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DELTA Annual Report 2012

Jun 26, 2013

52000_rns_2013-06-26_be9d36cb-5254-4b4f-9c0f-53095b2936dd.pdf

Annual Report

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DELTA ELECTRONICS, INC. 2012 ANNUAL REPORT

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Table of Contents

  • 01 A Letter to Our Shareholders

  • 07 Corporate Governance

  • 09 Consolidated Financial Highlights

  • 10 Financial Report

  • 13 Balance Sheets

  • 15 Statements of Income

  • 16 Statements of Changes in Stockholders Equity

  • 19 Statements of Cash Flows

  • 21 Notes to Financial Statements

A Letter to Our Shareholders

Dear Shareholders:

2012 global economy was marked by uncertainty and a continued lack of market confidence. Delta nevertheless delivered strong performance thanks to the efforts of our employees. In addition to revenues growth, Delta saw a sharp jump in profitability. Delta's consolidated revenues in 2012 amounted to 171.8 Billion NTD, 6% increase on the previous year. Operating profit was $42.2 Billion NTD, up 22% from last year with a gross margin of 24.5%. Net operating profit was 17.4 Billion NTD, up 32% from last year and accounted for 10.1% of total revenues. Net profit after tax increased by 47% to 16.1 Billion NTD compared to last year and the net operating profit margin was 9.4%. Earning per share (EPS) in 2012 was 6.68 NTD.

"Care for the Environment, Energy-saving and Our Green Earth" has been the overriding business philosophy of Delta for decades and a core corporate element of our culture. Delta has not only cemented our leadership and developed new opportunities in the power supply and component ODM industry, but has also actively expanded into systems and solutions. By drawing on our thorough understanding of customer requirements, innovative technologies and products, and seamless integration of software and hardware, we create more environmentally friendly, comfortable and intelligent applications that enhance Delta's brand value. Important changes were made to Delta's corporate governance structure and management team last year to strengthen the company's foundations for future development. The following is a brief summary of key developments in our business and organization over the last year as well as our vision for the future.

In the power supply and components field, Delta has been the world leader by market share of power supplies and DC brushless fan motors for many years. We have also continued to introduce our core technologies and innovative R&D results into more applications, while improving their energy conversion efficiency and recycling. Delta has not only continued to maintain our leadership in the communications, industrial, automotive and consumer electronics industries, but has also made major gains in the emerging cloud application, medical and electric vehicle markets last year. Delta successfully developed the world's first titanium-grade server power supply with 96% efficiency. Delta also earned orders from large data center customers such as Google, Facebook and Amazon, and Delta now owns more than 50% of the global server power supply market. Our entry into the medical imaging device market progressed smoothly as well. New products, such as power supplies for medical X-ray machines, are now shipping and creating higher added value. In 2011, Delta began working on onboard chargers for electric vehicles. Last year, Delta released a new product with a conversion efficiency of up to 95% that is also lighter, thinner, more compact and more powerful

01

than competing products. We are now officially a tier-1 supplier to the top 3 car brands in the U.S., and we anticipate strong business growth in this area.

Delta’s Fan & Thermal Management Business Group leads the industry in slim design and mass production technology. We are also actively leveraging low-power consumption and lownoise designs to extend our product lines into smart air ventilation fans, hot-air blowers and thermal exchangers. These products will allow the general public to enjoy the high quality of life provided by green technology while saving energy and reducing carbon emissions. Delta is currently the only company to have Taiwan's Energy Label certification for its complete range of smart air ventilation fans. Cyntec, a Delta wholly-owned subsidiary, specializes in the development of highly integrated miniaturized components and modules. The company has won customer recognition for its responsiveness, technology, and mass production capability. The popularity of handheld electronic devices, the rapid development of the cloud service industry, the general public's increasing demand for quality of life as well as healthcare services all indicate that Delta's power supply and components business should continue to perform well.

Delta is engaged in a variety of energy management fields, including products, systems and turnkey solutions for industrial automation, energy systems, electric vehicle control, power and charging systems, large wind turbine converters and photovoltaic inverters. All of these products delivered a remarkable performance last year. Delta Industrial Automation developed a number of innovative products and turnkey solutions last year including robots and energyefficient industrial automation solutions which integrate lighting, injection molding machines, elevators, air-conditioning, air compressors and factory power management systems. In addition, Delta also developed the first digital control system solution (DCS) for CNCs. The new in-house developed DCS is a complete, responsive and flexible solution that integrates control panel, servo drive, spindle motor and servo motor, supports multi-tasking and delivers speed, precision and stability. Delta also developed a new range of highly competitive medium-sized programmable controller products. All of these demonstrate innovative R&D by Delta Industrial Automation to provide customers with energy-saving, high-performance products and solutions that take industries into the new age of smart, green energy.

Delta's telecom power supplies have always been the industry leader with an energy conversion efficiency of up to 97%. Last year, we integrated our world-leading core technologies in energy management and thermal engineering with environmental management and rack design solutions to offer a total solution for next-generation data center infrastructure. The new integrated solution for data center infrastructure features UPS, power distribution,

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environmental monitoring and precision air-conditioning with the advantages of modularity, flexible integration, ease of management and high reliability. Enterprise customers can build their own "Green Data Center" for significant savings in energy and operating costs. Apart from large data centers, Delta is actively investing in the market for private enterprise clouds by developing racks that integrate power supply, cooling and UPS products. These products allow customers to combine Delta racks and servers to greatly speed up the rollout process and have won unanimous compliment from our customers.

Delta made breakthroughs in electric vehicle charging solutions last year. A grant was received from the U.S. Department of Energy to work with North American electricity companies and automotive manufacturers on joint development of home electric vehicle charging equipment under a smart grid architecture. The grant is intended to reduce the cost of communication between charging equipment and electrical grids. Delta also participates in Norway's charging grid initiative by building a full-scale electric vehicle charging facilities along the 3,000 km long E6 highway between Norway and Sweden. Delta's R&D integration ability, product innovation and design abilities have repeatedly won international recognition. The team's efforts will undoubtedly become evident as the electric vehicle industry prospers in Taiwan and overseas.

In solar energy market, reductions in government subsidies and global oversupply had severe adverse impact on the industry. Nevertheless, the drop in market prices is positive for the industry as a whole over the long-term and will encourage the popularization of PV technology. Delta therefore made the decision to merge DelSolar, a Delta subsidiary, into Neo Solar Power, through share swap scheme. The new, larger company will be more competitive and will become the largest PV cell maker in Taiwan and the second largest in the world. Delta hopes that this will accelerate the replacement of dirty fossil fuels with clean and cost-effective renewable energy.

In smart green life, the most significant progress has been in the network communications and display solutions business. Delta's network communications subsidiary, Delta Networks, has grown steadily over the years by balancing the demands of high-end enterprise and SOHO markets. The rapid growth of cloud and smart applications brings with it increasing demand for network communications and makes Delta Networks one of Delta's key engines for growth. Delta's display solutions business has not only maintained its leadership in the high-end projection systems market, but has also integrated art and aesthetics into everyday life through integrated software technologies. In 2012, Delta set up 12 large cinema-grade projectors outside of the Red House in Taipei. The exterior of the unique octagonal building formed a large

03

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outdoor 3D projection stage, and audio control technology was used to combine the visual effects with the architecture. The audience was able to relive the medal-winning performances of Chinese Taipei Olympic athletes and enjoy the opening ceremony at the London Olympic Stadium. This authentic experience of the world's greatest athletics event provided an excellent demonstration of smart green life.

LED is the trend for future lighting and it is one of Delta's new business units. Delta spent six months last year on the Peng Bay Bridge scenic lighting project, installing 2,600 LED lights of various types. The lighting system was officially activated in October, 2012. The design of the lighting had to balance the needs of eco-conservation, lighting technology, tourism and recreation. The eco-friendly energy lighting and variable 7-colored LED lighting now transforms the Peng Bay Bridge into a glowing rainbow at night. The bridge is now a part of life for residents and tourists alike, emphasizing the endless possibilities of advanced technology in smart green living. While high costs continue to hamper LED adoption, Delta believes that LED, with its advantages in energy-saving, long life, mercury-free and a high color rendering property, will soon replace conventional lighting in the future and make a contribution to the environment.

A keen understanding of market trends and readiness to exploit new business opportunities have always been one of the keys to Delta's success. Delta has continued to actively adjust our overall strategy and take advantage of emerging opportunities in response to changes in the industrial structure and economic climate. The Delta’s business model continues to evolve as well. From Delta Inside to Delta Outside, from IT to ET (Energy Technology), from ODM to brand-oriented integrated energy-saving services, these all trace how Delta has grown in response to changes in the external environment. While as Delta's business units concentrate their energies on developing innovative products and providing customers with even better value-added solutions, we are sparing no effort when it comes to integrating and applying products and technologies across different business units. Take the most advanced intelligent monitoring and management system iPEMSTM for example, it integrates our expertise in video conferencing, sensing, network communications and power management was combined together to support the concurrent monitoring of more than 10 million data points for real-time data collecting, smart data analysis and ultra high-definition data visualization. The iPEMSTM can be used in a variety of different industrial monitoring and management applications such as energy production and consumption, smart factories, large data centers, smart grids, traffic and communications. This advanced high-performance, high-reliability, flexible and eco-friendly energy-saving solution helps managers make right decisions quickly. Green building is another example. We integrated renewable energy applications, energy management optimization,

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factory energy-saving automation and home energy-saving products into a solution, and optimized architectural design, choice of building materials, natural lighting and insulation, air-conditioning and hot water systems. The result not only greatly reduces the consumption of water and power, but also offers more comfortable indoor temperatures, humidity and air quality. These system solutions have translated into improved productivity and environmental quality. Delta has built a number of green factories, offices and laboratories over the years that have proven to be great successes. Building upon our solid foundations and exploiting the synergies from collaborative development to provide even more influential total integrated solutions is now Delta's main direction of development for the future.

The success of our integrated solutions business depends on in depth understanding of the customer's problems and the technology to solve them. Delta has made long-term investments in cultivating R&D expertise and innovation. We also approach the market carefully to understand customer requirements and establish our brand value. Having previously been named one of the first "Top 20 Innovation Enterprises in Taiwan" by the Industrial Development Bureau of the Ministry of Economic Affairs in 2011, Delta earned the Outstanding Innovative Enterprise Award again last year. The top award in the National Industrial Innovation Awards recognized Delta's embrace of energy-saving, sustainability and value creation as core values as well as our innovations in system integration, design, channel, brand and service. Last year, Delta was once again named as one of the top 20 international brands in Taiwan by Interbrand, making it the only large electronics company in Taiwan to receive this accolade with an industrial brand for two successive years. 2010 was Year One for the Delta brand. After an analysis of global trends and the Delta core values, "Smarter. Greener. Together." was defined as the Delta brand essence last year. Smarter represents our continued advancement in technology in response to customers' expectations of the Delta brand on a functional level. Greener embodies our commitment to the business philosophy of "Care for the Environment, Energy-saving and Our Green Earth ". Together describes the Delta management philosophy of working together with customers to establish a long-term partnership and grow together. We hope these three English words will effectively communicate the Delta value, establish good will in business, and ultimately ensure our continued competitiveness and guide our sustainable development.

Delta received many accolades from customers such as ASUS, SONY, Dell and Lenovo in 2012. After receiving the "Best CEO in Technology/Hardware", "Best Investor Relations" and "Best IR Professional" awards from Institutional Investor magazine in 2011, Delta's management team was presented with the "Best investor relations officer" and "Best investor relations by a CEO or president" awards by IR Magazine in 2012. Delta's investor relations

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ranking in Greater China also jumped into 3rd place, showing that Delta's long-term efforts in corporate governance and investor relations is paying off. Delta's commitment to corporate social responsibility has been well recognized too: Delta won the CommonWealth Magazine's "Most Admired Company" award for the 11th consecutive year and the Corporate Citizenship Award for the 6th consecutive year, the Global Views Magazine's top prize in the education category for the "2012 Corporate Social Responsibility Awards", the Securities & Futures Institute's best possible A++ rating for disclosure and transparency by a publicly listed company, was included again in the "World Index" and "Asia-Pacific Index" of the Dow Jones Sustainability Indexes, and was named global "Industry leader" in the ITC Electronic Equipment sector. Delta also became the first Taiwanese-owned electronics company to receive the "Outstanding Enterprise Award" in China’s Corporate Social Responsibility Ranking last year and has now been named one of the Top 50 private enterprises in China for three consecutive years. The awards provide ample proof of how highly regarded Delta is in the China market.

Delta constantly strives toward the best practices of corporate governance, although we might already be considered a role-model in Taiwan. The Delta Board of Directors was restructured last year, and the supervisors were replaced by an Audit Committee and Remuneration Committee made up of three independent directors. The move marked an important step towards best corporate governance. Changes were made to the Delta management team last year as well. Mr. Bruce Cheng, our beloved founder, announced his retirement last year and resigned his chairmanship to become honorary chairman. The responsibility of managing the company is now shared by me as new Chairman, Vice Chairman Mark Ko, CEO Ping Cheng and COO Johnson Lee. We present Mr. Bruce Cheng with our highest regards for devoting more than forty years of his life to laying the foundations for Delta's success. We are also grateful to our colleagues for their long-term contributions to the company, and also to our customers, suppliers, shareholders and the general public for their support and belief in Delta. We will strive to continue to lead all Delta employees in the direction set for the company and implement the growth strategies we have developed. We will do our best to realize our goals, accomplishing our corporate mission, pass on the Delta value, and forge Delta into an internationally respected enterprise.

Yancey Hai, Chairman

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Corporate Governance

Delta believes that high quality corporate governance is the best way to ensure that the company always delivers excellent performance and provides an optimum balance for all stakeholders' interests. Corporate governance is therefore our top priority.

At Delta, the board currently consists of thirteen directors, including three independent directors. The role of CEO and chairman has been split since 2004. To enhance the board's responsibility and trust, it convenes at least once quarterly to review the company's performance and discuss important strategic issues. In 2012, the board convened on three occasions before election and four after it. The overall attendance rate was 97.5%.

Key resolutions passed by the board are published in a timely manner on the Market Observation Post System of the Taiwan Stock Exchange and in the corporate governance section of the Delta website. Other relevant documents are also provided online for reference.

The board has organized a Compensation Committee consisting of three independent directors, to evaluate the performance-linked compensation of the company’s directors and executive officers. An Audit Committee was set up in 2012 to review the financial reports, performance of accountants, implementation of internal control systems, compliance with regulations and risk management. The committee is composed of three independent directors. Apart from the board meetings and committee meetings, the independent directors also take part in Delta’s internal strategy meetings to ensure they are familiar with the company's current activities and can provide appropriate advice when necessary.

The core activities of the company are R&D, manufacturing and sales. We do not participate in high-risk and highly leveraged investments. Delta consistently monitors capital on the market and interest rates, and makes cautious funding decisions. Simultaneously, through our auditing, finance, legal and intellectual property departments, and others, we are able to assess and manage risks associated with all operations to maintain company sustainability.

Delta’s efforts in corporate governance continued to win outside recognition in 2012. In 2012, for the second consecutive year, Delta was selected for two of the prestigious Dow Jones Sustainability Indexes—the DJSI World Index and the DJSI Asia / Pacific Index. Delta was also ranked first among the 29 leading companies in the Electronic Equipment sector and named as “Sector Leader.” We were awarded “Most Admired Company” in the electronics industry and received a rating of A++ for transparency and disclosure from the Securities and Futures

07

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Institute in Taiwan. We received “Best Investor Relations Award” from FinanceAsia Magazine and “Best IR Professional” from Institutional Investor Magazine. In addition, we were listed on IR Magazine's short list in eight categories and ranked third for best IR practices in 2012 for our outstanding IR performance, while Chairman Mr. Yancey Hai was honored with the “Best CEO Award.” We shall continue to take actions such as strengthening the organizational functions of the board, to better ensure sound corporate governance at Delta.

Consolidated Financial Highlights

(in NT$ million, except otherwise indicated)

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

2012 2011
Sales 171,760 162,474
Gross profit 42,160 34,616
Gross margin 24.5% 21.3%
Operating profit 17,352 13,162
Operating Margin 10.1% 8.1%
Net Income After Tax 16,110 10,991
Net Margin 9.4% 6.8%
EPS (NT$) 6.68 4.58
Total Assets 181,889 193,194
Total Shareholders' Equity 99,404 92,486
ROE (%) 20.0% 14.3%
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Revenues Net Profits
NT$ million NT$ million
180,000 171,302 162,474 171,760 180,000 16,110
15,754
160,000 160,000
142,645
140,000 140,000
124,120
120,000 120,000 10,251 11,657 10,991
100,000 100,000
80,000 80,000
60,000 60,000
40,000 40,000
20,000 20,000
-
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
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Return on Stockholders' Equity Earnings Per Share
NT$
10.00
33.0%
9.00
28.0%
8.00
23.0% 22.7% 7.00 6.69 6.68
19.2% 20.0%
17.4%
6.00
18.0% 5.20
14.3% 5.00 4.60 4.58
13.0%
4.00
8.0% 3.00
2.00
3.0%
1.00
0%
0.00
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
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09

Financial Report

DELTA ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2012 AND 2011

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR12003974

To Delta Electronics, Inc.

We have audited the accompanying consolidated balance sheets of Delta Electronics, Inc. and subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of income, of changes in stockholders' equity and of cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. As explained in Note 2. 1)(2), we did not audit the 2011 financial statements of certain consolidated subsidiaries, which statements reflect total assets of $1,051,049,000, constituting 0.54% of the consolidated total assets as of December 31, 2011, and total operating revenues of $3,291,816,000, constituting 2.03% of the consolidated operating revenues for the year then ended. In addition, we did not audit the financial statements of certain long-term equity investments, accounted for under the equity method. Long-term equity investments in these companies amounted to $5,662,006,000 and $5,527,955,000, constituting 3.11% and 2.86% of the consolidated total assets as of December 31, 2012 and 2011, respectively, and total investment income was $871,618,000 and $499,987,000, constituting 3.63% and 2.87% of the consolidated income before income tax and minority interest for the years then ended, respectively. Those statements were audited by other auditors whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts and the information disclosed in Note 11. 2) included for such subsidiaries and investee companies, is based solely on the reports of the other auditors.

We conducted our audits in accordance with the “Rules Governing Examination of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China. Those standards and rules require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

11

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In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Delta Electronics, Inc. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for the years then ended in conformity with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” and generally accepted accounting principles in the Republic of China.

Delta Electronics, Inc. adopts International Financial Reporting Standards, International Accounting Standards, and relevant interpretations and interpretative bulletins (IFRSs) that are ratified by the Former Financial Supervisory Commission, Executive Yuan, R.O.C. (FSC) in the preparation of its financial statements effective January 1, 2013. Information relating to the adoption of IFRSs is disclosed in Note 13 under the requirements of Jin-Guan-Zheng-Shen-Zi Order No. 0990004943 of FSC, dated February 2, 2010. The IFRSs may be subject to changes during the time of transition; therefore, the actual impact of IFRSs adoption on Delta Electronics, Inc. may also change.

The consolidated financial statements of Delta Electronics, Inc. and subsidiaries as of and for the year ended December 31, 2012, expressed in US dollars, are presented solely for the convenience of the reader and were translated from the financial statements expressed in New Taiwan dollars using the exchange rate of NT$29.040 to US$1.00 at December 31, 2012. This basis of translation is not in accordance with generally accepted accounting principles in the Republic of China.

