278 3,339 23,120 141,448 471,320 279,595 -	$ (206,061) 15,252 - (6,896) - (316,745) 23,881 - - 11,212 (126,088) (315,066) (151,357) 23,255	100 100 - 100 - 100 100 30 - 80 100 100 65 30	$ (206,061) 15,252 (2,233) (6,896) (2,791) (316,745) 23,881 (2,477) - 8,970 (126,088) (315,066) (98,382) 6,976	$ 414,105 81,893 - 797,006 - 372,363 904,794 - - 71,722 274,864 481,650 131,653 19,990	$ - - - - - - - - - - - - - -
												(Continued)

93

Accumulated Investment in Mainland China as of December 31, 2018	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$4,028,500	$6,908,148	Note 12

Note1: The company invested in Shanghai Teckyork Enterprise Co., Ltd., Shanghai Sonor Enterprise Co., Ltd., Changshu Huaxon Industry Co., Ltd. and Changshu Houkennixx Plastic Product Co., Ltd. through Teckyork Enterprise Co., Ltd. in a third region. Changshu Houkennixx Plastic Product Co., Ltd. was sold in full on December 17, 2018, and Teckyork Enterprise Co., Ltd. has received relevant proceeds.

Note2: The company invested in Vastech Industrial Co., Ltd. through Teckyork Enterprise Co., Ltd. in a third region, and then Vastech Industrial Co., Ltd. invested in Vastech Plastic (Shanghai) Industrial Co., Ltd., which was liquidated in June, 2018. In June 2018, Company F remitted the relevant capital back to Vastech Industrial Co., and then Vastech Industrial Co. remitted it back to the company.

Note3: The company invested in 100% of the equity of Hang Yuan Enterprise Ltd. and Coxon Precise International Limited and 80% of the equity of Coxon Medical Limited through Cheng Yee Enterprise Ltd. in a third region. Hang Yuan Enterprise Ltd., Coxon Precise International Limited and Coxon Medical Limited then respectively invested in 100% of the equity of Coxon Industry (Changshu) Co., Ltd., 30% of the equity of Toyo Precision Appliance(Kunshan) Co., Ltd. and 100% of the equity of Shanghai Coxon Medical Limited. Toyo Precision Appliance(Kunshan) Co., Ltd. has been sold in full on October 9, 2018, and Coxon Precise International Limited has received the relevant proceeds.

Note4: The company invested in Sinxon Plastic (Dong Guan) Ltd. through Sun Can International Ltd. in a third region.

Note5: Investment funds of Shanghai Coxon Medical Limited of US$3,700 thousand came from the own funds of Coxon Medical Limited which Shanghai Coxon Medical Limited invests in.

Note6: As of December 31, 2018, the approved investment capital of US$900 thousand of Changshu Houkennixx Plastic Product Co., Ltd. and US$44,000 thousand of Dong Guan Chensong Plastic Co., Ltd. have not been filed with the Investment Commission for record.

Note7: The company invested in Dong Guan Cheng Da Metal Product Company Limited through Cheng Da Industry Ltd. in a third region.

Note8: The company invested in Dong Guan Chensong Plastic Co., Ltd. through Coxon Industry Ltd. in a third region.

Note9: The company invested in Dongguan Shuang-Ying Photoelectric Technology Co., Ltd. through Plenty Link Technology Co., Ltd. in a third region.

Note10: 30% of the equity is invested with own funds of Coxon Industry (Changshu) Co., Ltd.

Note11: The company invested in Hsiangtek Optical Technology Co., Ltd. through Soartek Optoelectronics Technology Co., Ltd., and then invested in Dong Guan Xiangjian Photoelectric Technology Co., Ltd. through Hsiangtek Optical Technology Co., Ltd. in a third region. The investment funds were own funds. Of Soartek Optoelectronics Technology Co., Ltd. Dong Guan Xiangjian Photoelectric Technology Co., Ltd. was liquidated in December, 2014, and in May, 2018 Hsiangtek Optical Technology Co., Ltd. remitted the relevant capital back to Soartek Optoelectronics Technology Co., Ltd.

Note12: According to the new revised “Principles for Reviewing Investment or Technical Cooperation in Mainland China” on August 29, 2008, the company has obtained from the Industrial Development Bureau of the Ministry of Economic Affairs the certification regarding its compliance with the operation scope of operational headquarters; therefore, no investment limit shall be applied.

Significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: See Table 3.

Endorsements/guarantees provided with investee companies in mainland China, either directly or indirectly through a third party: None.

Financing provided with investee companies in mainland China, either directly or indirectly through a third party: None.

Other transactions which significantly affect profit and loss or the financial situation: None.

(Concluded)

94

TABLE 7

COXON PRECISE INDUSTRIAL CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2018

(Amounts in Thousands of New Taiwan Dollars)