PricewaterhouseCoopers, Taiwan

March 11, 2013

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

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

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31,

(EXPRESSED IN THOUSANDS OF DOLLARS)

ASSETS USDollars
NewTaiwan Dollars
Notes
2012 (Unaudited)
2012
2011
4(1)
$ 1,759,509
$ 51,096,128
$ 67,695,906
4(2)
25,251
733,285
2,342
4(5)
20,674
600,373
524,013
10(9)
1,374
39,901
115,111
4(6)
-
-
86,180
45,440
1,319,593
1,330,220
4(3)
1,204,493
34,978,476
34,708,687
5
42,420
1,231,877
816,456
22,797
662,035
2,082,657
6
1,459
42,384
143,061
4(4)
532,405
15,461,032
19,126,113
95,815
2,782,463
2,384,204
4(13)
415,838
12,075,952
-
4(23)
20,303
589,592
597,914
9,527
276,657
394,718
4,197,305
121,889,748
130,007,582
4(2)
8,523
247,513
1,820,525
4(5)
81,023
2,352,916
125,859
4(6)
57,350
1,665,433
4,157,228
4(7)
218,758
6,352,742
5,911,784
3,975
115,434
112,700
4(6)
1,033
30,000
-
6
54
1,552
1,548
370,716
10,765,590
12,129,644
4(8)
and 6
136,348
3,959,555
1,779,860
818,981
23,783,220
20,101,112
710,516
20,633,371
23,195,634
82,918
2,407,932
2,168,664
52,095
1,512,840
1,577,409
314,388
9,129,829
8,903,472
7,786
226,107
237,344
72,113
2,094,147
1,851,522
6,555
190,349
190,800
3,104
90,146
34,516
21,367
620,497
620,497
2,226,171
64,647,993
60,660,830
(
1,117,681 ) (
32,457,450 ) (
30,318,850 )
(
21,064 ) (
611,693 ) (
23,486 )
114,655
3,329,580
6,599,291
1,202,081
34,908,430
36,917,785
4(9)
14,218
412,890
-
11,875
344,861
628,035
10(10)
236,093
6,856,128
6,898,970
175
5,094
9,299
4(10)
141,675
4,114,239
4,560,628
404,036
11,733,212
12,096,932
4(11)
44,037
1,278,851
205,337
4(12)
-
-
-
5,258
152,684
103,306
6
37,902
1,100,676
845,367
2,046
59,406
888,026
89,243
2,591,617
2,042,036
$ 6,263,381
$ 181,888,597
$ 193,193,979
Current Assets
Cash and cash equivalents
Financial assets at fair value through profit or loss - current
Available-for-sale financial assets - current
Derivative financial assets for hedging - current
Financial assets carried at cost - current
Notes receivable, net
Accounts receivable, net
Accounts receivable, net - related parties
Other receivables, net
Other financial assets - current
Inventories, net
Prepayments
Non-current assets classified as held for sale
Deferred income tax assets - current
Other current assets
Total current assets
Funds and Investments
Financial assets at fair value through profit or loss - non-current
Available-for-sale financial assets - non-current
Financial assets carried at cost - non-current
Long-term equity investments accounted for under the equity method
Cash surrender value of life insurance
Prepaid for long-term investments
Other financial assets - non-current
Total funds and investments
Property, Plant and Equipment, Net
Cost
Land
Buildings
Machinery and equipment
Molding equipment
Computer and communication equipment
Testing equipment
Transportation equipment
Office equipment
Leasehold improvements
Other equipment
Revaluation increments
Cost and revaluation increments
Less: Accumulated depreciation
Accumulated impairment loss
Construction in progress and prepayments for equipment
Total property, plant and equipment, net
Intangible Assets
Trademarks
Patents
Goodwill
Deferred pension costs
Other intangible assets
Total intangible assets
Other Assets
Assets leased to others
Idle assets
Refundable deposits
Deferred expenses
Other assets - other
Total other assets
TOTALASSETS

(Continued)

13

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DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) DECEMBER 31,

(EXPRESSED IN THOUSANDS OF DOLLARS)

USDollars NewTaiwan NewTaiwan Dollars
LIABILITIESANDSTOCKHOLDERS' EQUITY Notes 2012 (Unaudited) 2012 2011
Current Liabilities
Short-term loans 4(14) $ 173,460 $ 5,037,267 $ 17,599,492
Financial liabilities at fair value through profit or loss - current 4(15) 905 26,286 4,257
Derivative financial liabilities for hedging - current 10(9) 508 14,750 46,873
Accounts payable 925,070 26,864,029 30,271,738
Accounts payable - related parties 5 6,283 182,467 118,374
Income tax payable 4(23) 79,093 2,296,864 2,092,919
Accrued expenses 392,212 11,389,826 11,268,694
Other payables 96,686 2,807,771 2,983,192
Receipts in advance 50,097 1,454,815 1,051,540
Long-term liabilities - current portion 4(16) 2,511 72,933 857,832
Liabilities directly associated with non-current assets classified as held
for sale 4(13) 235,442 6,837,219 -
Other current liabilities 58,918 1,710,975 2,457,898
Total current liabilities 2,021,185 58,695,202 68,752,809
Long-term Liability
Long-term loans 4(16) 567,890 16,491,517 24,862,247
Reserve
Land value incremental reserve 4(8) 4,128 119,864 119,864
Other Liabilities
Accrued pension liabilities 4(17) 94,574 2,746,430 2,617,949
Guarantee deposits received 2,987 86,753 77,332
Deferred income tax liabilities - non-current 4(23) 142,838 4,148,016 3,867,305
Other liabilities - other 6,783 196,989 410,804
Total other liabilities 247,182 7,178,188 6,973,390
Total liabilities 2,840,385 82,484,771 100,708,310
Stockholders' Equity
Capital
Common stock 4(18) 833,739 24,211,780 24,033,974
Capital Reserves 4(19)
Paid-in capital in excess of par value of common stock 495,341 14,384,691 13,242,489
Capital reserve from conversion of convertible bonds 353,079 10,253,416 10,253,416
Capital reserve - other 60,778 1,765,000 3,013,550
Retained Earnings
Legal reserve 4(20) 418,859 12,163,682 11,064,579
Special reserve 56,079 1,628,536 4,796,006
Undistributed earnings 4(21) 785,327 22,805,885 13,045,300
Other Adjustments to Stockholders' Equity
Cumulative translation adjustments ( 147,632 ) ( 4,287,240 ) ( 1,716,140 )
Unrecognized pension cost ( 9,791 ) ( 284,342 ) ( 263,401 )
Unrealized gain or loss on financial instruments ( 9,692 ) ( 281,431 ) ( 176,551 )
Asset revaluations 4(8) 18,167 527,556 527,556
Amount recognised directly in equity relating to non-current assets held
for sale 4(13) 26,808 778,508 -
Total Parent Company Stockholders' Equity 2,881,062 83,666,041 77,820,778
Minority interest 541,934 15,737,785 14,664,891
Total stockholders' equity 3,422,996 99,403,826 92,485,669
Commitments and Contingent Liabilities 7
Subsequent Events 9
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 6,263,381 $ 181,888,597 $ 193,193,979

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 11, 2013.

4

==> picture [596 x 105] intentionally omitted <==

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31,

(EXPRESSED IN THOUSANDS OF DOLLARS, EXCEPT FOR EARNINGS PER SHARE DATA)

Items Notes US Dollars
2012 (Unaudited)
$ 5,841,572

27,359 ) (

10,162 ) (
5,804,051
110,547
5,914,598

4,397,545 ) (

65,257 ) (

4,462,802 ) (
1,451,796

285,264 ) (

190,798 ) (

378,214 ) (

854,276 ) (
597,520
32,038
24,959
1,661
177
53,881
7,431
1,922
444
86,094
208,607

13,502 ) (
-
-

905 ) (

16,708 ) (

31,115 ) (
775,012

115,325 ) (
659,687

66,798 ) (
-
$ 592,889
$ 554,736
38,153
$ 592,889
Before Tax
After Tax
$ 0.3216
0.2738

0.0282 ) (
0.0279 ) (
-
-

0.0159 ) (
0.0159 ) (
$ 0.2775
0.2300
$ 0.3165
0.2693

0.0276 ) (
0.0272 ) (
-
-

0.0155 ) (
0.0155 ) (
$ 0.2734
0.2266		 US Dollars US Dollars New Taiwan Dollars
2012
2011
$ 169,639,243
$ 161,982,404

794,497) (
758,733 )

295,097) (
319,139 )
168,549,649
160,904,532
3,210,275
1,569,807
171,759,924
162,474,339

127,704,709) (
127,106,412 )

1,895,062) (
751,451 )

129,599,771) (
127,857,863 )
42,160,153
34,616,476

8,284,073) (
7,235,206 )

5,540,757) (
4,746,613 )

10,983,334) (
9,472,996 )

24,808,164) (
21,454,815 )
17,351,989
13,161,661
930,370
881,441
724,814
507,550
48,228
75,672
5,132
-
1,564,707
270,860
215,800
1,378,264
55,814
30,892
12,883
-
2,500,172
1,787,658
6,057,920
4,932,337

392,100) (
356,773 )
-
8,248
-
(
9,273 )

26,286) (
8,344 )

485,186 )(
290,028 )

903,572
(
672,666
22,506,337
17,421,332

3,349,038) (
3,121,356 )
19,157,299
14,299,976

1,939,811 )
2,540,948 )
-
205,629
$ 17,217,488
$ 11,964,657
$ 16,109,542
$ 10,991,031
1,107,946
973,626
$ 17,217,488
$ 11,964,657
Before Tax
After Tax
Before Tax
After Tax
$ 9.34
$ 7.95
$ 7.26
$ 5.96

0.82) (
0.81) (
1.19) (
1.06 )
-
-
0.09
0.09

0.46) (
0.46) (
0.41) (
0.41 )
$ 8.06
$ 6.68
$ 5.75
$ 4.58
$ 9.19
$ 7.82
$ 7.12
$ 5.84

0.80) (
0.79) (
1.16) (
1.03 )
-
-
0.08
0.08

0.45) (
0.45) (
0.40) (
0.40 )
$ 7.94
$ 6.58
$ 5.64
$ 4.49		 New Taiwan Dollars New Taiwan Dollars New Taiwan Dollars New Taiwan Dollars New Taiwan Dollars
2012 (Unaudited) 2012 2011
$ 161,982,404

758,733 )

319,139 )
160,904,532
1,569,807
162,474,339

127,106,412 )

751,451 )

127,857,863 )
34,616,476

7,235,206 )

4,746,613 )

9,472,996 )

21,454,815 )
13,161,661
881,441
507,550
75,672
-
270,860
1,378,264
30,892
-
1,787,658
4,932,337

356,773 )
8,248

9,273 )

8,344 )

290,028 )

672,666
17,421,332

3,121,356 )
14,299,976
2,540,948 )
205,629
$ 11,964,657
$ 10,991,031
973,626
$ 11,964,657
Before Tax
After Tax
$ 7.26
$ 5.96

1.19) (
1.06 )
0.09
0.09

0.41) (
0.41 )
$ 5.75
$ 4.58
$ 7.12
$ 5.84

1.16) (
1.03 )
0.08
0.08

0.40) (
0.40 )
$ 5.64
$ 4.49		 2011
5,841,572
27,359 ) (
10,162 ) (
5,804,051
110,547
5,914,598
4,397,545 ) (
65,257 ) (
4,462,802 ) (
1,451,796
285,264 ) (
190,798 ) (
378,214 ) (
854,276 ) (
597,520
32,038
24,959
1,661
177
53,881
7,431
1,922
444
86,094
208,607
13,502 ) (
-
-
905 ) (
16,708 ) (
31,115 ) (
775,012
115,325 ) (
659,687
66,798 ) (
-
592,889
554,736
38,153
592,889
After Tax
0.2738

0.0279 ) (
-

0.0159 ) (
0.2300
0.2693

0.0272 ) (
-

0.0155 ) (
0.2266		 169,639,243
794,497) (
295,097) (
168,549,649
3,210,275
171,759,924
127,704,709) (
1,895,062) (
129,599,771) (
42,160,153
8,284,073) (
5,540,757) (
10,983,334) (
24,808,164) (
17,351,989
930,370
724,814
48,228
5,132
1,564,707
215,800
55,814
12,883
2,500,172
6,057,920
392,100) (
-
-
(
26,286) (
485,186 )(
903,572
(
22,506,337
3,349,038) (
19,157,299
1,939,811 )
-
17,217,488
16,109,542
1,107,946
17,217,488
After Tax
$ 7.95

0.81) (
-

0.46) (
$ 6.68
$ 7.82

0.79) (
-

0.45) (
$ 6.58		 161,982,404
758,733 )
319,139 )
160,904,532
1,569,807
162,474,339
127,106,412 )
751,451 )
127,857,863 )
34,616,476
7,235,206 )
4,746,613 )
9,472,996 )
21,454,815 )
13,161,661
881,441
507,550
75,672
-
270,860
1,378,264
30,892
-
1,787,658
4,932,337
356,773 )
8,248
9,273 )
8,344 )
290,028 )
672,666
17,421,332
3,121,356 )
14,299,976
2,540,948 )
205,629
11,964,657
10,991,031
973,626
11,964,657
After Tax
$ 5.96

1.06 )
0.09

0.41 )
$ 4.58
$ 5.84

1.03 )
0.08

0.40 )
$ 4.49
$ $ $
$ $ $
$ $ $
Before Tax
$ 0.3216

0.0282 ) (
-

0.0159 ) (
$ 0.2775
$ 0.3165

0.0276 ) (
-

0.0155 ) (
$ 0.2734		 Before Tax
$ 9.34

0.82) (
-

0.46) (
$ 8.06
$ 9.19

0.80) (
-

0.45) (
$ 7.94		 Before Tax
$ 7.26

1.19) (
0.09

0.41) (
$ 5.75
$ 7.12

1.16) (
0.08

0.40) (
$ 5.64

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 11, 2013.

15

Total 87,391,993 30,154 597,032 - - 12,480,034 ) 316,336 ) 95,369 150,774 ) 716,811 ) 2,541,927 1,397,758 2,130,734 11,964,657 92,485,669
$ $
( ( ( (
Minority interest $ 11,560,531 - - - - - - - - - - - 2,130,734 973,626 $ 14,664,891
Amounts recognised directly in equity relating to non-current assets held for sale $ - - - - - - - - - - - - - - $ -
Asset revaluations $ 432,187 - - - - - - 95,369 - - - - - - $ 527,556
DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF DOLLARS) Retained Earnings Unrealized gain Cumulative
or loss on		 Undistributed
translation
Unrecognized
financial		 Special reserve
earnings
adjustments
pension cost
instruments		 $ -
$ 20,905,730
($ 5,862,383 )
($ 112,627 )
$ 746,818		 -
-
-
-
-		 -
-
-
-
-		 -
(
1,575,421 )
-
-
-		 4,796,006
(
4,796,006 )
-
-
-		 -
( 12,480,034 )
-
-
-		 -
-
-
-
-		 -
-
-
-
-		 -
-
-
(
150,774 )
-		 -
-
-
-
(
716,811 )		 -
-
2,541,927
-
-		 -
-
1,604,316
-
(
206,558 )		 -
-
-
-
-		 -
10,991,031
-
-
-		 $ 4,796,006
$ 13,045,300
($ 1,716,140 )
($ 263,401 )
($ 176,551 )		 (Continued)
Legal reserve $ 9,489,158 - - 1,575,421 - - - - - - - - - - $ 11,064,579
Capital reserves $ 26,284,595 30,154 511,042 - - - (
316,336 )		 - - - - - - - $ 26,509,455
Common stock 23,947,984 - 85,990 - - - - - - - - - - - 24,033,974
$ $
2011 New Taiwan Dollars Balance at January 1, 2011 Compensation cost amortization of employees' stock option assumed from subsidiary due to merger Employees' stock options Distribution of 2010 earnings (Note a) Legal reserve Special reserve Cash dividends Change in ownership percentage of long-term equity investments accounted for under equity method Adjustment for land value appraisal increament Unrecognized pension cost Unrealized loss on available-for-sale financial assets Change in cumulative translation adjustment Change in stockholders' equity for investee companies accounted for under the equity method Change in minority interest Consolidated net income for the year Balance at December 31, 2011
Total 92,485,669 1,187,011 - - 8,417,324 ) 49,516 ) 229,399 ) 20,941 ) 31,866 2,179,519 ) 586,457 ) - 35,052 ) 17,217,488 99,403,826
$ $
( ( ( ( ( ( (
Minority interest $ 14,664,891 - - - - - - - - - - - (
35,052 )		 1,107,946 $ 15,737,785
Amounts recognised directly in equity relating to non-current assets held for sale $ - - - - - - - - - - - 778,508 - - $ 778,508
Asset revaluations $ 527,556 - - - - - - - - - - - - - $ 527,556
DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF DOLLARS) Retained Earnings Unrealized gain Cumulative
or loss on		 Capital
Undistributed
translation
Unrecognized
financial		 Common stock
reserves
Legal reserve
Special reserve
earnings
adjustments
pension cost
instruments		 2012 New Taiwan Dollars Balance at January 1, 2012
$ 24,033,974
$ 26,509,455
$ 11,064,579
$ 4,796,006
$ 13,045,300
($ 1,716,140 )
($ 263,401 )
($ 176,551 )		 Employees' stock options
177,806
1,009,205
-
-
-
-
-
-		 Distribution of 2011 earnings (Note b) Legal reserve
-
-
1,099,103
-
(
1,099,103 )
-
-
-		 Reversal of special reserve
-
-
-
(
3,167,470 )
3,167,470
-
-
-		 Cash dividends
-
-
-
-
(
8,417,324 )
-
-
-		 Change in ownership percentage of long-term equity investments accounted for under equity method
-
(
49,516 )
-
-
-
-
-
-		 Disposal of long-term equity investments
-
(
239,936 )
-
-
-
10,537
-
-		 Unrecognized pension cost
-
-
-
-
-
-
(
20,941 )
-		 Unrealized gain on available-for-sale financial assets
-
-
-
-
-
-
-
31,866		 Change in cumulative translation adjustment
-
-
-
-
-
(
2,179,519 )
-
-		 Change in stockholders' equity of investee companies accounted for under the equity method
-
-
-
-
-
(
449,711 )
-
(
136,746 )		 Change in amounts recognised directly in equity relating to non-current assets held for sale
-
(
826,101 )
-
-
-
47,593
-
-		 Change in minority interest
-
-
-
-
-
-
-
-		 Consolidated net income for the year
-
-
-
-
16,109,542
-
-
-		 Balance at December 31, 2012
$ 24,211,780
$ 26,403,107
$ 12,163,682
$ 1,628,536
$ 22,805,885
($ 4,287,240 )
($ 284,342 )
($ 281,431 )		 Note a: Directors' and supervisors' remuneration amounting to $16,700 and employees' bonus amounting to $2,914,390 had been deducted from the Consolidated Statement of Income in 2010. Note b: Directors' and supervisors' remuneration amounting to $16,700 and employees' bonus amounting to $1,536,340 had been deducted from the Consolidated Statement of Income in 2011. (Continued)

17

Total 3,184769 40,875 - - 289,853 ) 1,705 ) 7,899 ) 721 ) 1,097 75,052 ) 20,196 ) - 1,208 ) 592,889 3,442,996
$ ( ( ( ( ( ( ( $
Minority interest $ 504,989 - - - - - - - - - - - (
1,208 )		 38,153 $ 541,934
Amounts recognised directly in equity relating to non-current assets held for sale $ - - - - - - - - - - - 26,808 - - $ 26,808
Asset revaluations $ 18,167 - - - - - - - - - - - - - $ 18,167
DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF DOLLARS) Retained Earnings Unrealized gain Cumulative
or loss on		 Undistributed
translation
Unrecognized
financial		 Legal reserve
Special reserve
earnings
adjustments
pension cost
instruments		 $ 381,012
$ 165,152
$ 449,218
($ 59,096 )
($ 9,070 )
($ 6,079 )		 -
-
-
-
-
-		 37,847
-
(
37,847 )
-
-
-		 -
(
109,073 )
109,073
-
-
-		 -
-
(
289,853 )
-
-
-		 -
-
-
-
-
-		 -
-
-
363
-
-		 -
-
-
-
(
721 )
-		 -
-
-
-
-
1,097		 -
-
-
(
75,052 )
-
-		 -
-
-
(
15,486 )
-
(
4,710 )		 -
-
-
1,639
-
-		 -
-
-
-
-
-		 -
-
554,736
-
-
-		 $ 418,859
$ 56,079
$ 785,327
($ 147,632 )
($ 9,791 )
($ 9,692 )		 The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 11, 2013.
Capital reserves 912,860 34,752 - - - 1,705 ) 8,262 ) - - - - 28,447 ) - - 909,198
$ ( ( ( $
Common stock 827,616 6,123 - - - - - - - - - - - - 833,739
$ $
2012 USD Dollars (Unaudited) Balance at January 1, 2012 Employees' stock options Distribution of 2011 earnings (Note b) Legal reserve Reversal of special reserve Cash dividends Change in ownership percentage of long-term equity investments accounted for under equity method Disposal of long-term equity investments Unrecognized pension cost Unrealized gain on available-for-sale financial assets Change in cumulative translation adjustment Change in stockholders' equity of investee companies accounted for under the equity method Change in amounts recognised directly in equity relating to non-current assets held for sale Change in minority interest Consolidated net income for the year Balance at December 31, 2012

==> picture [596 x 105] intentionally omitted <==

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, (EXPRESSED IN THOUSANDS OF DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated net income
Adjustments to reconcile net income to net cash provided by operating activities
Extraordinary gain
Changes in unrealized valuation of financial assets
(
Changes in unrealized valuation of financial liabilities
Provision for doubtful accounts
Provision for inventory obsolescence and market price decline
(Reversal of) loss on purchase commitment
(
Gain on disposal of investments
(
Investment income recognized under equity method
(
Cash dividends received from investee companies accounted for under the equity method
Depreciation (including assets leased to others)
Amortization
Loss on disposal of property, plant and equipment, net
Changes in assets and liabilities
Notes receivable
Accounts receivable
(
Accounts receivable - related parties
(
Other receivables
Inventories
Prepayments
(
Deferred tax assets
(
Other current assets
Other assets - other
Accounts payable
(
Accounts payable - related parties
Income tax payable
Accrued expenses
Other payables
Receipts in advance
Other current liabilities
(
Accrued pension liabilities
Deferred tax liabilities
Other liabilities
(
Net cash provided by operating activities		 US Dollars
New Taiwan Dollars
2012(Unaudited)
2012
2011
$ 592,889
$ 17,217,488
$ 11,964,657
-
205,629

684 )
(
19,868 )
65,170
697
20,236
7,538
3,828
111,172
97,466
254
7,371
678,673

5,050 )
(
146,653 )
202,043

53,881 )
(
1,564,707 )
(
270,860 )

24,959 )
(
724,814 )
(
507,550 )
10,344
300,395
598,969
225,431
6,546,504
5,450,880
51,049
1,482,457
1,060,370
45
1,306
11,094
326
9,472
331,663

17,178 )
(
498,856 )
(
640,091 )

18,219 )
(
529,088 )
3,229,681
46,258
1,343,320
(
811,394 )
114,902
3,336,742
(
2,660,567 )

68,934 )
(
2,001,826 )
(
778,021 )

7,185 )
(
208,660 )
(
250,567 )
4,065
118,043
49,265
10,242
297,434
517,581

98,294 )
(
2,854,448 )
(
974,733 )
2,207
64,093
(
2,265,514 )
7,023
203,945
261,026
11,903
345,677
351,585
8,488
246,481
601,531
14,512
421,438
314,451

12,153 )
(
352,916 )
787,122
4,424
128,481
487,867
12,633
366,870
(
228,661 )

1,224 )
(
35,538 )
186,312
813,759
23,631,551
18,072,615

(Continued)

19

==> picture [596 x 105] intentionally omitted <==

DELTA ELECTRONICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31

(EXPRESSED IN THOUSANDS OF DOLLARS)

US Dollars
New Taiwan
2012(Unaudited)
2012
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in financial assets held for trading
$ 157
$ 4,557
Decrease in other financial assets
3,473
100,869
Increase in available-for-sale financial assets
(
2,092 )
(
60,765 )
(
Proceeds from disposal of available-for-sale financial assets
18,906
549,031
Cash dividends received from available-for-sale financial assets during the year of conversion
4,059
117,872
Increase in financial assets carried at cost
(
13,828 )
(
401,559 )
(
Proceeds from disposal of financial assets carried at cost
5,150
149,550
Proceeds from capital reduction of financial assets carried at cost
209
6,059
Increase in long-term equity investments accounted for under the equity method
-
-
(
Proceeds from disposal of investments in long-term equity investment accounted for under
the equity method
30
859
Acquisition price of subsidiary
-
-
(
Increase in cash surrender value of life insurance
(
94 )
(
2,734 )
(
Increase in prepaid long-term investment
(
1,033 )
(
30,000 )
Acquisition of property, plant and equipment
(
378,665 )
(
10,996,419 )
Proceeds from disposal of property, plant and equipment
10,036
291,453
Increase in other intangible assets
(
14,994 )
(
435,430 )
(Increase) decrease in refundable deposits
(
2,059 )
(
59,781 )
Increase in deferred expenses
(
39,140 )
(
1,136,623 )
(
Decrease in other assets - other
59
1,715
Purchase of minority interest
-
-
(
Proceeds form disposal of equity in subsidiaries to minority shareholders
905
26,273
Net cash used in investing activities
(
408,921 )
(
11,875,073 )
(
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term loans
(
368,753 )
(
10,708,580 )
(Decrease) increase in long-term loans
(
200,471 )
(
5,821,699 )
Increase in guarantee deposits received
194
5,637
Payment of cash dividends
(
289,853 )
(
8,417,324 )
(
Employees' stock options
40,875
1,187,011
Cash dividends declared to minority interests
(
14,238 )
(
413,486 )
(
Increase in subsidiaries’ capital from minority shareholders
8,853
257,101
Net cash (used in) provided by financing activities
(
823,393 )
(
23,911,340 )
Effect due to changes in exchange rates
(
89,537 )
(
2,600,151 )
Effect due to changes in consolidated subsidiaries
3,505
101,788
Cash of subsidiary classified as held for sale at the end of year
(
67,031 )
(
1,946,553 )
(Decrease) increase in cash and cash equivalents
(
571,618 )
(
16,599,778 )
Cash and cash equivalents at beginning of year
2,331,127
67,695,906
Cash and cash equivalents at end of year
$ 1,759,509
$ 51,096,128
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for interest
$ 16,091
$ 467,291
Cash paid during the year for income tax
$ 103,764
$ 3,013,309
NON-CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends declared but not yet paid to minority interest
$ -
$ -
FAIR VALUE OF ASSETS AND LIABILITIES OF THE ACQUIRED SUBSIDIARY WERE
AS FOLLOWS:
Cash and cash equivalents
$ 3,505
$ 101,788
Other current assets
100
2,918
Funds and investments
-
-
Property, plant and equipment
45,613
1,324,614
Goodwill
475
13,793
Other intangible assets
-
-
Other assets
43,925
1,275,575
Other current liabilities
(
100 )
(
2,916 )
(
Other liabilities
(
165 )
(
4,800 )
(
Minority interest
(
28 )
(
820 )
(
Subtotal
93,325
2,710,152
Investment cost before merger (shown as financial assets carried at cost - non-current)
(
93,325 )
(
2,710,152 )
(
Cash paid to acquire subsidiary
$ -
$ -		 Dollars
2011
$ -
1,302,640

147,000 )
290,437
-

3,030,367 )
168,854
750

90,825 )
403,785

6,098,012 )

9,009 )
-
14,130,018
839,954
-
43,452

949,273 )
116

485,678 )
-

21,890,194 )
5,179,329
16,069,239
18,802

12,480,034 )
597,032

2,308,729 )
1,121
7,076,760
2,446,694
1,530,035
-
7,235,910
60,459,996
$ 67,695,906
$ 372,113
$ 2,892,648
$ 58,401
$ 1,530,035
10,301,783
324,950
781,091
1,740,298
1,777,023
75,489

7,843,879 )

62,623 )

2,157,429 )
6,466,738

368,726 )
$ 6,098,012

The accompanying notes are an integral part of these consolidated financial statements. See report of independent accountants dated March 11, 2013.

==> picture [596 x 105] intentionally omitted <==

DELTA ELECTRONICS, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 AND 2011

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. HISTORY AND ORGANIZATION

  • (1) Delta Electronics, Inc. (the Company) was incorporated in 1971 under the provisions of the Company Law of the Republic of China (R.O.C.) as a company limited by shares and was listed on Taiwan Stock Exchange Corporation (TSEC) since December 1988. The main activities of the Company are the installation of electronic control systems and manufacturing of communication products and components, computer information system and power supply.

  • (2) On October 28, 2010, the Board of Directors of the Company adopted a resolution to conduct a simple merger with a 94.89% owned subsidiary – PreOptix Co., Ltd. (PreOptix) in accordance with Article 19 of Business Mergers and Acquisitions Act. PreOptix was the dissolved company and the Company was the surviving company after the consolidation. The effective date was March 1, 2011.

  • (3) As of December 31, 2012, the Company had approximately 5,400 employees and all consolidated entities had approximately 68,000 employees.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of the Company and its subsidiaries (collectively referred herein as the Group) are prepared in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers” and generally accepted accounting principles in the Republic of China. The Group’s significant accounting policies are summarized as follows:

(1) Basis for preparation of consolidated financial statements

  • A. All majority-owned subsidiaries and controlled entities are included in the consolidated financial statements and the Company prepares consolidated financial statements on a quarterly basis. The income (loss) of the subsidiaries is included in the consolidated statement of income effective the date on which the Company gains control over the subsidiaries. The income (loss) of the subsidiaries is excluded from the consolidated statement of income effective the date on which the Company loses control over the subsidiaries. Significant intercompany transactions and assets and liabilities arising from intercompany transactions are eliminated.

21

==> picture [596 x 105] intentionally omitted <==

  • B. Subsidiaries included in the consolidated financial statements and their changes in 2012 were as follows:
Investor Subsidiary Main activities
Equity investments
Equity investments
Trading of equipment,
components and
materials of telecom
and computer
systems
Manufacturing of
solar batteries and
related systems
Equity investments
Designing and
experimenting on
integrated circuit and
information software
services
Research, development,
manufacturing and
sales of film optic-
electronics devices
Manufacturing,
wholesale and retail of
medical equipment
Equity investments		 2012
2011
94.00
94.00
100.00
100.00
100.00
100.00
42.40
59.04
39.62
39.62
83.11
80.68
100.00
100.00
100.00
100.00
100.00
100.00
Ownership (%)
as of December31,		 Description
2012
94.00
100.00
100.00
42.40
39.62
83.11
100.00
100.00
100.00
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.		 Delta
International
Holding Ltd.
(DIH)
Delta Networks
Holding Ltd.
(DNH)
Deltronics
(Netherlands)
B.V. (DEN)
DelSolar Co., Ltd.
(DelSolar)
PreOptix (Hong
Kong) Co., Ltd.
(PHK)
NeoEnergy
Microelectronics,
Inc. (NEM)
Cyntec Co., Ltd.
(Cyntec)
DelBio Inc.
(DelBio)
Delta Electronics
Capital Company
(Delta Capital)		 Note A

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Sales of electronic
products
Research and
development, energy
technology, meeting,
exhibition, and lease
services, etc.
Manufacturing and
sales of color filter and
lease services, etc.
Research, designing,
development,
manufacturing and
sales of intelligent
robot systems and
automation
engineering, etc.
Equity investments,
operations management
and engineering
services
Sales of electronic
products
Operations and
engineering services
Warehousing and
logistics services		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
100.00
-
99.97
99.97
100.00
-
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 Description
2012
100.00
100.00
99.97
100.00
100.00
100.00
100.00
100.00
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta Electronics,
Inc.
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)		 Delta Electronics
Int'l (Singapore)
Pte. Ltd. (DEIL-
SG)
Delta Smart
Green Life Co.,
Ltd. (DSGL)
Allied Material
Technology Corp.
(AMT)
Delta Robot
Automatic Co.,
Ltd. (Delta Robot)
Delta Electronics
(H.K.) Ltd.
(DHK)
Delta Electronics
International Ltd.
(DEIL-Labuan)
Delta Power
Sharp Ltd. (DPS)
DEI Logistics
(USA) Corp.
(ALI)		 Note B
Note C
Note B

23

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Sales of power
products, display
solution products
electronic components,
industrial automation
products and their
materials
Equity investments
Equity investments
Equity investments
Equity investments
Manufacturing and
sales of uninterruptible
power systems
Manufacturing and
sales of transformer and
power supplies
Manufacturing and
sales of transformer and
power supplies
Product design and
management consulting
service, etc.		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
100.00
100.00
100.00
100.00
60.38
60.38
100.00
100.00
10.38
10.38
100.00
100.00
100.00
100.00
100.00
100.00		 Description
2012
100.00
100.00
100.00
60.38
100.00
10.38
100.00
100.00
100.00
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta International
Holding Ltd. (DIH)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)		 Delta Electronics
(Japan), Inc.
(DEJ)
DAC Holding
(Cayman) Ltd.
(DAC)
Ace Pillar
Holding Co., Ltd.
(Ace)
PreOptix (Hong
Kong) Co., Ltd.
(PHK)
Drake Overseas
Financial
Investment Ltd.
(Drake)
Delta Greentech
(China) Co., Ltd.
(DGC)
Delta Electronics
(Dongguan) Co.,
Ltd. (DDG)
Delta Electronics
Power
(Dongguan) Co.,
Ltd. (DEP)
Delta Electronics
(Shanghai) Co.,
Ltd. (DPEC)		 Note D
Note E
Note F

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Manufacturing and
sales of power supplies
and transformers
Manufacturing and
sales of transformers
Manufacturing and
sales of peripherals and
electronic control
equipments
Manufacturing and
sales of various
projectors
Manufacturing and
sales of power supplies
and transformers
Manufacturing and
sales of power supplies
and
transformers
Sales of power
management of
industrial automation
product and
telecommunications
equipment
Installation, consulting
and trading of
electronic products		 2012
2011
Ownership (%)
as of December 31,
55.00
55.00
55.00
55.00
55.00
55.00
55.00
55.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 Description
2012
55.00
55.00
55.00
55.00
100.00
100.00
100.00
100.00
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)
Delta Electronics
(H.K.) Ltd. (DHK)		 Delta Electronics
(Jiangsu) Ltd.
(DWJ)
Delta Electronics
Components
(Wujiang) Ltd.
(DWC)
Delta Electro-
Optics (Wujiang)
Ltd. (DWO)
Delta Video
Display System
(Wujiang) Ltd.
(DWV)
Delta Electronics
(Wuhu) Co., Ltd.
(DWH)
Delta Electronics
(Chenzhou) Co.,
Ltd. (DCZ)
Delta Electronics
International
Mexico S.A. DE
C.V. (DEIL-MX)
Delta Electronics
(Wujiang)
Trading Co., Ltd.
(DWT)

25

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Manufacturing and
sales of transformers
and bluetooth module
Manufacturing and
sales of lenses and
optical engines for
projectors
Trading of networking
system and peripherals
Sales of power
products, display
solution products
electronic components,
industrial automation
products and their
materials
Manufacturing and
sales of electronic
products
Sales of electronic
products
Equity investments
Manufacturing and
sales of uninterruptible
power systems
Manufacturing and
sales of uninterruptible
power systems		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
3.81
3.81
48.51
48.51		 Description
2012
100.00
100.00
100.00
100.00
100.00
100.00
100.00
3.81
48.51
Delta Electronics
(H.K.) Ltd. (DHK)
PreOptix (Hong
Kong) Co., Ltd.
(PHK)
Delta Electronics
(Japan), Inc. (DEJ)
Delta Electronics
(Japan), Inc. (DEJ)
DAC Holding
(Cayman) Ltd.
(DAC)
DAC Holding
(Cayman) Ltd.
(DAC)
Drake Overseas
Financial
Investment Ltd.
(Drake)
Ace Pillar Holding
Co., Ltd. (Ace)
Drake Investment
(HK) Ltd. (Drake-
HK)		 Delta Green
(Tianjin)
Industries Co.,
Ltd. (DGT)
PreOptix (Jiang
Su) Co., Ltd.
(PJS)
Addtron
Technology
(Japan), Inc. (AT
Japan)
Delta Electronics
(Korea), Inc.
(Delta Korea)
Delta Electronics
Mexico S.A. DE
C.V. (DEM)
Delta Video
Technology Ltd.
(DVT)
Drake Investment
(HK) Ltd. (Drake-
HK)
Delta Greentech
(China) Co., Ltd.
(DGC)
Delta Greentech
(China) Co., Ltd.
(DGC)		 Note G
Note E
Note F
Note F

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Manufacturing and
sales of power supplies
and transformers
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Manufacturing and
sales of power supplies
and transformers
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
30.00
-
100.00
100.00
30.00
-
30.00
-		 Description
2012
100.00
30.00
100.00
30.00
30.00
Delta Electronics
(Wuhu) Co., Ltd.
(DWH)
Delta Electronics
(Wuhu) Co., Ltd.
(DWH)
Delta Electronics
(Chenzhou) Co.,
Ltd. (DCZ)
Delta Electronics
(Chenzhou) Co.,
Ltd. (DCZ)
Delta Electronics
(Dongguan) Co.,
Ltd. (DDG)		 Wuhu Delta
Technology Co.,
Ltd. (WDT)
Delta Energy
Technology
(Wuhu) Co., Ltd.
(DET-WH)
Chenzhou Delta
Technology Co.,
Ltd. (CDT)
Delta Energy
Technology
(Chenzhou) Co.,
Ltd. (DET-CZ)
Delta Energy
Technology
(Dongguan) Co.,
Ltd. (DET-DG)		 Note B
Note B
Note B

27

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.		 2012
2011
Ownership (%)
as of December 31,
30.00
-
70.00
-
70.00
-
70.00
-		 Description
2012
30.00
70.00
70.00
70.00
Delta Electro-
Optics (Wujiang)
Ltd. (DWO)
Delta Electronics
(Shanghai) Co.,
Ltd. (DPEC)
Delta Electronics
(Shanghai) Co.,
Ltd. (DPEC)
Delta Electronics
(Shanghai) Co.,
Ltd. (DPEC)		 Delta Energy
Technology
(Wujiang) Co.,
Ltd. (DET-WJ)
Delta Energy
Technology
(Wuhu) Co., Ltd.
(DET-WH)
Delta Energy
Technology
(Chenzhou) Co.,
Ltd. (DET-CZ)
Delta Energy
Technology
(Wujiang) Co.,
Ltd. (DET-WJ)		 Note B
Note B
Note B
Note B

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Research and
development of energy-
saving technology,
energy-saving
equipment, energy
management system
and technology
consulting service, etc.
Equity investments
Manufacturing and
sales of networking
system and peripherals
Trading of networking
system and peripherals
Trading of networking
system and peripherals		 2012
2011
Ownership (%)
as of December 31,
70.00
-
10.00
-
90.00
-
100.00
100.00
99.98
99.98
100.00
100.00
100.00
100.00		 Description
2012
70.00
10.00
90.00
100.00
99.98
100.00
100.00
Delta Electronics
(Shanghai) Co.,
Ltd. (DPEC)
Delta Electronics
(Shanghai) Co.,
Ltd. (DPEC)
Delta Greentech
(China) Co., Ltd.
(DGC)
Delta Networks
Holding Ltd.
(DNH)
Delta Networks,
Inc. (DNI Cayman)
Delta Networks,
Inc. (DNI Cayman)
Delta Networks,
Inc. (DNI Cayman)		 Delta Energy
Technology
(Dongguan) Co.,
Ltd. (DET-DG)
Delta Energy
Technology
(Shanghai) Co.,
Ltd. (DET-SH)
Delta Energy
Technology
(Shanghai) Co.,
Ltd. (DET-SH)
Delta Networks,
Inc. (DNI
Cayman)
Delta Networks,
Inc. (Taiwan)
(DNIT)
DNI Logistics
(USA) Corp.
(ALN)
Delta Networks
International Ltd.
(DNIL-Labuan)		 Note B
Note B
Note B