No. (Note 1)	Investee Company	Counterparty	Flow of Transactions (Note 2)	Transaction Details	Transaction Details
				Financial Statement Account	Amount	Payment Terms (Note 3)	% of Total Sales or Assets (Note 4)
0	Coxon Precise Industrial Co., Ltd.	Coxon Industrial Ltd. Sun Can International Ltd. Teckyork Enterprise Co., Ltd. Hang Yuan Enterprise Ltd. Coxon Medical Ltd. Cheng Da Industrial Ltd. Sinxon Plastic (Dong Guan) Ltd. Dong Guan Chensong Plastic Co., Ltd. Shanghai Teckyork Enterprise Co., Ltd. Plenty Link Technology Co., Ltd.	a a a a a a a a a a a a a a a a a a a a	Other receivables Trade payables Purchases Other receivables Trade payables Purchases Other receivables Purchases Other receivables Purchases Other receivables Other receivables Trade receivables Trade payables Payables on equipment Sales Purchases Payables on equipment Payables on equipment Other receivables	$ 372 177,152 616,509 693 795,947 1,175,751 76 6,852 1,643 7,796 308 300 66 1,042 1,418 183 8,607 142 551 89	Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note	- 3 11 - 11 21 - - - - - - - - - - - - - -
1	Coxon Industrial Ltd.	Dong Guan Chensong Plastic Co., Ltd. Cheng Da Industrial Ltd. Hang Yuan Enterprise Ltd.	a a a c c	Trade payables Sales Purchases Interest income Interest income	78,709 2,524 612,201 113 5	Note Note Note Note Note	1 - 1 - -
2	Dong Guan Chensong Plastic Co., Ltd.	Coxon Industry (Changshu) Ltd. Dong Guan Shuang-Ying Photoelectric Technology Co., Ltd.	c c c c c c c c	Trade payables Purchases Finance costs Trade receivables Other payables Sales Purchases Manufacturing overhead	4,072 5,693 2,166 120 4,976 508 7,767 293	Note Note Note Note Note Note Note Note	- - - - - - - -
							(Continued)

95

No. (Note 1)	Investee Company	Counterparty	Flow of Transactions (Note 2)	Transaction Details	Transaction Details
				Financial Statement Account	Amount	Payment Terms (Note 3)	% of Total Sales or Assets (Note 4)
		Sinxon Plastic (Dong Guan) Ltd. Teckyork Enterprise Co., Ltd.	c c c c c c c c	Trade receivables Trade payables Other payables Sales Purchases Manufacturing overhead Other payables Payables on equipment	$ 15,234 15,996 4,814 14,407 49,404 65 112 700	Note Note Note Note Note Note Note Note	- - - - 1 - - -
3	Sun Can International Ltd.	Sinxon Plastic (Dong Guan) Ltd. Coxon Precise International Limited	a a a c c	Trade receivables Trade payables Purchases Miscellaneous expenditures Interest income	7 240,089 1,145,554 63,058 1,235	Note Note Note Note Note	- 3 21 1 -
4	Sinxon Plastic (Dong Guan) Ltd.	Dong Guan Cheng Da Metal Product Co., Ltd. Shanghai Teckyork Enterprise Co., Ltd. Coxon Industry (Changshu) Ltd. Dong Guan Shuang-Ying Photoelectric Technology Co., Ltd. Changshu Huaxon Industry Co., Ltd.	c c c c c c c c c c c c c c c c c c c c c c c c c c c c c	Trade receivables Other receivables Trade payables Other payables Sales Rental revenue Purchases Finance costs Other payables Payables on equipment Sales Purchases Trade receivables Other receivables Trade payables Other payables Sales Finance costs Purchases Trade receivables Other receivables Trade payables Other payables Contract liabilities Sales Purchases Manufacturing overhead Other payables Finance costs	36 2,081 1,476 44,753 763 1,965 6,424 4,087 93 3,479 3,113 695 2,165 1,260 1,945 416,205 4,015 23,428 3,524 5,069 29,279 257 5,266 1,136 3,299 9,775 3,100 134,260 4,018	Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note	- - - 1 - - - - - - - - - - - 6 - - - - - - - - - - - 2 -

(Continued)

96

No. (Note 1)	Investee Company	Counterparty	Flow of Transactions (Note 2)	Transaction Details	Transaction Details
				Financial Statement Account	Amount	Payment Terms (Note 3)	% of Total Sales or Assets (Note 4)
5	Teckyork Enterprise Co., Ltd.	Hang Yuan Enterprise Ltd. Shanghai Teckyork Enterprise Co., Ltd.	c a	Service costs Manufacturing overhead	$ 416 1	Note Note	- -
6	Shanghai Teckyork Enterprise Co., Ltd. .	Coxon Industry (Changshu) Ltd. Shanghai Sonor Enterprise Co., Ltd. Shanghai Coxon Medical Limited	c c c c c c c c c	Trade receivables Other receivables Other payables Sales Manufacturing overhead Other receivables Purchases Other receivables Rental revenue	191 12,073 2,635 600 10,253 1 10,064 473 3,268	Note Note Note Note Note Note Note Note	- - - - - - - - -
7	Changshu Huaxon Industry Co., Ltd.	Coxon Industry (Changshu) Ltd.	c	Rental revenue	31,738	Note	1
8	Coxon Medical Limited	Shanghai Coxon Medical Limited	a a	Trade payables Purchases	13,609 58,616	Note Note	- 1
9	Dong Guan Shuang-Ying Photoelectric Technology Co., Ltd.	Shuang-Ying Science and Technology, Ltd.	c c	Trade receivables Sales	167 2,336	Note Note	- -
10	Hang Yuan Enterprise Ltd.	Coxon Industry (Changshu) Ltd.	a a a a	Trade payables Sales Service revenue Purchases	4,305 5,125 348 5,125	Note Note Note Note	- - - -

Note 1: The numbers above are identified as follows:

a. “0” for the Company.

b. “1” for the subsidiary.

Note 2: The flow of transactions was as follows:

a. From the Company to the subsidiary.

b. From the subsidiary to the Company.

• c. Between subsidiaries.

Note 3: The transaction terms with the related party are not significantly different from those to third parties.

Note 4: For assets and liabilities, the amount is shown as a percentage to consolidated total assets as of December 31, 2018, while revenue, costs and expenses are shown as a percentage to consolidated total operating revenue for the year ended December 31, 2018.

(Concluded)

97