29

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Equity investments
Manufacturing and
sales of other radio
transmission apparatus,
incorporating reception
apparatus and other
radio-broadcast
receivers, combined
with sound recording or
reproducing apparatus
Design of computer
software
Operation of radio
transmission apparatus,
and automatic data
processing, reception,
conversion and
transmission or
regeneration of voice,
images or other data of
the machine, including
switches and routers,
with a special program
to control a computer or
word processor with
memory business
Manufacturing and
sales of wire and
wireless
telecommunications
equipment, electronic
parts and controlled
telecommunications
radio frequency devices		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 Description
2012
100.00
100.00
100.00
100.00
100.00
Delta Networks,
Inc. (DNI Cayman)
Delta Networks
(H.K.) Ltd.
(DNHK)
Delta Networks
(H.K.) Ltd.
(DNHK)
Delta Networks
(H.K.) Ltd.
(DNHK)
Delta Networks,
Inc. (Taiwan)
(DNIT)		 Delta Networks
(H.K.) Ltd.
(DNHK)
Delta Networks
(Dongguan) Ltd.
(DII)
Delta Networks
(Shanghai) Ltd.
(DNS)
Delta Networks
(Xiamen) Ltd.
(DNX)
Ayecom
Technology Co.,
Ltd. (Ayecom)

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Equity investments
Equity investments
Equity investments
Equity investments
Contractor of solar
systems project
Manufacturing and
sales of solar batteries
and related systems
Design and sale of solar
system
Contractor of solar
system
Contractor of solar
system		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 Description
2012
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
DelSolar Co., Ltd.
(DelSolar)
DelSolar Co., Ltd.
(DelSolar)
DelSolar Holding
(Cayman) Ltd.
(DSH)
DelSolar Holding
(Cayman) Ltd.
(DSH)
DelSolar Holding
Singapore Pte. Ltd.
(DSH-SG)
DelSolar (H.K.)
Ltd. (DSHK)
DelSolar US
Holdings
(Delaware)
Corporation
(DSUS)
DelSolar
Development
(Delaware) LLC
(DS Delaware)
DelSolar
Development
(Delaware) LLC
(DS Delaware)		 DelSolar Holding
(Cayman) Ltd.
(DSH)
DelSolar Holding
Singapore Pte.
Ltd. (DSH-SG)
DelSolar (H.K.)
Ltd. (DSHK)
DelSolar US
Holdings
(Delaware)
Corporation
(DSUS)
DelSolar India
EPC Company
Private Ltd. (DS
India)
DelSolar
(Wujiang) Ltd.
(DSWJ)
DelSolar
Development
(Delaware) LLC
(DS Delaware)
DSS-RAL LLC
(DSS)
DSS-USF-PHX
LLC (DSSU)

31

==> picture [596 x 105] intentionally omitted <==

Investor Subsidiary Main activities
Equity investments
Equity investments
Equity investments
Trading
Research, development,
manufacturing and
sales of new-type
electronic components
and wholesale, import
and export of similar
products
Research, development,
manufacturing and
sales of new-type
electronic components
(chip components,
sensing elements,
hybrid integrated
circuits) and wholesale,
import and export of
similar products		 2012
2011
Ownership (%)
as of December 31,
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00		 Description
2012
100.00
100.00
100.00
100.00
100.00
100.00
Cyntec Co., Ltd.
(Cyntec)
Fairview Assets
Ltd. (Fairview)
Grandview
Holding Ltd.
(Grandview)
Grandview
Holding Ltd.
(Grandview)
Cyntec Holding
(H.K.) Ltd. (CHK)
Cyntec Holding
(H.K.) Ltd. (CHK)		 Fairview Assets
Ltd. (Fairview)
Grandview
Holding Ltd.
(Grandview)
Cyntec Holding
(H.K.) Ltd.
(CHK)
Cyntec
International Ltd.
(CIL-Labuan)
Cyntec (Suzhou)
Co., Ltd. (CSC)
Cyntec
Electronics
(Suzhou) Co.,
Ltd. (CES)

  • Note A: On November 19, 2012, the Board of Directors of the Company resolved to participate in the tender offer by Neo Solar Power Corporation (NSP) of DelSolar. This tender offer transaction was completed on December 24, 2012. DelSolar’s stock ownership directly and indirectly held by the Company was reduced to 42.40%. As the Company has the ability to exercise significant influence on the appointment of the management, operational directions and financial planning of DelSolar, DelSolar was still included in the consolidated financial statements.

  • Note B: An investee company newly incorporated in 2012.

==> picture [596 x 105] intentionally omitted <==

  • Note C: The Company acquired 99.97% ownership of AMT with $2,710,152 in 2011. According to the capital increase subscription contract and relevant regulations, the Company has no control power or significant influence on AMT until the reorganization of AMT is completed and convenes shareholders’ meeting to re-elect directors. The Taiwan Taoyuan District Court issued 2007 Zheng-Zi Order No. 1 civil ruling confirmation certificate to AMT on April 5, 2012 and the special meeting of shareholders after the reorganization was convened by the joint committee of the reorganizers and the reorganization supervisor to re-elect directors on June 1, 2012. All board seats were elected and control power was gained by the Company. AMT was included in the consolidated financial statements effective on that day.

  • Note D: DIH acquired 100% stock ownership in Ace on September 1, 2011, and Ace was included in the consolidated financial statements effective on that day.

  • Note E: DIH acquired 100% stock ownership in Drake and its subsidiary - Drake-HK on October 3, 2011, and Drake and Drake-HK were included in the consolidated financial statements effective on that day.

  • Note F: In 2011, DIH acquired 100% stock ownership in Ace and Drake, which indirectly acquired 3.811% and 48.51% stock ownership, respectively in DGC. Including the original 10.38% stock ownership held by DIH, the Company’s consolidated stock ownership in DCG was 62.701% and DGC was included in the consolidated financial statements since October 3, 2011.

  • Note G: DHK acquired 50% stock ownership of DGT on August 1, 2011. As DHK has the ability to exercise significant influence on the appointment of the management, operational directions and financial planning of DGT, DGT was included in the consolidated financial statements since August 1, 2011. On December 1, 2011, DHK increased its ownership percentage to 100%.

  • The financial statements of the consolidated subsidiaries of DEN, Delta Korea and ALN for the year ended December 31, 2011 were audited by other independent accountants. As of December 31, 2011, the total assets of these subsidiaries amounted to $1,051,049, constituting 0.54% of the consolidated total assets, and the total operating revenues were $3,291,816, constituting 2.03% of the consolidated total operating revenues for the year then ended.

  • C. Subsidiaries not included in the consolidated financial statements: None.

  • D. Adjustments for subsidiaries with different balance sheet dates: None.

  • E. Difference in the accounting policies adopted between the Company and the subsidiaries: None. F. Special operating risk of foreign subsidiaries: None.

  • G. Nature and extent of the restrictions on fund remittance from subsidiaries to the parent company: None.

  • H. Details of the parent’s stock that is held by the subsidiary: None.

33

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  • I. The related information regarding a subsidiary’s issuance of convertible bonds and new common stock: The issuance of convertible bonds and new common stock by subsidiaries had no significant effect on stockholders’ equity of the parent company.

  • (2) Translation of financial statements of foreign subsidiaries

  • Assets and liabilities of foreign subsidiaries are translated into New Taiwan dollars using the exchange rates at the balance sheet date. Equity accounts are translated at historical rates except for beginning retained earnings, which are carried forward from prior year’s balance. Dividends are translated at the rates prevailing at the date of declaration. Profit and loss accounts are translated at weighted-average rates of the year. Exchange differences are recorded as cumulative translation adjustments and are included as a component of the stockholders’ equity.

  • (3) Foreign currency transactions

  • A. Transactions denominated in foreign currencies are translated into functional currency at the spot exchange rates prevailing at the transaction dates. Exchange gains or losses due to the difference between the exchange rate on the transaction date and the exchange rate on the date of actual receipt and payment are recognized in current year’s profit or loss.

  • B. Monetary assets and liabilities denominated in foreign currencies are translated at the spot exchange rates prevailing at the balance sheet date. Exchange gains or losses are recognized in profit or loss.

  • C. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss shall be recognized in profit or loss. Conversely, when a gain or loss on a non-monetary item is recognized directly in equity, any exchange component of that gain or loss shall be recognized directly in equity. However, non-monetary items that are measured on a historical cost basis are translated using the exchange rate at the date of the transaction.

  • (4) Classification of current and non-current items

  • A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

    • a. Assets arising from operating activities that are expected to be realized or consumed, or are intended to be sold within the normal operating cycle;

    • b. Assets held mainly for trading purposes;

    • c. Assets that are expected to be realized within twelve months from the balance sheet date;

    • d. Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

  • B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

    • a. Liabilities arising from operating activities that are expected to be paid off within the normal operating cycle;

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  - b. Liabilities arising mainly from trading activities;

  - c. Liabilities that are to be paid off within twelve months from the balance sheet date;

  - d. Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date.

  • (5) Cash equivalents

  • Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of change in value resulting from fluctuations in interest rate.

  • The Group’s statement of cash flows is prepared on the basis of cash and cash equivalents.

  • (6) Settlement date accounting

  • If an entity recognizes financial assets using settlement date accounting, any change in the fair value of the asset to be received during the period between the trade date and the settlement date is not recognized for assets carried at cost or amortized cost. For financial asset or financial liability classified as at fair value through profit or loss, the change in fair value is recognized in profit or loss. For available-for-sale financial asset, the change in fair value is recognized directly in equity.

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

  • A. Derivative financial instruments and convertible bonds are recognized and derecognized using settlement date accounting and are recognized initially at fair value.

  • B. Financial assets and financial liabilities at fair value through profit or loss are subsequently remeasured and stated at fair value, and the gain or loss is recognized in profit or loss. The fair value of listed stocks and OTC stocks is based on latest quoted fair prices at the balance sheet date. If the convertible bonds were invested before the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds,” when the fair value of the derivatives embedded in the hybrid instruments cannot be measured reliably, they are subsequently remeasured and stated at cost.

  • C. Financial assets and financial liabilities are designated as financial assets and liabilities at fair value through profit or loss when either of the following conditions is met:

    • a. The financial asset or financial liability designated is a hybrid contract.

    • b. It eliminates or significantly reduces a measurement or recognition inconsistency.

    • c. It is designated and its performance is evaluated on a fair value basis.

(8) Available-for-sale financial assets

  • A. Equity investments are recognized and derecognized using trade date accounting and are recognized initially at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.

  • B. Available-for-sale financial assets are remeasured and stated at fair value and the gain or loss is recognized in equity. When the financial assets are derecognized, the cumulative gain or loss shall be removed from equity and recognized in profit or loss. The fair value of listed stocks

35

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and OTC stocks is based on latest quoted fair prices at the balance sheet date.

  • C. If there is any objective evidence that the financial asset is impaired, the cumulative loss that had been recognized directly in equity shall be removed from equity and recognized in profit or loss. Impairment losses recognized previously in profit or loss for an investment in an equity instrument shall not be reversed through profit or loss, and if, subsequently, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss shall be reversed, with the amount of the reversal recognized in profit or loss.

  • (9) Financial assets carried at cost

  • A. Investment in unquoted equity instruments is recognized or derecognized using trade date accounting and is stated initially at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset.

  • B. If there is any objective evidence that the financial asset is impaired, the impairment loss is recognized in profit or loss. Such impairment loss cannot be reversed.

  • C. The common stocks through private placement which were invested or converted before the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds”, were carried at cost in accordance with EITF 95-243, “Accounting for financial assets with transfer restrictions”, prescribed by the R.O.C. Accounting Research and Development Foundation, dated October 5, 2006, for they had no quoted prices in an active market. Those investments after October 8, 2010 were remeasured based on their estimated fair value and classified as financial assets held for trading or available-for-sale financial assets.

  • (10) Derivative financial instruments for hedging

  • Derivatives are initially recognized at fair value on the date a contract is entered into and are subsequently remeasured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and the nature of the hedged item.

  • A. Fair value hedges: Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in profit or loss. Changes in the fair value of the hedged asset or liability that are attributable to the hedged item are recognized in profit or loss as an adjustment to the carrying amount of the hedged item.

  • B. Cash flow hedges: The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity.

    • a. If a hedge of a forecast transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains or losses that were recognized directly in equity are transferred to profit or loss in the same period or periods when the hedged item affects profit or loss.

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  - b. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized directly in equity, are reversed and included in the initial cost or other carrying amount of the asset or liability.

  • (11) Notes and accounts receivable, other receivables and allowance for doubtful accounts

  • A. Notes receivable and accounts receivable are claims resulting from the sale of goods or services. Other receivables are those arising from transactions other than the sale of goods or services. Notes receivable, accounts receivable and other receivables are recognized initially at fair value.

  • B. The Group assesses whether objective evidence of impairment exists individually or collectively for financial assets that are not individually significant. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is recognized and measured as 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. If 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 shall be reversed. The reversal shall not result in a carrying amount of the financial asset that exceeds what the amortized cost would have been had the impairment not been recognized at the date the impairment is reversed. The amount of the reversal shall be recognized in profit or loss.

  • (12) Inventories

The Group uses the perpetual inventory system. Inventories are recorded at standard cost and variances are allocated to inventories and cost of goods sold at the balance sheet date. At the end of year, inventories are evaluated at the lower of cost or net realizable value, and the individual item approach is used in the comparison of cost and net realizable value. The calculation of net realizable value is based on the estimated selling price in the normal course of business, net of estimated costs of completion and estimated selling expenses.

  • (13) Non-current disposal group classified as held for sale / Discontinued operations

  • In accordance with R.O.C. SFAS No. 38, “Non-current Assets Held for Sale and Discontinued Operations”, EITF 97-055 of the Accounting Research and Development Foundation, R.O.C., dated February 22, 2008 “Accounting for the subsidiary classified as held for sale” and EITF 97-088 of the Accounting Research and Development Foundation, R.O.C., dated March 14, 2008 “Accounting for non-current asset classified as held for sale”, the Company accounts for the subsidiary classified as held for sale as follows:

  • A. The income (loss) of the subsidiaries is excluded from the consolidated statement of income effective the date on which the subsidiaries meets the criteria to be classified as held for sale. The assets, liabilities and equity relating to the subsidiaries classified as held for sale shall be presented separately in the consolidated balance sheet. The subsidiaries classified as held for

37

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sale shall be measured at the lower of carrying amount and fair value less costs to sell on the date which the subsidiaries meet the criteria to be classified as held for sale. The carrying amounts of the liabilities shall be measured in accordance with applicable Statements of Financial Accounting Standards to determine the amounts of total assets.

  • B. If the subsidiaries classified as held for sale meet the definition of discontinued operations, the results of their operations before being classified to the accounts relating to non-current disposal group classified as held for sale and the impairment loss recognized when being classified to the accounts relating to non-current disposal group classified as held for sale shall be combined to the net profit or loss after tax of discontinued operations.

  • (14) Funds and investments

  • A. Long-term equity investments accounted for under the equity method

    • a. Long-term equity investments in which the Company holds more than 20% of the investee company’s voting shares or has the ability to exercise significant influence on the investee’s operational decisions are accounted for under the equity method. The excess of the initial investment cost over the acquired net asset value of the investee attributable to goodwill is no longer amortized effective January 1, 2006. Retrospective adjustment of the amount of goodwill amortized in previous years is not required. The excess of acquired net asset value of investee over the initial investment cost is allocated proportionately and applied as a reduction to the book values of identifiable non-current assets, and any remaining amount of such excess after this allocation is credited to Extraordinary gains. However, negative goodwill prior to December 31, 2005 is continuously amortized.

    • b. Pursuant to EITF 92-047 of the Accounting Research and Development Foundation, R.O.C., dated February 25, 2003, of the Republic of China, for shares transfer among parent company and subsidiaries, the carrying value of long-term investments transferred is the book value of the investment. The difference between payment for the equity and acquisition cost is recorded as capital reserve or retained earnings.

    • c. When the treatment for a long-term equity investment is changed to the equity method from other methods during the year, the investor company will not adjust retroactively. The book value of the equity investment at the beginning of the year is used as the initial book value of the long-term equity investment under the equity method. The difference between investment cost and underlying equity in net assets is analyzed and dealt with by following the allocation procedures of the acquisition cost specified in R.O.C. SFAS No. 25, “Business Combinations – Purchase Method”. If an investor company receives cash dividends from an investee company during the year an investor company changes the treatment for the long-term equity investment to the equity method, the investment income and the long-term equity investment shall be offset if dividends were accounted for as investment income under the previous method.

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  • d. Exchange differences arising from translation of the financial statements of overseas investee companies accounted for under the equity method are recorded as “cumulative translation adjustments” under stockholders’ equity.

  • e. The Company credits long-term equity investments accounted for under the equity method when cash dividends are declared by investee companies on ex-dividend date.

  • B. Cash surrender value of life insurance

The cash surrender value of life insurance is recorded as an asset and classified as long-term investment. The increase in cash surrender value during the period is accounted for as an adjustment to insurance premiums paid.

  • (15) Business combination

Business combination transactions are accounted for in accordance with R.O.C SFAS No. 25, “Business Combination” using the purchase method. Acquisition price is purchase cost plus costs directly attributable to the acquisition. The excess of the acquisition price over the acquired net asset fair value of the merged business is recognized as goodwill. The allocation period of the acquisition price shall not exceed one year after the date of acquisition.

  • (16) Property, plant and equipment

  • A. Property, plant and equipment are stated at cost except for land which is carried at appraised value.

  • B. Depreciation is provided on a straight-line method over the estimated lives of the assets. Leasehold improvements are amortized over the term of the lease. Salvage value of the fully depreciated assets that are still in use is depreciated based on the re-estimated economic service lives.

    • The Group uses $1 (depending on their respective reporting currency) as salvage value after 2001.

    • The estimated useful lives of fixed assets are 2 to 8 years, except for buildings which are 5 to 55 years.

  • C. Major renewals and improvements are capitalized and depreciated accordingly. Maintenance and repairs are charged to expense as incurred. When an asset is sold or retired, the cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is included in current non-operating results.

  • D. Assets leased to others are reclassified to “other assets” at their carrying value. Depreciation expense incurred in current period is accounted for as non-operating expense.

  • E. Property, plant and equipment that are idle or have no value in use are reclassified to “other assets” at the lower of their fair value less costs to sell or book value. The resulting difference is included in current operations. Depreciation provided on these assets is charged to non-operating expense.

39

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(17) Intangible assets

  • A. In accordance with the amendments to R.O.C. SFAS No. 25, “Business Combination”, goodwill arising from business combination is no longer amortized and should be tested for impairment annually or more frequently.

  • B. Trademarks

  • a. Trademarks with finite useful lives are recorded at actual cost, and amortized over the estimated useful lives based on the straight-line method.

  • b. Certain trademarks which are assessed to generate net cash inflows have indefinite useful lives and are recorded at actual cost. These are not amoritized and instead are tested for impairment annually.

  • C. Land use rights acquired in Mainland China are amortized on a straight-line basis over the contractual period or other legal rights.

  • D. Intangible assets other than goodwill, trademarks and land use rights, mainly patents, customer relationships and technology authorization fees, are amortized on a straight-line basis over 3~12 years.

(18) Deferred charges

Deferred charges are recorded at actual cost and amortized over the estimated useful lives based on the straight-line method.

(19) Impairment of non-financial assets

  • A. The Group recognizes impairment loss when there is indication that the recoverable amount of an asset is less than its carrying amount. The recoverable amount is the higher of the fair value less costs to sell and value in use. The fair value less costs to sell is the amount obtainable from the sale of the assets in an arm’s length transaction after deducting any direct incremental disposal costs. The value in use is the present value of estimated future cash flows to be derived from continuing use of the asset and from its disposal at the end of its useful life.

  • B. When the impairment no longer exists, the impairment loss recognized in prior years shall be recovered. However, impairment loss of goodwill is not recoverable.

  • (20) Retirement plan

  • A. Under the defined benefit pension plan, net periodic pension costs are recognized in accordance with the actuarial calculations. Net periodic pension costs include service cost, interest cost, expected return on plan assets, and amortization of unrecognized net transition obligation and gains or losses on plan assets. Unrecognized net transition obligation is amortized on a straight-line basis over the employees’ remaining service period.

  • B. Under the defined contribution pension plan, net periodic pension costs are recognized as incurred.

(21) Income tax

  • A. The Group adopts inter-period and intra-period allocation of income tax. Over or under provision of prior years’ income tax liabilities is included in the current year’s income tax expense. When a change in the tax laws is enacted, the deferred tax liability or asset is recomputed accordingly in the period of change. The difference between the new amount

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and the original amount, that is, the effect of changes in the deferred tax liability or asset, is recognized as an adjustment to current income tax expense (benefit).

  • B. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

  • C. The Company and subsidiaries registered in Taiwan adopt the “Income Basic Tax Act”. If the amount of regular income tax is equal or more than the amount of basic tax, the income tax payable shall be calculated in accordance with the Income Tax Act and other relevant laws. Whereas, if the amount of regular income tax is less than the amount of basic tax, the income tax payable shall be equal to the basic tax. The difference between the regular income tax and basic tax shall not be subject to deductions of investment tax credits granted under the provisions of other laws.

  • (22) Share-based payment - employee compensation plan

  • A. The employee stock options granted from January 1, 2004 through December 31, 2007 are accounted for in accordance with EITF 92-070, EITF 92-071 and EITF 92-072 of the Accounting Research and Development Foundation, R.O.C., dated March 17, 2003. Under the share-based employee compensation plan, compensation cost is recognized using the intrinsic value method and pro forma disclosures of net income and earnings per share is prepared under the fair value method.

  • B. When share-based payment awards held by employees of the acquiree are replaced by the acquirer’s share-based payment awards due to a business combination and are changed to be settled by the equity instruments of the acquirer, the services already received, which are measured by reference to the fair value of the equity instruments granted, should be recognized as acquisition cost for the vested portion, and the unvested portion shall be accounted for as payroll expenses of the acquiree during the remaining vesting period, in accordance with EITF 97-017 of the Accounting Research and Development Foundation, R.O.C., dated January 18, 2008, “Accounting for Share-based Payment Transactions Provided by Stockholders or Affiliated Companies”.

  • (23) Employees’ bonuses and directors’ and supervisors’ remuneration

  • Effective January 1, 2008, pursuant to EITF 96-052 of the Accounting Research and Development Foundation, R.O.C., dated March 16, 2007, “Accounting for Employees’ Bonuses and Directors’ and Supervisors’ Remuneration”, the costs of employees’ bonuses and directors’ and supervisors’ remuneration are accounted for as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and the amounts can be estimated reasonably. However, if the accrued amounts for employees’ bonuses and directors’ and supervisors’ remuneration are significantly different from the distributed amounts resolved by the Board of Directors, then the differences shall be adjusted retroactively in current year’s gain or loss and, if the accrued amounts for employees’ bonuses and directors’ and supervisors’ remuneration are significantly different from the actual distributed amounts resolved by the stockholders at their annual stockholders’ meeting subsequently, the differences shall be recognized as gain or loss in

41

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the following year. In addition, according to EITF 97-127 of the Accounting Research and Development Foundation, R.O.C., dated March 31, 2008, “Criteria for Listed Companies in Calculating the Number of Shares of Employees’ Stock Bonus”, the Company calculates the number of shares of employees’ stock bonus based on the closing price of the Company’s common stock at the previous day of the stockholders’ meeting held in the year following the financial reporting year, and after taking into account the effects of ex-rights and ex-dividends.

(24) Earnings per share

  • A. The Company has a complex capital structure. Pursuant to the R.O.C. SFAS No. 24, “Accounting for Earnings Per Share”, an enterprise with complex capital structure shall present both basic EPS and diluted EPS. The calculations of basic EPS and diluted EPS are as follows:

  • a. Basic EPS: The amount of earnings (or loss) per share is computed by dividing the amount of net income (or loss) attributable to common stock outstanding for the reporting period by the weighted average number of common shares outstanding during that period.

  • b. Diluted EPS: The calculation of diluted EPS is consistent with the calculation of basic EPS assuming that all dilutive potential common shares have been converted into common shares at the beginning of the reporting period and the amount of net income (or loss) attributable to common stock outstanding for the reporting period has been adjusted by the after-tax effect of any other changes in income or expense that would result from the conversion of the dilutive potential common shares.

  • B. The Company’s potential common shares are the employee stock options issued by the Company and employees’ bonus that could be distributed in the form of stock. The treasury stock method will be used to test whether or not potential common shares have dilutive effect in calculating diluted EPS.

(25) Revenue, cost and expense recognition

  • A. Revenue is recognized when the earning process is substantially completed and is realized or realizable. Costs and expenses are recorded as incurred.

  • B. Partial software and solar cell module installation revenue is recognized based on the percentage of completion of the transaction at the balance sheet date, if all of the following conditions are met:

  • a. The amount of the revenue can be measured reliably;

  • b. It is probable that the economic benefits related to the transaction will flow to the enterprise;

  • c. The costs incurred and to be incurred associated with the transaction can be measured reliably; and

  • d. The degree of completion of the transaction can be measured reliably at the balance sheet date.

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(26) Accounting estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the Republic of China requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those assumptions and estimates.

(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

CHANGES IN ACCOUNTING PRINCIPLES

(1) Notes receivable, accounts receivable and other receivables

  • Effective January 1, 2011, the Group adopted the amended Statement of Financial Accounting Standards No. 34, “Financial Instruments: Recognition and Measurement”. Under the amended standard, if there is any objective evidence that the notes and accounts receivable, other receivables and other rights of credit are impaired, an impairment loss (or provision for doubtful accounts) is recognized immediately. The adoption of this regulation had no significant effect on the financial statements.

(2) Operating segments

  • Effective January 1, 2011, the Group adopted R.O.C. SFAS No. 41, “Operating Segments” which supersedes R.O.C. SFAS No. 20, “Segment Reporting”. Segment information for prior years shall be re-prepared when the Group applies this standard for the first time. However, this adoption had no effect on the Group’s consolidated net income and earnings per share for the year ended December 31, 2011.

DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

December 31, 2011.
TAILS OF SIGNIFICANT ACCOUNTS
Cash and cash equivalents
Cash on hand
Checking and demand deposits
Time deposits
Cash equivalents-commercial paper
Classified to non-current assets held for sale
 December 31,
2012
5,885
$ 27,098,669
25,868,162
69,965
53,042,681
1,946,553)
(
51,096,128
$		 2011
6,702
$ 32,446,230
35,202,990
39,984
67,695,906
-
67,695,906
$

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As of December 31, 2012 and 2011, the Group’s overseas checking and demand deposits were $13,834,552 (USD 472,393 thousand, HKD 13,581 thousand, JPY 10,555 thousand, MYR 18 thousand, PLN 40 thousand, EUR 65 thousand, GBP 9 thousand, CZK 22,578 thousand, and RMB 5,124 thousand ) and $14,611,108 (USD 430,245 thousand, HKD 19,237 thousand, JPY 38,591 thousand, THB 14 thousand, PLN 44 thousand, EUR 306 thousand, GBP 9 thousand, CZK 13,397 thousand and RMB 304,359 thousand), respectively. The overseas time deposits were $1,907,812 (RMB 79,800 thousand and USD 53,000 thousand) and $7,205,450 (USD 23,800 thousand), respectively.

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

respectively.
Financial assets at fair value through profit or loss
Current items:
Designated as at fair value through profit or loss
Convertible bonds
Financial assets held for trading
Listed stocks
Adjustment of financial assets held for trading
Non-current items:
Designated as at fair value through profit or loss
Convertible bonds
Adjustment of designated as at fair value
through profit or loss
 2012
2011
720,000
$ -
$ 7,464
12,021
5,821
9,679)
(
733,285
$ 2,342
$ 250,000
$ 1,830,000
$ 2,487)
(
9,475)
(
247,513
$ 1,820,525
$ December 31,
2012
720,000
$ 7,464
5,821

733,285
$ 250,000
$ 2,487)
(

247,513
$

  • A. The Group recognized a net gain of $261,110 and $678,350 for the years ended December 31, 2012 and 2011, respectively.

  • B. The private placement of convertible bonds of $720,000 held by the Company was invested before the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds”, and are designated as financial assets at fair value through profit or loss and are subsequently remeasured and stated at cost. Since they are hybrid instruments, the fair value of derivatives embedded in the bonds cannot be measured reliably. If there is any objective evidence that the bonds are impaired, the impairment loss is recognized.

  • C. The private placement of convertible bonds of Dynapack International Technology Corporation (Dynapack) held by the Company was converted into private placement common stocks in the first quarter of 2012. In accordance with Paragraph 21 and Appendix Illustration 23 of R.O.C. SFAS No. 34 and EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds”, the

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Company reclassified the estimated fair value of $2,602,437 to available-for-sale financial assets based on latest quoted fair prices of Dynapack’s OTC stocks at the conversion date and considered the limited impact of the lockout period. The difference of $1,719,142 between the above amount reclassified and the cost of those bonds originally recognized under financial assets at fair value through profit or loss account plus related interest receivable totaling $883,295 was recognized as gain on disposal of investments. The lockout period of the private placement common stocks of Dynapack expired in the third quarter of 2012. Consequently, Dynapack’s common stocks can be traded freely, and are subsequently remeasured as listed and OTC stocks.

  • D. The private placement of convertible bonds of $247,513 held by Delta Capital which was invested after the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds”, is subsequeutly remeasured at their estimated fair value.

  • E. The nature of derivative transactions and related information are summarized as follows:

December 31, 2012

December 31,2012 ber 31,2012
Financial instruments
Forward exchange contracts:
Sell USD / Buy RMB
Sell USD / Buy SGD
Sell USD / Buy CZK
Sell USD / Buy NTD
Buy USD / Sell JPY
Financial instruments
Forward exchange contracts:
Sell USD / Buy EUR
Buy USD / Sell EUR
Sell EUR / Buy NTD		 Contractperiod
USD
6,000
2012.11.21~2013.01.18
SGD
6,379
2012.03.01~2013.07.11
CZK
36,500
2012.10.08~2013.01.23
USD
12,325
2012.10.09~2013.03.28
USD
1,000
2012.12.19~2013.02.26
Contract amount
(Nominal principal)
(in thousands)
December 31,2011		 Contractperiod
EUR
2,850
EUR
1,900
EUR
130
Contract amount
(Nominal principal)
(in thousands)		 Contractperiod
2011.10.14~2012.03.14
2011.10.05~2012.05.02
2011.10.13~2012.01.31

  • a. The subsidiaries entered into forward exchange contracts to manage exposures to foreign exchange rate fluctuations of import or export sales. However, the forward exchange transactions did not meet the criteria for hedge accounting. Therefore, the subsidiaries did not apply hedge accounting.

  • b. The forward exchange contracts of certain subsidiaries met all the criteria for hedge accounting and the related information is described in Note 10(9).

45

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(3) Accounts receivable and overdue receivables

Accounts receivable
Less: Allowance for doubtful accounts

Overdue receivables (shown as other assets)
Less: Allowance for doubtful accounts

Classified to non-current assets held for sale
 2012
2011
35,504,973
$ 35,062,312
$ 408,601)
(
353,625)
(
35,096,372
34,708,687
70,383
78,441
70,383)
(
78,441)
(
-
-
35,096,372
34,708,687
117,896)
(
-
34,978,476
$ 34,708,687
$ December 31,
2012
35,504,973
$ 408,601)
(

35,096,372
70,383
70,383)
(

-
35,096,372
117,896)
(
34,978,476
$

  • A. The Group took out a credit insurance on the accounts receivable from certain main customers, whereby 90% of the receivable amount can be covered when the receivables are uncollectible.

  • B. The subsidiary entered into an agreement with a financial institution to sell its accounts receivable. Under the agreement, the subsidiary is not required to bear uncollectible risk of the underlying accounts receivable, but is liable for the losses incurred on any business dispute. As of December 31, 2012 and 2011, the outstanding accounts receivable sold to the financial institution were as follows:

December 31, 2012

December 31,2012 December 31,2012
Purchaser of
accounts
receivable
Taishin
International
Bank		 Limit
726,000
$		 Accounts
receivable
Amount
sold
advanced
140,036
$ -
$ December 31,2011		 Contract
date
2012.05.23~
2013.05.31		 Interest
rate
-		 Collateral
None
Purchaser of
accounts
receivable
Taishin
International
Bank		 Limit
1,120,175
$		 Accounts
receivable
sold
146,961
$		 Amount
advanced
-
$		 Contract
date
2011.04.28~
2012.05.31		 Interest
rate
-		 Collateral
None

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(4) Inventories

Inventories
December 31,
2012 2011
Raw materials $ 4,893,517 $ 6,770,010
Work in process 1,829,818 2,012,243
Finished goods 9,936,711 11,299,470
Inventory in transit 321,840 570,432
16,981,886 20,652,155
Less: Allowance for inventory obsolescence and
market price decline ( 1,199,887) ( 1,526,042)
15,781,999 19,126,113
Classified to non-current assets held for sale ( 320,967) -
$ 15,461,032 $ 19,126,113
Expense and losses incurred on inventories recognized for the year:
For theyears ended December 31,
2012 2011
Cost of goods sold $ 133,071,472 $ 137,510,522
(Reversal of) loss on long-term purchase contract
(Note) ( 146,653) 202,043
Provision for inventory obsolescence and market
price decline 7,371 678,673
Others 321,744 131,278
133,253,934 138,522,516
Less: Cost of goods sold from discontinued
operations ( 5,549,225) ( 11,416,104)
$ 127,704,709 $ 127,106,412

Expense and losses incurred on inventories recognized for the year:

Note : For details of the (reversal of) loss on long-term purchase contract, please refer to Note 7(3). (5) Available-for-sale financial assets

Current items:
Listed (TSE and OTC) stocks
Adjustment of available-for-sale financial assets

Non-current items:
Listed (TSE and OTC) stocks
Adjustment of available-for-sale financial assets
 2012
2011
615,496
$ 679,608
$ 15,123)
(
155,595)
(
600,373
$ 524,013
$ 2,634,480
$ 189,366
$ 281,564)
(
63,507)
(
2,352,916
$ 125,859
$ December 31,

47

==> picture [596 x 105] intentionally omitted <==

  • A. For Dynapack’s private placement convertible bonds converted into private placement common stocks, please refer to Note 4(2)C.

  • B. The lockout period of the private placement common stocks of Macroblock, Inc. amounting to $45,000 held by the Company expired in the third quarter of 2012. Accordingly, such investment was reclassified from financial assets carried at cost to available-for-sale financial assets.

  • (6) Financial assets carried at cost and prepaid long-term investments

Current items:
Unlisted stocks
Non-current items:
Unlisted stocks
Private placement OTC stocks
Less: Accumulated impairment

Prepaid long-term investments
Unlisted stocks
Fashion Guide Co., Ltd.		 2012
2011
-
$ 86,180
$ 1,703,539
$ 4,151,128
$ -
45,000
1,703,539
4,196,128
38,106)
(
38,900)
(
1,665,433
$ 4,157,228
$ 30,000
$ -
$ December 31,
2012
-
$ 1,703,539
$ -
1,703,539
38,106)
(

1,665,433
$ 30,000
$

  • A. The investments held by the Group were measured at cost since the fair value cannot be measured reliably.

  • B. The private placement - OTC stocks held by the Company were invested before the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds”, and were carried at cost as they had no quoted prices in an active market. The lockout period has expired. Please refer to Note 4(5)B for details.

  • C. The Company acquired 99.97% ownership of AMT for $2,710,152 in 2011. According to the capital increase subscription contract and relevant regulations, the Company has no control power or significant influence on AMT until the reorganization of AMT is completed and convenes shareholders’ meeting to re-elect directors. The Taiwan Taoyuan District Court issued 2007 Zheng-Zi Order No. 1 civil ruling confirmation certificate to AMT on April 5, 2012 and the special meeting of shareholders after the reorganization was convened by the joint committee of the reorganizers and reorganization supervisor to re-elect directors was on June 1, 2012. All board seats were elected and control power was gained by the Company. AMT was included in the consolidated financial statements effective on that day.

  • D. Delta Capital participated in the capital increase in cash of Fashion Guide Co., Ltd. for the purchase of 1,200,000 shares at $25 per share and the effective date was set on January 24, 2013. Delta Capital had remitted the payment of $30,000 on December 26, 2012 which was

==> picture [596 x 105] intentionally omitted <==

recorded as prepaid long-term investment.

  • (7) Long term equity investments accounted for under the equity method

  • A. Details of long-term equity investments accounted for under the equity method are set forth below:

Investee company
Delta Electronics (Thailand) Public
Co., Ltd. (DET)
Amita Technologies, Inc. (Amita)
Digital Projection International Ltd.
(DPI)
Trillion Science, Inc. (Trillion), etc.		 December 31, December 31, December 31,
% (Note)
Book value
20.93
5,662,006
$ 33.42
249,446
32.11
312,564
128,726
6,352,742
$ 2012		 2011
% (Note)
20.93
33.42
32.11		 % (Note)
20.93
33.49
32.11		 Book value
5,232,923
$ 292,791
247,359
138,711
5,911,784
$

  • Note: The percentage of long-term equity investments include the percentage of common shares held by the Group.

  • B. Investment income accounted for under the equity method are set forth below:

Name of investee company
DET
Others
 2012
2011
817,618
$ 537,250
$ 92,804)
(
29,700)
(
724,814
$ 507,550
$ For theyears ended December 31,

  • C. The financial statements of other investee companies for the years ended December 31, 2012 and 2011 were audited by other independent accountants. Long-term equity investments in these companies amounted to $5,662,006 and $5,527,955 as of December 31, 2012 and 2011, respectively, and the related investment income was $817,618 and $499,987 for the years then ended, respectively.

  • D. DNW was dissolved based on a resolution approved during the special shareholder’s meeting on January 15, 2010, and went into the process of liquidation. Pursuant to EITF 88-233 of the Accounting Research and Development Foundation, R.O.C., dated December 29, 1999, “Accounting Treatment of Investee Company Accounted for under the Equity Method during Liquidation”, the subsidiary ceased to be accounted for under the equity method and was excluded from the consolidated financial statements. The process of liquidation had been completed in the second quarter of 2011.

49

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Net book value 4,565,524 19,396,275 9,095,663 485,553 257,222 1,510,287 58,411 410,669 58,330 70,341 5,393,800 41,302,075 6,393,645) 34,908,430
$ ( $
Accumulated impairment 14,528) 569,348) - - - 25) - 27,792) - - - 611,693) - 611,693)
($ ( ( ( ( ($
Accumulated Total
depreciation		 4,580,052
-
$		 26,108,198
6,142,575)
(		 25,393,289
16,297,626)
(		 2,408,522
1,922,969)
(		 1,580,429
1,323,207)
(		 9,342,814
7,832,502)
(		 228,904
170,493)
(		 2,109,886
1,671,425)
(		 190,349
132,019)
(		 90,146
19,805)
(		 5,393,800
-		 77,426,389
35,512,621)
(		 9,448,816)
3,055,171		 67,977,573
32,457,450)
($
$ ( $
Appraisal increment 620,497 - - - - - - - - - - 620,497 - 620,497
$ $
Original cost 3,959,555 26,108,198 25,393,289 2,408,522 1,580,429 9,342,814 228,904 2,109,886 190,349 90,146 5,393,800 76,805,892 9,448,816) 67,357,076
$ ( $
Item Land Buildings Machinery and equipment Molding equipment Computer and communication equipment Testing equipment Transportation equipment Office equipment Leasehold improvements Other equipment Construction in progress and prepayments for equipment Classified to non-current assets held for sale

==> picture [596 x 105] intentionally omitted <==

Appraisal
Accumulated
Accumulated
Net book		 Item
Original cost
increment
Total
depreciation
impairment
value		 Land
1,779,860
$ 620,497
$ 2,400,357
$ -
$ 16,868)
($ 2,383,489
$		 Buildings
20,101,112
-
20,101,112
4,901,978)
(
6,618)
(
15,192,516		 Machinery and equipment
23,195,634
-
23,195,634
13,763,163)
(
-
9,432,471		 Molding equipment
2,168,664
-
2,168,664
1,741,653)
(
-
427,011		 Computer and communication equipment
1,577,409
-
1,577,409
1,256,606)
(
-
320,803		 Testing equipment
8,903,472
-
8,903,472
7,138,616)
(
-
1,764,856		 Transportation equipment
237,344
-
237,344
157,169)
(
-
80,175		 Office equipment
1,851,522
-
1,851,522
1,277,057)
(
-
574,465		 Leasehold improvements
190,800
-
190,800
60,664)
(
-
130,136		 Other equipment
34,516
-
34,516
21,944)
(
-
12,572		 Construction in progress and prepayments for equipment
6,599,291
-
6,599,291
-
-
6,599,291		 66,639,624
$ 620,497
$ 67,260,121
$ 30,318,850)
($ 23,486)
($ 36,917,785
$		 The Company made a revaluation of its assets in accordance with the relevant laws and regulations.
As of December 31, 2012, the revaluation		 increment amounted to $620,497, after deducting the provision for land revaluation increment tax of $527,556 and was recorded under capital reserve.

51

==> picture [596 x 105] intentionally omitted <==

(9) Trademarks

December 31, 2012

Indefinite useful lives
trademarks
Finite useful lives
trademarks		 Original Cost
Accumulated amortization
386,823
$ -
$ 26,341
274)
(
413,164
$ 274)
($		 Net book value
386,823
$ -
26,067
412,890
$

The Company bought registered or under-application trademarks rights such as 、

==> picture [61 x 15] intentionally omitted <==

、 VIVITE K 、麗訊 and totaling $413,164 from Luxeon International

Holding Ltd. in the fourth quarter of 2012. Trademarks registered in certain countries will not be extended by the Company and are assessed to have finite useful lives. The remaining trademarks which have indefinite useful lives shall not be amortized but are tested for impairment annually. (10) Other intangible assets

Land use right
Customer relationship
Others
Classified to non-current assets held for sale
 December 31, December 31,
2012
1,170,479
$ 2,863,405
95,230
4,129,114
14,875)
(
4,114,239
$		 2011
1,228,031
$ 3,311,341
21,256
4,560,628
-
4,560,628
$

For customer relationship acquired due to business combination, please refer to Note 10(10).

==> picture [596 x 105] intentionally omitted <==

(11) Assets leased to others

Idle assets
Land
Buildings
Computer equipment
Testing equipment
Office equipment
Other equipment
Classified to non-
current assets
held for sale

Land
Buildings
Other equipment
Item		 December 31,2012 31,2012 Net
book value
229,602
1,046,331
-
-
2,918
161,791
1,440,642
161,791)
1,278,851
Net
bookvalue
9,773
67,739
127,825
205,337
Net
bookvalue
-
$ 270,479
-
-
-
-
270,479
270,479)
(
-
$
Accumulated
Accumulated
Original cost
depreciation
impairment
229,602
$ -
$ -
$ 2,191,892
597,476)
(
548,085)
(
16,103
16,103)
(
-
310
286)
(
24)
(
327,934
297,992)
(
27,024)
(
188,491
26,700)
(
-
2,954,332
938,557)
(
575,133)
(
188,491)
(
26,700
-

2,765,841
$ 911,857)
($ 575,133)
($ December31,2011
$
(
$
$
$
Accumulated
impairment

(12) Idle assets

53

Item
Buildings
Machinery and equipment
Computer equipment
Testing equipment
Transportation equipment
Office equipment		 December 31,2011
Accumulated
Accumulated
Original cost
depreciation
impairment
41,320
$ 21,820)
($ 19,500)
($ 2,661,346
1,631,652)
(
1,029,694)
(
1,918
1,671)
(
247)
(
94,152
85,938)
(
8,214)
(
88
51)
(
37)
(
8,256
5,528)
(
2,728)
(
2,807,080
$ 1,746,660)
($ 1,060,420)
($

(13) Disposal groups as held for sale and discontinued operations

  • A. On December 19, 2012, the Board of Directors of DelSolar and Neo Solar Power Corporation (NSP) resolved to merge through share exchange. Each common share of DelSolar will be converted into 0.735 share of NSP. DelSolar will be the dissolved company and NSP will be the surviving company after the consolidation. The effective date is temporarily set on May 31, 2013. DelSolar meets the criteria of the subsidiary classified as held for sale due to the merger through share exchange. The assets, liabilities and equity relating to DelSolar classified as disposal group as held for sale meets the definition of discontinued operations to be presented in discontinued operations. The disposal group as held for sale originally belonged to energy management business.

  • B. Assets classified to disposal groups as held for sale:

management business.
Assets classified to disposal groups as held for sale:
Liabilities classified to disposal groups as held for sale:
Cash and cash equivalents
Other current assets
Property, plant and equipment, net
Other assets
Short-term loans
Long-term liabilities - current portion
Other current liabilities
Long-term loans
Other liabilities		 December 31,2012
1,946,553
$ 2,227,915
6,393,645
1,507,839
12,075,952
$
December31,2012
1,853,645
$ 1,480,597
1,470,350
1,853,333
179,294
6,837,219
$
  • C. Liabilities classified to disposal groups as held for sale:

==> picture [596 x 105] intentionally omitted <==

  • D. Details of amounts recognised directly in equity relating to non-current assets held for sale are set forth below:
Cumulative translation adjustments

Capital reserves		 December31,2012
826,101
$ 47,593)
(
778,508
$
  • E. The disclosure of income and cash flows from discontinued operations are as follows:
For theyears ended For theyears ended December 31,
2012 2011(Note)
Operating income from discontinued operations
Net operating revenues $ 4,321,730 $ 9,581,970
Operating costs and expenses ( 6,293,322) ( 12,425,386)
Non-operating income 11,266 7,074
( 1,960,326) ( 2,836,342)
Income tax benefit 20,515 295,394
($ 1,939,811) ($ 2,540,948)
Cash flows from discontinued operations:
For theyears ended December 31,
2012 2011
Cash flows from operating activities ($ 156,868) ($ 2,087,915)
Cash flows from investing activities ($ 946,859) ($ 4,140,668)
Cash flows from financing activities $ 1,361,547 $ 2,363,542

Note: The Group’s loss from discontinued operations for the year ended December 31, 2011 was reclassified based on income or loss from DelSolar’s income statement at the same period and not retroactively adjusted.

  • F. Details of major assets and liabilities accounts of disposal groups as held for sale are as follows:

  • a. Cash and cash equivalents

ows:
Cash and cash equivalents
Cash on hand
Checking and demand deposits
Time deposits
Cash equivalents-commercial paper		 December 31,2012
69
$ 490,093
1,386,426
69,965
1,946,553
$

55

==> picture [596 x 105] intentionally omitted <==

b. Property, plant and equipment

c.
d.		 Short-term loans
Long-term loans
Item
Buildings
Machinery and equipment
Molding equipment
Computer equipment
Testing equipment
Transportation equipment
Office equipment
Construction in progress
and prepayments for
equipment
Unsecured bank loans
Credit lines
Interest rate per annum
Secured bank loans
Credit loans
Less: Current portion
Credit lines
Interest rate per annum		 December31,2012

(a) Please refer to Note 4(16)B. for more details. DelSolar had received the written consent for the unconditional exemption from maintaining liabilities not exceeding 100% of tangible net equity and interest coverage of at least 300% in 2012 by banks on September 26, 2012.

  • (b) Please refer to Note 6 for collaterals of secured banks loans.

==> picture [596 x 105] intentionally omitted <==

(14) Short-term loans

Financial liabilities at fair value through profit or loss
2012
2011
Unsecured bank loans
6,890,912
$ 17,599,492
$ Classified to liabilities directly associated with
non-current assets held for sale
1,853,645)
(
-
5,037,267
$ 17,599,492
$ Credit lines
73,821,776
$ 76,472,572
$ Interest rate per annum
0.48%~5%
0.616%~6.888%
December 31,
2012
2011
Current items:
Financial liabilities held for trading
Adjustment of derivatives
26,286
$ 4,257
$ December 31,		 December 31, December 31,
2011
17,599,492
$ -
17,599,492
$
76,472,572
$
0.616%~6.888%

Current items:
Financial liabilities held for trading
Adjustment of derivatives
2012
26,286
$		 2011
4,257
$

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

  • A. The Group recognized net loss of $133,426 and $443,901 for the years ended December 31, 2012 and 2011, respectively.

  • B. The nature of derivative transactions and related information are summarized as follows:

Financial instruments Contract period
USD
15,200
2012.10.05~2013.03.14
EUR
1,400
2012.11.02~2013.03.14
EUR
3,537
2012.10.05~2013.04.29
EUR
80
2012.11.16~2013.01.15
EUR
16
2012.12.27~2013.02.27
December 31,2012
Contract amount
(Nominal principal)
(inthousands)
December 31, 2011		 Contract period
USD
15,200
2012.10.05~2013.03.14
EUR
1,400
2012.11.02~2013.03.14
EUR
3,537
2012.10.05~2013.04.29
EUR
80
2012.11.16~2013.01.15
EUR
16
2012.12.27~2013.02.27
December 31,2012
Contract amount
(Nominal principal)
(inthousands)
December 31, 2011
Forward exchange contracts:
Sell USD / Buy JPY
Sell USD / Buy EUR
Buy USD / Sell EUR
Sell EUR / Buy NTD
Buy NTD / Sell EUR
Financial instruments
USD
11,800
CZK
33,000
USD
8,000
Contract amount
(Nominal principal)
(in thousands)		 Contractperiod
2011.10.05~2012.03.14
2011.10.04~2012.01.19
2011.11.07~2012.02.15
Forward exchange contracts:
Sell USD / Buy JPY
Sell USD / Buy CZK
Sell USD / Buy NTD
  • a. The subsidiaries entered into forward exchange contracts to manage exposures to foreign exchange rate fluctuations of import or export sales. However, these transactions did not

57

==> picture [596 x 105] intentionally omitted <==

meet all the criteria for hedge accounting. Therefore, the subsidiaries did not apply the hedge accounting.

  • b. The forward exchange contracts of the Company and certain subsidiaries met all the criteria for hedge accounting and the related information is described in Note 10(9).

(16) Long-term loans

Credit loans
Secured bank loans
Less: Current portion

Classified to liabilities directly associated with
non-current assets held for sale

Credit lines
Interest rate per annum		 2012
2011
18,191,714
$ 23,821,055
$ 1,706,666
1,899,024
1,553,530)
(
857,832)
(
18,344,850
24,862,247
1,853,333)
(
-
16,491,517
$ 24,862,247
$ 30,738,649
$ 36,614,574
$ 0.46%~2.37%
0.46%~2.06%
December 31,
2012
18,191,714
$ 1,706,666
1,553,530)
(

18,344,850
1,853,333)
(
16,491,517
$ 30,738,649
$ 0.46%~2.37%

  • A. As of December 31, 2012, the revolving loans of $16,315,000 can be drawn down during the period from June 22, 2012 to November 22, 2015 and are payable before the due date under the agreement.

  • B. On February 16, 2009, DelSolar entered into a five-year syndicated credit facility agreement with 9 financial institutions – Chinatrust Commercial Bank and First Commercial Bank as the lead banks and obtained a credit line in the amount of $4 billion. Under the loan agreement, DelSolar should maintain the following financial ratios during the loan period (based on the audited semiannual/annual consolidated financial statements):

    • a. Current assets to current liabilities ratio of at least 1:1;

    • b. Liabilities not exceeding 100% of tangible net equity;

    • c. Interest coverage of at least 300%; and

    • d. Net book value of tangible assets of at least $4,000,000.

    • Under the agreement, the above revolving loans can be drawn down within five years after August 14, 2009 and are payable before the due date. DelSolar had received the written consent for the unconditional exemption from maintaining liabilities not exceeding 100% of tangible net equity in 2012 and interest coverage of at least 300% in 2012 and 2011 by banks on September 26, 2012 and September 16, 2011.

  • C. Please refer to Note 6 for collaterals of secured bank loans.

  • (17) Accrued pension liabilities

  • A. The Company, Cyntec, DelSolar, and DNIT have a non-contributory and funded defined benefit plan in accordance with the Labor Standards Law, covering all regular employees before the implementation of the Labor Pension Act on July 1, 2005. The defined benefit

==> picture [596 x 105] intentionally omitted <==

plan will continue to cover the employees who choose to remain with the defined benefit plan. Upon retirement, pension payments are calculated based on total years of service and average salary of the last six months prior to retirement. Two base units are earned for the first 15 years of service and one unit for each additional year thereafter, with a maximum number of 45 units. The Company and these subsidiaries contribute 2% of the employees’ monthly salaries and wages to an independent retirement trust fund with the Bank of Taiwan, the trustee. For the years ended December 31, 2012 and 2011, the net periodic pension costs of the Company, Cyntec, DelSolar and DNIT were $184,360 and $190,252, respectively. The balance of the retirement trust fund with the Bank of Taiwan was $696,558 and $676,506 as of December 31, 2012 and 2011, respectively.

  • B. The reconciliation of the pension plan’s funded status to accrued pension liability of the Company, and the subsidiaries registered in Taiwan as of December 31, 2012 and 2011, the respective measurement dates, are as follows:

  • a. The reconciliation of the pension plan’s funded status to accrued pension liability of the Company, and the subsidiaries registered in Taiwan as of December 31, 2012 and 2011, the respective measurement dates, are as follows:

December 31, December 31,
2012 2011
Benefit obligation:
Vested benefit obligation ($ 614,822) ($ 455,556)
Non-vested benefit obligation ( 1,859,632) ( 1,822,387)
Accumulated benefit obligation ( 2,474,454) ( 2,277,943)
Effect of future salary increments ( 1,256,326) ( 1,207,182)
Projected benefit obligation ( 3,730,780) ( 3,485,125)
Fair value of plan assets 696,558 676,506
Funded status ( 3,034,222) ( 2,808,619)
Unrecognized transition obligation 9,239 22,261
Unrecognized net pension loss 1,640,609 1,537,311
Accrued pension liability ( 391,134) ( 358,621)
Accrued pension liability (total) ($ 1,775,508) ($ 1,607,668)
Accrued pension liability (per books) ( 1,780,664) ( 1,612,606)
Prepaid pension expenses (shown as
non-current assets classified as held for sale) 5,156 4,938
($ 1,775,508) ($ 1,607,668)

59

==> picture [596 x 105] intentionally omitted <==

  • b. The related assumptions used for the actuarial valuation were as follows:
Discount rate
Expected return rate on plan assets
Average rate of salary increase		 December 31, December 31,
2012
1.5%~1.75%
1.75%
2.00%~3.5%		 2011
1.75%~2.25%
2.00%
3.00%~3.5%

c. In 2012 and 2011, the details of net periodic pension cost are as follows:

Forthe years ended Forthe years ended December31,
2012 2011
Service cost 57,934 59,694
Interest cost 68,084 74,347
Expected return on plan assets ( 13,593) ( 13,328)
Amortization of unrecognized transition
obligation 15,127 10,094
Unrecognized pension loss 56,808 59,445
Net pension cost $ 184,360 $ 190,252

C. The subsidiaries, DIH and DNH, do not maintain an employee retirement plan. However, certain subsidiaries of DIH and DNH, located in Mainland China maintain defined contribution retirement plans covering all employees. Under the plan, the employees of DIH and DNH subsidiaries contribute to a separate fund an amount based on a certain percentage of the monthly basic salary of the employees for amounts depending on the employee’s position. As of December 31, 2012 and 2011, the pension reserves of DIH’s and DNH’s subsidiaries were $955,660 and $990,443, respectively.

  • D. DEJ and the subsidiaries of DIH and DNH located in the United States have defined contribution plans in accordance with the local regulations.

E. Effective July 1, 2005, the Company, Cyntec, DelSolar, DNIT, Ayecom, NEM, DelBio, Delta Capital and Delta Robot (collectively referred herein as the subsidiaries registered in Taiwan) have established a defined contribution pension plan under the Labor Pension Act (the “New Plan”) for eligible employees holding Republic of China citizenship. The Company and the subsidiaries registered in Taiwan deposit the pension amount based on 6% of the employees’ monthly salaries and wages into each employee’s personal pension account with the Bureau of Labor Insurance. For the years ended December 31, 2012 and 2011, the pension cost of the Company and the subsidiaries registered in Taiwan amounted to $270,201 and $255,445, respectively.

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(18) Common stock

  • A. In accordance with the Company’s Articles of Incorporation, the total authorized common stock is 2,700,000,000 shares (including 100,000,000 shares for stock warrants conversion). As of December 31, 2012, the total issued and outstanding common stock was 2,421,178,000 shares with par value of $10 (in dollars) per share.

  • B. On December 20, 2004, the Board of Directors of the Company adopted a resolution that allowed certain stockholders to issue 16,000,000 units of global depository receipts (GDRs), represented by 80,000,000 shares of common stock (Deposited Shares), with one unit of GDR representing 5 shares of common stock. After obtaining approval from SFB, these GDRs were listed on the Securities Exchange of Luxembourg, with total proceeds of US$134,666,000. The issuance of GDRs was represented by outstanding shares, therefore, there is no dilutive effect on the common shares’ equity. The main terms and conditions of the GDRs are as follows:

  • a. Voting rights GDR holders may, pursuant to the Depositary Agreement and the relevant laws and regulations of the R.O.C., exercise the voting rights pertaining to the underlying common shares represented by the GDRs.

  • b. Sales and redemption of the underlying common shares represented by the GDRs when the holders of the GDRs request the Depositary to redeem the GDRs in accordance with the relevant R.O.C. regulations and the provisions in the Depositary Agreement, the Depositary may (i) deliver the underlying common shares represented by the GDRs to the GDR holders, or (ii) sell the underlying common shares represented by the GDRs in the R.O.C. stock market on behalf of the GDR holder. The payment of proceeds from such sale shall be made subject to the relevant R.O.C. laws and regulations and the provisions in the Depositary Agreement.

  • c. Distribution of dividends, preemptive rights and other rights and interests of GDR units bear the same rights as common shares.

  • d. After considering the stock dividend distribution year by year, as of December 31, 2012, there were 1,266,000 units outstanding, representing 6,330,000 common shares of the Company’s common stock.

(19) Capital reserve

The R.O.C. Company Law requires that the capital reserve derived from the issuance of new shares at a premium and endowments received shall be exclusively used to offset against accumulated deficit, increase capital or distribute by cash to its original shareholders in proportion to the number of shares being held by each of them. The capital reserve can be used to offset against accumulated deficit only when legal reserve and special reserve are insufficient. Only capital reserve from paid-in capital in excess of par value and donated surplus can be used to increase capital and the total amount shall be limited to 10% of outstanding capital each year.

61

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(20) Legal reserve

The R.O.C. Company Law requires that the Company shall set aside 10% of its net income as legal reserve after offsetting against prior years’ losses until the legal reserve equals the Company’s paid-in capital. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.

(21) Undistributed earnings

  • A. As stipulated in the Company's Articles of Incorporation, the current year's earnings, if any, shall be distributed in the following order:

  • a. Payment of all taxes and dues.

  • b. Offset against prior years' operating losses, if any.

  • c. Set aside 10% of the remaining amount as legal reserve, unless the accumulated amount of the legal reserve has reached the total authorized capital of the Company.

  • d. Setting aside or reversing a special reserve according to relevant regulations when necessary.

  • e. The amount of distributable earnings after deducting items a, b, c and d, plus beginning undistributed earnings (the earnings), shall be distributed in the following percentage according to the resolution approved at the stockholders’ meeting:

    • (a) Directors' remuneration: up to 1% of the earnings.

    • (b) Employees' bonus: at least 3% of the earnings. The Company can issue the employee stock bonus to qualified employees of subsidiaries. The related regulations should be authorized by the Company’s Board of Directors or authorized person.

    • (c) Stockholders' bonus: balance of the earnings after deducting (a) and (b).

  • B. The Company’s dividend policy is summarized below:

  • As the Company operates in a volatile business environment and is in the stable growth stage, the residual dividend policy is adopted taking into consideration the Company’s financial structure, operating results and future expansion plans. According to the dividend policy adopted by the Board of Directors, at least 50% of the Company’s earnings shall be appropriated as dividends, and cash dividends shall account for at least 5% of the total dividends distributed.

  • C. a. The appropriations of 2011 and 2010 earnings was approved by the shareholders during their meeting on June 19, 2012 and June 24, 2011, respectively. Details are summarized below:

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Dividends
Amount
per share
(Note A)
(in dollars)
Appropriation for legal
1,099,103
$ reserve
(Reversal of) Appropriation
3,167,470)
(
for special reserve
Cash dividends
8,417,359
3.49448218
$ 2011		 2010 2010
Amount
(Note B)
1,575,421
$ 4,796,006
12,480,065		 Dividends
per share
(in dollars)
5.19546489
$

  • Note A: The shareholders during their meeting had approved to distribute employees’ cash bonuses of $1,536,340 and directors’ and supervisors’ remuneration of $16,700.

  • Note B: The shareholders during their meeting had approved to distribute employees’ cash bonuses of $2,914,390 and directors’ and supervisors’ remuneration of $16,700.

  • There was no difference in the amounts of the earnings appropriation as approved by the stockholders with that proposed by the Board of Directors. The information will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange Corporation.

  • b. The appropriations of 2012 earnings had been proposed by the Board of Directors on March 11, 2013. Details are summarized below:

11, 2013. Details are summarized below:
Appropriation for legal reserve
Appropriation for special reserve
Cash dividends		 2012
Amount
(Note A)
1,610,954
$ 1,918,413
$ 12,843,222
$		 Dividends
per share
(in dollars)
5.3
$

  • Note A: The Board of Directors had proposed to distribute employees’ cash bonuses of $2,047,925 and directors’ and supervisors’ remuneration of $30,400.

  • Note B: The dividend per share is based on the number of outstanding common shares of the Company as of February 26, 2013. If the number of outstanding shares of the Company changes due to exercise of employee stock options and consequently leads to a change in the dividend distribution ratio approved during the general meeting, the Board of Directors of the Company is authorized to adjust the ratio based on the number of outstanding shares.

As of March 11, 2013, the abovementioned 2012 earnings appropriation had not been approved by the stockholders.

  • D. The Group’s estimated amounts of employees’ bonus and directors’ and supervisors’ remuneration amounted to $2,784,538 and $26,878 for 2012, respectively, and $2,078,722 and

63

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$18,464 for 2011, respectively. The basis of estimates is based on a certain percentage of net income prescribed by the Company’s Articles of Incorporation and resolved by the Board of Directors, after taking into account the legal reserve and other factors. The calculation of shares of stock bonus distributed is based on the closing price of the Company’s common stock at the previous day of the next stockholders’ meeting after taking into account the effects of ex-rights and ex-dividends. While, if the estimated amounts are different from the amounts approved by the stockholders subsequently, the difference is recognized as gain or loss in the following year. However, if the accrued amounts for employees’ bonus and directors’ and supervisors’ remuneration are significantly different from the distributed amounts resolved by the Board of Directors, then the differences shall be adjusted retroactively in the statements of income for the current year. The actual distribution of 2011 earnings was as stated in the previous paragragh. The resolved amounts of the bonus to employees and directors’ and supervisors’ remuneration were consistent with the resolutions during the shareholders’ meeting and the same amount had been charged against earnings for 2011.

  • E. The Taiwan imputation tax system requires that any undistributed current earnings, on tax basis, be subject to an additional 10% corporate income tax if the earnings are not distributed in the following year.

  • F. As of December 31, 2012 and 2011, details of tax credits of the Company are as follows:

December 31, December 31, December 31,
2012 2011
Imputation tax credit account balance $ 489,796 $ 131,759
2012(Estimated) 2011 (Actual)
Creditable tax ratio 2.21% 7.40%
As of December 31, 2012 and 2011, the undistributed earnings are as follows:
December 31,
2012 2011
Before January 1, 1998 $ 685,952 $ 685,952
On and after January 1, 1998
-10% additional tax assessed 6,010,391 1,368,317
-10% additional tax unassessed 16,109,542 10,991,031
$ 22,805,885 $ 13,045,300
  • G. As of December 31, 2012 and 2011, the undistributed earnings are as follows:

(22) Share-based payment - employee compensation plan

  • A. The Company issued 60,000,000 units of employee stock options with a unit of employee stock option representing one share of common stock, and the total number of shares of new common stock to be issued due to the exercise of employee stock options is 60,000,000, as resolved by the Board of Directors on October 29, 2007. The Company obtained approval from SFB on November 28, 2007.

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  • B. Through a share swap agreement, the Company acquired all the outstanding shares of Cyntec Co., Ltd. (Cyntec) in addition to the shares already held by the Company accounted for under the equity method and thereby assumed the employee stock options of Cyntec. Details are described below:

  • Cyntec issued 10,000,000 units of employee stock options with a unit of employee stock option representing one share of common stock. The total number of shares of new common stock to be issued due to the exercise of employee stock option is 10,000,000, as resolved by the Board of Directors on October 30, 2007. Cyntec obtained approval from SFB on November 21, 2007.

  • C. As of December 31, 2012, the Company’s share-based payment transactions are set forth below:

below:
Type of
arrangement		 Grant date
2007.12.18
2007.12.3
2007.12.27		 Actual
resignation Estimated
rate in the
future
Quantity
Contract
Vesting
current
resignation
granted
period
conditions
period
rate
60,000,000
6 years
(Note B)
1.03%
0.00%
5,355,070
6 years
(Note B)
0.00%
0.00%
(Note A)
254,195
6 years
(Note B)
0.00%
0.00%
(Note A)
First employee stock
options compensation
plan of the Company
Second employee stock
options compensation
plan of Cyntec assumed
by the Company
"

  • Note A: Quantity granted is calculated based on the share conversion ratio between the Company and Cyntec.

  • Note B: Two years’ service vested 40%; three years’ service vested 70%; four years’ service vested 100%.

  • D. The exercise price under the stock-based employee compensation plan is based on the closing price of the Company’s common stock at the grant date and is subject to adjustments due to changes in the number of common shares and issuance of cash dividends. The vesting period of the Company’s employee stock option plan is six years. The employees may exercise the stock options in installments after the stock options are granted for two years.

65

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  • E. Details of the first employee stock options compensation plan of the Company are set forth below:

  • a. Details of the employee stock options are set forth below:

For theyears ended December 31, theyears ended December 31, theyears ended December 31,
2012 2011
Weighted- Weighted-
average average
exercise price exercise price
Stock options No. of shares (in dollars) No. of shares (in dollars)
Options outstanding at 31,866,534 $ 73.0 39,609,746 $ 76.8
beginning of year
Options granted - - - -
Options exercised ( 15,625,936) 70.8 ( 6,769,112) 76.2
Options revoked ( 329,800) 72.8 ( 974,100) 74.1
Options outstanding at end
of year (Note) 15,910,798 $ 70.1 31,866,534 $ 73.0
Options exercisable at end
of year 15,910,798 31,866,534
Options authorized but not
granted at end of year - -

Note: Weighted-average exercise price of options outstanding at beginning of year was adjusted due to the change in common stock after taking into account stock dividends and employees’ bonus distributed.

  • b. Details of the employee stock options outstanding are set forth below:

December 31, 2012

Range of
exercise price
(in dollars)
70.1
$		 Weighted-
average
Weighted-
expected
average
No. of
remaining
exercise price
shares
vesting period
(in dollars)
15,910,798
0.96 years
70.1
$ Stock options outstanding		 Weighted-
average
Weighted-
expected
average
No. of
remaining
exercise price
shares
vesting period
(in dollars)
15,910,798
0.96 years
70.1
$ Stock options outstanding		 Stock options exercisable Stock options exercisable
No. of
shares
15,910,798		 Weighted-
average
expected
remaining
vesting period
0.96 years		 No. of
shares
15,910,798		 Weighted-
average
exercise price
(in dollars)
70.1
$

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December 31, 2011

Range of
exercise price
(in dollars)
73.0
$		 Weighted-
average
Weighted-
expected
average
No. of
remaining
exercise price
shares
vesting period
(in dollars)
31,866,534
1.97 years
73.0
$ Stock options outstanding		 Weighted-
average
Weighted-
expected
average
No. of
remaining
exercise price
shares
vesting period
(in dollars)
31,866,534
1.97 years
73.0
$ Stock options outstanding		 Stock options exercisable Stock options exercisable
No. of
shares
31,866,534		 Weighted-
average
expected
remaining
vesting period
1.97 years		 No. of
shares
31,866,534		 Weighted-
average
exercise price
(in dollars)
73.0
$

  • F. Details of the employee stock options compensation plan of Cyntec are set forth below:

  • a. Details of the employee stock options assumed by the Company are set forth below: The second employee stock options compensation plan

For the years ended December 31,

2012 2012 2012 2011 2011 2011
Weighted- Weighted-
average average
No. of exercise price No. of exercise price
Stockoptions shares (indollars) shares (indollars)
Options outstanding at 2,810,326 $ 38.09 4,370,977 $ 40.08
beginning of year
Options granted - - - -
Assumed through
business combination - - - -
Options exercised ( 2,168,247) 37.57 ( 1,560,651) 39.70
Options revoked - - - -
Options outstanding at
end of year (Note) 642,079 $ 36.59 2,810,326 $ 38.09
Options exercisable at
end of year 642,079 2,810,326
Options authorized but
not granted at end of
year - -

Note: Weighted-average exercise price of options outstanding at beginning of period was adjusted due to the change in common stock after taking into account stock dividends and employees’ bonus distributed.

67

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  • b. Details of the employee stock options outstanding are set forth below: Second employee stock options compensation plan

December 31, 2012

Range of
exercise price
(in dollars)
$36.3~$36.6
Range of
exercise price
(in dollars)
$37.8~$38.1		 Weighted-
average
Weighted-
Weighted-
expected
average
average
No. of
remaining
exercise price
No. of
exercise price
shares
vesting period
(in dollars)
shares
(in dollars)
642,079
0.93 years
36.59
$ 642,079
36.59
$ Stock options outstanding
Stock options exercisable
December 31,2011		 Stock options exercisable Stock options exercisable
No. of
shares
642,079
36.59
$
Weighted-
average
Weighted-
expected
average
No. of
remaining
exercise price
shares
vesting period
(in dollars)
2,810,326
1.92 years
38.09
$ Stock options outstanding		 Stock options exercisable
No. of
shares
2,810,326		 Weighted-
average
No. of
exercise price
shares
(in dollars)
2,810,326
38.09
$
38.09
$

G. The following sets forth the pro forma net income and earnings per share based on the assumption that the compensation cost is accounted for using the fair value method for the first employee stock options compensation plan of the Company which was granted before the effectivity of R.O.C. SFAS No. 39, “Accounting for Share-based Payment”:

Consolidated net
Net income stated in
income
statement of income
Pro forma net income
Basic earnings per
EPS stated in the
share (EPS)
statement of income
(in dollars)
Pro forma EPS
Diluted EPS
EPS stated in the
(in dollars)
statement of income
Pro forma EPS		 For the years endedDecember 31, For the years endedDecember 31,
2012
16,109,542
$ 16,109,542
6.68
6.68
6.58
6.58		 2011
10,991,031
$ 10,872,013
4.58
4.53
4.49
4.44

For the stock options granted before January 1, 2008 with the compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The weighted-average parameters used in the estimation of the fair value and estimated results are as follows:

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a. Parameters:

For the years ended December 31,

Dividend yield rate
Expected price volatility
Risk-free interest rate
Expected vesting period
Weighted-average fair value per share
(in dollars)		 2012
0%
33.68%
2.46%
4.45 years
70.1
$		 2011
0%
33.68%
2.46%
4.45 years
73.0
$

b. Conclusion:

For the years ended December 31,

Weighted-average fair value of stock
per share (in dollars)
Compensation cost accounted for using
fair value method		 2012
31.7991
$ (Note)		 2011
31.7991
$ 119,018
$

Note: No compensation cost was incurred due to all stock options had been vested.

H. Information on estimation of fair value of employee stock options of Cyntec assumed by the Company using the Black-Scholes option-pricing model on the grant date are as follows:

Expected WeightedStock Exercise Expected Expected dividend Risk-free average Type of Grant price price price vesting yield interest fair value arrangment date (in dollars)(in dollars) volatility period rate rate (in dollars) Second 2007.12.3 $ 100.5 $ 41.8 40.23% 2.33 years 0.00% 0.853% $60.7591 employee stock options compensation plan of Cyntec assumed by the Company 〃 2007.12.27 100.5 41.4 40.23% 2.48 years 0.00% 0.877% 61.3189

69

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I. DelSolar’s share-based payment transactions:

  • a. As of December 31, 2012, DelSolar’s share-based payment transactions are set forth below:
Type of
arrangement
First employee
stock options
compensation
plan
Second employee
stock options
compensation
plan
Third employee
stock options
compensation
plan
Fourth employee
stock options
compensation
plan
Fifth employee
stock options
compensation
plan
Sixth employee
stock options
compensation
plan
Seventh employee
stock options
compensation
plan
Capital increase
in cash reserved
for employees
Issuance of new
restricted
employee shares
(Note A)		 Grant date
2005.6.20
2007.9.14
2007.11.20
2009.8.13
2009.10.26
2010.4.22
2010.10.18
2012.5.1
2012.10.24		 Quantity
granted
(Shares)
4,600,000
1,500,000
4,000,000
2,000,000
1,470,000
730,000
2,100,000
1,247,000
2,700,000		 Actual
resignation
Contract
Vesting
rate in the
period
conditions
current period
6 years
Two years’ service
vested 40%;
three years’ service
vested 70%;
four years’ service
vested 100%
-
6 years
Two years’ service
vested 25%;
three years’ service
vested 50%;
four years’ service
vested 75%;
five years’ service
vested 100%
3.47%
7 years
〃
14.03%
7 years
〃
22.87%
7 years
〃
26.45%
7 years
〃
26.57%
7 years
〃
30.54%
-
Immediatedly
vested
-
2 years
Note B
2.44%		 Estimated
future
resignation
rate
-
-
-
-
-
7.00%
7.00%
-
7.00%

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  • (Note A) The new restricted employee shares issued by DelSolar shall not be transferable during the vesting period but do not restrict the right to vote and participate in the dividend distribution. Employees who leave the company during the vesting period shall return the stock, but the dividends received need not be returned.

  • (Note B) One year’s service and performance appraisal of excellent vested 50%; Two years’ service and performance appraisal of excellent vested 100%.

  • b. Details of the employee stock options are set forth below:

For the years ended December 31,

2012 2012 2011 2011
Weighted- Weighted-
average average
No. of exercise price No. of exercise price
Stock options shares (in dollars) shares (in dollars)
Options outstanding at 8,191,000 $ 60.77 9,426,750 $ 61.33
beginning of year
Options granted - - - -
Options revoked ( 1,711,000) 59.71 ( 1,198,500) 65.85
Options exercised - - ( 37,250) 30.10
Options outstanding at end
of year 6,480,000 57.50 8,191,000 60.77
Options exercisable at end
of year 4,264,750 61.08 3,026,500 68.24

71

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  • c. As of December 31, 2012 and 2011, the range of exercise price of stock options outstanding was $28.3~$61.7 (in dollars) and $29.6~$85 (in dollars), respectively, and the weighted-average remaining vesting periods were as follows:

For the years ended December 31,

First employee stock options
compensation plan
Second employee stock options
compensation plan
Third employee stock options
compensation plan
Fourth employee stock options
compensation plan
Fifth employee stock options
compensation plan
Sixth employee stock options
compensation plan
Seventh employee stock options
compensation plan		 2012
-
0.70years
1.89years
3.62years
3.82years
4.31years
4.80years		 2011
-
1.70years
2.89years
4.62years
4.82years
5.31years
5.80 years

  • d. As the fair value of employee stock options under the fourth and fifth employee stock options plans issued by DelSolar from January 1, 2008 through December 31, 2009 cannot be measured reliably, they are measured at their intrinsic value. According to the Gin-Gwen-Tz Letter No. 0960065898 of the former Financial Supervisory Commission, Executive Yuan, R.O.C., dated December 12, 2007, the intrinsic value is referred to as the difference between fair value and exercise price of shares. The fair value of shares of DelSolar is measured based on their net asset value before they are listed on the Stock Exchange. The Gin-Gwen-Tz Letter No. 0960065898 is applicable to the fourth and fifth employee stock options plans as they were issued prior to January 1, 2010.

  • e. For the stock options under the sixth and seventh employee stock options plans, capital increase in cash reserved for employees and issuance of new restricted employees shares granted by the Company after (on) January 1, 2010 with the compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model in accordance with the Gin-Gwen-Tz Letter No. 0990006370 of the former Financial Supervisory Commission, Executive Yuan, R.O.C., dated March 15, 2010. The weighted-average parameters used in the estimation of the fair value are as follows:

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Type of
arrangment
Sixth
Seventh
Capital
increase in
cash reserved
for employees
New restricted
employee
shares		 Grant
date

2010.04.22
2010.10.18
2012.05.01
2012.10.24		 Stock
price
(indollars)
(
$ 53.64
58.88
18.99
11.65		 Exercise
price
indollars)
$ 53.3
65.6
14.7
-		 Expected
price
volatility
37.18%
32.82%
53.61%
-		 Expected
vesting
period
5.25 years
5.25 years
0.01 years
2.00 years		 Expected
dividend
yield
rate
0%
0%
0%
-		 Risk-free
interest
rate
1.01%
0.90%
0.71%
-		 Weighted-
average
fair value
(indollars)
$ 18.77
16.01
4.29
11.65

. NEM’s share-based payment transactions

  • a. As of December 31, 2012, NEM’s share-based payment transactions are set forth below:
Type of
arrangment
First employee stock
options
compensation plan
of the Company
Second employee
stock options
compensation plan
of the Company
Third employee
stock options
compensation plan
of the Company
Fourth employee
stock options
compensation plan
of the Company
Fifth employee stock
options
compensation plan
of the Company		 Grant
date
2009.11.25
2010.04.30
2010.12.21
2011.12.21
2012.12.10		 Quantity
granted
572,600
590,000
388,000
1,299,400
847,000		 Contract
period
8 years
8 years
8 years
8 years
8 years		 Vesting
conditions
(Note)
(Note)
(Note)
(Note)
(Note)		 Actual
resignation rate
in the current
period
44.29%
59.55%
0.00%
19.75%
0.00%		 Estimated
future
resignation
rate
44.53%
8.27%
14.11%
15.72%
22.66%

Note: Two years’ service vested 50%; three years’ service vested 75%; four years’ service vested 100%.

73

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  • b. Details of the employee stock options compensation plan of NEM are set forth below:

  • (a) Details of the employee stock options are set forth below:

For the years ended December 31,

Stock options
Options outstanding at
beginning of year
Options granted
Options exercised
Options forfeited

Options outstanding at
end of year
Options exercisable at
end of year
Options authorized but not
granted at end of year		 Weighted-
average
No. of
exercise price
shares
(in dollars)
2,372,400
10
$ 847,000
10
-
-
614,000)
(
10

2,605,400
10
$ 422,000
303,000
2012		 Weighted-
average
No. of
exercise price
shares
(in dollars)
1,480,600
10
$ 1,299,400
10
-
-
407,600)
(
10
2,372,400
10
$ 206,000
1,150,000
2011
  • (b) Details of the employee stock options outstanding are set forth below:
Range of
exercise price
(in dollars)
10
$ Range of
exercise price
(in dollars)
10
$		 December 31,2012 December 31,2012 December 31,2012
Weighted-
Weighted-
average
average
Weighted-
exercise
exercise
average
No. of
remaining
price
No. of
exercise price
shares
vesting period
(in dollars)
shares
(in dollars)
2,605,400
6.79 years
10
$ 422,000
10
$ Stockoptions outstanding
Stockoptions exercisable
December 31,2011
No. of
shares
2,605,400
Weighted-
Weighted-
average
average
exercise
exercise
No. of
remaining
price
shares
vesting period
(in dollars)
2,372,400
7.14 years
10
$ Stockoptions outstanding		 Weighted-
average
No. of
exercise price
shares
(in dollars)
206,000
10
$ Stockoptions exercisable
No. of
shares
2,372,400		 Weighted-
average
exercise
remaining
vesting period
7.14 years		 No. of
shares
206,000
  • c. The Board of Directors of NEM adopted a resolution to issue 572,600 units of employee stock options on November 25, 2009. As the fair value of shares of NEM cannot be measured reliably, they are measured at their intrinsic value. The intrinsic value is referred to as the difference between fair value and exercise price of shares. The shares’

==> picture [596 x 105] intentionally omitted <==

fair value is measured based on their net asset value as per latest financial statements of NEM, which were audited by independent accountants, when they are unlisted and will be measured at their market price after being listed on the Stock Exchange. As the shares’ net asset value as at December 31, 2012 and 2011 were both lower than the subscription price, no expense was incurred on share-based payment transactions for those employee stock options.

  • d. For the NEM’s stock options granted after January 1, 2010 with the compensation cost accounted for using the fair value method, their fair value on the grant date is estimated using the Black-Scholes option-pricing model. The weighted-average parameters used in the estimation of the fair value and estimated results are as follows:
Grant date
Dividend yield
rate
Expected price
volatility
Risk-free interest
rate
Expected vesting
period
Weighted-average
fair value per
share (in dollars)
Weighted-average
fair value of stock
options per share
(in dollars)		 April 30,2010
-
51.68%
1.30%
5.38 years
$ 10
$ 1.5746		 December 21,2010
-
48.62%
1.13%
5.38 years
$ 10
$ 2.3217		 December 21,2011
-
50.18%
1.09%
5.38 years
$ 10
$ 1.2495		 December 10,2012
-
47.48%
0.99%
5.38 years
$ 10
$ 0.3621
  • K. Compensation cost incurred on the Group’s equity-settled share-based payment transactions for the years ended December 31, 2012 and 2011 was $14,658 and $43,111, respectively.

75

==> picture [596 x 105] intentionally omitted <==

(23) Income tax

A. The components of deferred income tax assets and liabilities are as follows:

December 31,2012 December 31,2012 December 31,2012 December 31,2012 December 31,2011 December 31,2011 December 31,2011
Original Original
amount Tax effect amount Tax effect
Current:
Allowance for inventory
obsolescence $ 902,507 $ 164,260 $ 1,142,567 $ 231,322
Unrealized exchange gain ( 35,026) ( 5,954) ( 96,675) ( 18,826)
Loss on long-term purchase
contract 344,225 58,518 490,878 83,449
Others 2,160,334 400,102 1,609,458 245,912
Loss carryforwards 8,406 1,429 110,701 18,803
Investment tax credits 826,465 497,084
1,444,820 1,057,744
Less: Valuation allowance ( 841,311) ( 459,830)
603,509 597,914
Classified to non-current
assets held for sale ( 13,917) -
Net deferred income tax
assets - current $ 589,592 $ 597,914
Non-current:
Long-term equity
investments ($ 27,621,599) ($ 4,695,638) ($ 29,658,186) ($ 5,041,856)
Depreciation difference
between tax and financial
basis 4,224,008 1,010,768 3,556,610 805,473
Impairment loss 3,131,844 595,208 1,108,303 258,217
Pension liability 2,332,478 437,127 2,141,384 367,293
Others ( 10,137,724) ( 668,354) ( 6,414,236) ( 513,537)
Loss carryforwards 12,082,230 2,063,275 3,411,208 571,296
Investment tax credits 11,551 964,267
( 1,246,063) ( 2,588,847)
Less: Valuation allowance ( 2,418,175) ( 1,278,458)
( 3,664,238) ( 3,867,305)
Classified to non-current
assets held for sale ( 483,778) -
Net deferred income tax
liabilities - non-current ($ 4,148,016) ($ 3,867,305)

==> picture [596 x 105] intentionally omitted <==

  • B. As of December 31, 2012 and 2011, income tax expense and income tax payable are reconciled as follows:
econciled as follows:
For theyears ended December 31,
2012 2011
Income tax expense $ 3,328,523 $ 2,825,962
(Including income tax benefit of $20,515
and $295,394 from discontinued
operations)
Effect of deferred income tax ( 158,210) 447,289
Difference between tax credits approved
foreign income and tax credits used ( 20,563) ( 29,729)
Over provision of income tax in prior
years, net 130,806 9,807
Prepaid income tax ( 1,160,714) ( 1,461,430)
Income tax payable of prior period 258,306 190,823
Tax effect due to changes in consolidated
subsidiaries - 26,321
Others ( 83,990) 58,502
Income tax payable - net $ 2,294,158 $ 2,067,545
Income tax refundable ($ 1,687) ($ 25,374)
Shown as non-current assets classified as
held for sale ( 1,019) -
Income tax payable 2,296,864 2,092,919
$ 2,294,158 $ 2,067,545

C. As of December 31, 2012, losses available to be carried forward by the Company and subsidiaries and investment tax credits of the companies registered in Taiwan in accordance with the “Statute for Upgarding Industries” were as follows:

Source
Loss carryforwards
R&D expenditures
Training expenditures
Expenditures for procurement of
machinery and equipment		 Unused credits
2,064,704
$ 834,032
$ 3,308
676
838,016
$		 Year of expiration
Between 2014 and 2022
2013
2013
2013

D. Under the PRC tax regulations, the corporate income tax of DDG shall be levied at the preferential rate of 15 percent as it was classified as high-tech enterprise after government review. Furthermore, because its additional investment in 2007 is included in the incentive items specified in the “Catalogue for the Guidance of Foreign Investment Industries”, the tax payable for the income from the additional investment can be calculated separately. Thus, for

77

==> picture [596 x 105] intentionally omitted <==

this part, DDG is exempt from corporate income tax for the first and second profit-making years and is subject to a 50% reduction of corporate income tax from the third through fifth profit-making years. Year 2012 is the last year wherein DDG can apply the 50% reduction of corporate income tax, with a tax rate of 12.5%.

  • E. Under the PRC tax regulations, DWH is exempt from corporate income tax for the first and second years since 2008 and is subject to a 50% reduction of corporate income tax from the third through fifth years since 2008. Year 2012 is the last year wherein DWH can apply the 50% reduction of corporate income tax.

  • F. As of December 31, 2012, the status of the Group’s assessed and approved income tax returns are as follows:

are as follows:
The Company
Cyntec, DelSolar, AMT, Delta Capital
DelBio, DNIT, NEM and Ayecom
Delta Robot and DSGL		 Years Assessed byTax Authority
2010
2010
Not assessed yet

(24) Earnings per share

For the year ended December 31, 2012

Basic EPS
Net income from
continuing operations
Dilutive effect of
common stock
equivalents:
Employee stock options
Employee bonus (Note)
Diluted EPS
Net income from
continuing operations		 Income
before
Net
income tax
income
(
21,398,391
$ 18,049,353
$ -
-
-
-
21,398,391
$ 18,049,353
$ Amount		 Weighted-
average
outstanding
common
shares
in thousands)
2,410,764
6,573
31,024
2,448,361		 Earnings per
share (indollars)		 Earnings per
share (indollars)
Income
before
income tax
21,398,391
$ -
-
21,398,391
$		 Income
before
income tax
8.88
$ 8.74
$		 Net income
7.49
$
7.37
$

For the year ended December 31, 2012

Basic LPS
Net loss from
discontinued
operations

Diluted LPS
Net loss from
discontinued
operations

Basic EPS
Net income from
continuing operations
Dilutive effect of
stock equivalents:
Employee stock options
Employee bonus (Note)
Diluted EPS
Net income from
continuing operations
Basic EPS
Net income from
discontinued operations
Extraordinary gain
Diluted EPS
Net income from
discontinued operations
Extraordinary gain		 Weighted-
average
outstanding
Loss
common
before
shares
income tax
Net loss
(in thousands)
1,960,326)
($ 1,939,811)
($ 2,410,764
(
1,960,326)
($ 1,939,811)
($ 2,448,361
(
Amount
Weighted-
average
outstanding
Income
common
before
Net
shares
income tax
income
(inthousands)
16,447,706
$ 13,326,350
$ 2,401,627
-
-
9,906
-
-
37,508
16,447,706
$ 13,326,350
$ 2,449,041
2,836,342)
($ 2,540,948)
($ 2,401,627

205,629
$ 205,629
$ 2,401,627
2,836,342)
($ 2,540,948)
($ 2,449,041

205,629
$ 205,629
$ 2,449,041
Forthe yearendedDecember
Amount		 Weighted-
average
outstanding
Loss
common
before
shares
income tax
Net loss
(in thousands)
1,960,326)
($ 1,939,811)
($ 2,410,764
(
1,960,326)
($ 1,939,811)
($ 2,448,361
(
Amount
Weighted-
average
outstanding
Income
common
before
Net
shares
income tax
income
(inthousands)
16,447,706
$ 13,326,350
$ 2,401,627
-
-
9,906
-
-
37,508
16,447,706
$ 13,326,350
$ 2,449,041
2,836,342)
($ 2,540,948)
($ 2,401,627

205,629
$ 205,629
$ 2,401,627
2,836,342)
($ 2,540,948)
($ 2,449,041

205,629
$ 205,629
$ 2,449,041
Forthe yearendedDecember
Amount		 Weighted-
average
outstanding
Loss
common
before
shares
income tax
Net loss
(in thousands)
1,960,326)
($ 1,939,811)
($ 2,410,764
(
1,960,326)
($ 1,939,811)
($ 2,448,361
(
Amount
Weighted-
average
outstanding
Income
common
before
Net
shares
income tax
income
(inthousands)
16,447,706
$ 13,326,350
$ 2,401,627
-
-
9,906
-
-
37,508
16,447,706
$ 13,326,350
$ 2,449,041
2,836,342)
($ 2,540,948)
($ 2,401,627

205,629
$ 205,629
$ 2,401,627
2,836,342)
($ 2,540,948)
($ 2,449,041

205,629
$ 205,629
$ 2,449,041
Forthe yearendedDecember
Amount		 Loss
before
income tax
Net loss
0.82)
$ 0.81)
($ 0.80)
$ 0.79)
($ share(in dollars)
Loss per
Income
before
income tax
Netincome
6.85
$ 5.55
$ 6.72
$ 5.44
$ 1.19)
($ 1.06)
($ 0.09
$ 0.09
$ 1.16)
($ 1.03)
($ 0.08
$ 0.08
$ 31,2011
Earnings per
share(in dollars)
Loss
before
income tax
0.82)
$ (
0.80)
$ (
31,2011
Income
before
Net
income tax
income

16,447,706
$ 13,326,350
$ -
-
-
-
16,447,706
$ 13,326,350
$ 2,836,342)
($ 2,540,948)
($ 205,629
$ 205,629
$ 2,836,342)
($ 2,540,948)
($ 205,629
$ 205,629
$ Amount		 Weighted-
average
outstanding
common
shares
(inthousands)
2,401,627
9,906
37,508
2,449,041
2,401,627

2,401,627
2,449,041

2,449,041
Income
before
income tax
16,447,706
$ -
-
16,447,706
$ 2,836,342)
($
205,629
$ 2,836,342)
($
205,629
$		 Income
before
income tax
6.85
$ 6.72
$ 1.19)
($
0.09
$ 1.16)
($
0.08
$

79

==> picture [596 x 105] intentionally omitted <==

  • (Note) Effective January 1, 2008, as employees’ bonus could be distributed in the form of stock, the diluted EPS computation shall include those estimated shares that would increase from employees’ stock bonus issuance in the calculation of the weighted-average number of common shares outstanding during the reporting year, taking into account the dilutive effect of stock bonus on potential common shares; whereas, basic EPS shall be calculated based on the weighted-average number of common shares outstanding during the reporting year including the shares of employees’ stock bonus for the appropriation of prior year earnings, which have already been resolved at the stockholders’ meeting held in the reporting year. Since capitalization of employees’ bonus no longer belongs to distribution of stock dividends, the calculation of basic EPS and diluted EPS for all periods presented shall not be adjusted retroactively.

==> picture [596 x 105] intentionally omitted <==

2012
2011		 Operating cost
Operating expense
Total
Operating cost
Operating expense
Total		 Personnel expenses Salaries
11,810,409
$ 8,257,081
$ 20,067,490
$ 11,113,526
$ 7,891,806
$ 19,005,332
$		 Employees’ bonus and directors’ and supervisors’ remuneration
305,700
2,505,716
2,811,416
327,971
1,769,215
2,097,186		 Labor and health insurance
1,193,497
640,751
1,834,248
1,021,453
544,953
1,566,406		 Pension
340,330
224,595
564,925
315,798
249,872
565,670		 Others
442,492
396,744
839,236
322,690
454,751
777,441		 14,092,428
$ 12,024,887
$ 26,117,315
$ 13,101,438
$ 10,910,597
$ 24,012,035
$		 Depreciation (Note)
5,565,955
$ 980,549
$ 6,546,504
$ 4,696,691
$ 754,189
$ 5,450,880
$		 Amortization
418,532
$ 1,063,925
$ 1,482,457
$ 245,136
$ 815,234
$ 1,060,370
$

81

==> picture [596 x 105] intentionally omitted <==

5. RELATED PARTY TRANSACTIONS

(1) Names and relationship of related parties

Names of relatedparties
Delta Electronics (Thailand) Public Co., Ltd.
(DET)
Amita Technologies, Inc. (Amita)
Digital Projection International Ltd. (DPI)
Crystalrich (HongKong) Co., Ltd.
(Crystalrich-HK)
Trillion Science, Inc. (Trillion)
Delta Products Corporation (DPC)
Delta Greentech (China) Co., Ltd. (DGC)
Digital Projection Ltd. (DP)
Crystalrich (Guangzhou) Co., Ltd.
DET International Holding Ltd.
(DET Holding)
Delta Energy Systems (Switzerland) AG.
(DES Switzerland)
Delta Green Industrial (Thailand) Co., Ltd.
Delta Energy Systems (Singapore) Pte. Ltd.
(DES SG)
Delta Energy Systems (Australia) Pty. Ltd.
Delta Electronics Europe Ltd. (DEU)
Delta Energy Systems (Germany) Gmbh
(DES Germany)
Delta Energy Systems (India) PVT Ltd.
(DES India)
DET Logistics (USA) Corporation
Delta Electronics (Slovakia) s.r.o. (DESK)
DET Video Technology Limited
Delta Energy System (Arizona), Inc.
DET SGP Pte. Ltd.
Delta India Electronics PVT Ltd. (Delta India)
Delta Power Solutions India PVT Ltd.
(DPS India)		 Relationshipwith the Company
Investee company accounted for under the equity
method
〞
〞
〞
〞
Related party in substance
Related party in substance (before October 3, 2011)
A subsidiary held by DIH, Ace and Drake-HK
(after Octorber 3, 2011)
A subsidiary of DPI
A subsidiary of Crystalrich-HK
A subsidiary of DET
〞
〞
〞
A subsidiary of DES SG
A subsidiary of DET Holding
〞
〞
〞
〞
〞
〞
〞
〞
〞

==> picture [596 x 105] intentionally omitted <==

Names of related parties

Relationship with the Company

Delta Greentech (USA) Corporation (DGA) A subsidiary of DET Holding Delta Greentech Electronics Industry LLC 〞 Delta Greentech (Brasil) S.A. (DGB) 〞 Delta Energy Systems (Finland) Oy A subsidiary of DES Switzerland Delta Energy Systems (Italy) s.r.l (DES Italy) 〞 Delta Energy Systems (Spain) SL. 〞 Delta Energy Systems (Czech Republic) spol 〞 Delta Energy Systems (France) SA. 〞 Delta Energy Systems (Poland) Sp. Zo. o. 〞 Delta Energy Systems LLC (Russia) 〞 Delta Energy Systems (Sweden) AB. 〞 Delta Green (Tianjin) Industries Co., Ltd. Indirectly held investee company accounted for (DGT) under equity method by DET (before August 1, 2011)

A subsidiary of DHK (after August 1, 2011)

(2) Significant transactions and balances with related parties A. Sales

For the years ended December 31,

DGA
DPC
DES Switzerland
DP
Delta India
DES Italy
DGB
DET
DESK
DPS India
DES Germany
DGC
DGT
Others
Less: Sales of discontinued operations
 2012
1,080,040
$ 809,087
635,796
529,732
469,244
390,150
403,419
234,417
232,555
112,590
95,212
-
-
34,000
5,026,242
454,298)
(

4,571,944
$		 2011
87,167
$ 659,672
338,086
590,704
427,870
273,848
341,613
170,727
13,920
145,812
237,295
5,886,177
164,422
76,826
9,414,139
283,145)
(
9,130,994
$

The sales terms, including prices and collections, were negotiated based on cost, market, competitors and other factors.

83

==> picture [596 x 105] intentionally omitted <==

B. Purchases

For the years ended December 31,

DET
DGT
Others
Less: Purchases of discontinued operations		 2012
513,737
$ -
109,404
623,141
-

623,141
$		 2011
446,298
$ 478,722
51,620
976,640
22,446)
(
954,194
$

The purchase terms, including prices and payments, were negotiated based on cost, market, competitors and other factors.

C. Accounts receivable

competitors and other factors.
Accounts receivable
Accounts payable
DGA
DPC
DES Switzerland
DP
DGB
DES Italy
Delta India
Others
Classified to non-current assets held for sale

DET
Others		 December 31,
2012
2011
309,803
$ 10,134
$ 276,868
133,044
150,802
108,756
133,523
107,396
118,074
107,096
111,225
91,572
84,422
129,738
160,827
128,720
1,345,544
816,456
113,667)
(
-
1,231,877
$ 816,456
$ December 31,		 2011
10,134
$ 133,044
108,756
107,396
107,096
91,572
129,738
128,720
816,456
-
816,456
$
2012
2011
135,803
$ 85,285
$ 46,664
33,089
182,467
$ 118,374
$		 2011
118,374
$

D. Accounts payable

E. Property transactions

In December 2011, DHK purchased 50% stock ownership of DGT from DET SGP Pte. Ltd. amounting to $467,803. As of December 31, 2012, such amount had been fully paid. The Company has eliminated the disposal gain of $81,322 from this sidestream intercompany transaction in proportion to the product of its equivalent stock ownership in one investee company multiplied by its equivalent stock ownership in the other investee company.

==> picture [596 x 105] intentionally omitted <==

F. Remuneration information of key management (including directors, supervisors, general manager and vice general managers)

Salaries (Note A)
Bonuses (Note B)
Service fees (Note C)
Distribution of earnings (Note D)		 2012
54,792
$ 67,432
1,645
229,960
353,829
$		 2011
52,789
$ 11,415
2,832
207,137
274,173
$

Note A: Including wages, allowance, retirement pension and compensation. Note B: Including all kinds of incentives.

  • Note C: Including traveling allowance, payment for special disbursement, cars and dorms provided by the Group.

Note D: Including directors’ and supervisors’ remuneration and employees’ bonus.

Note E: For related information, please refer to Annual Report.

6. DETAILS OF PLEDGED ASSETS

As of December 31, 2012 and 2011, the details of pledged assets are as follows:

Assets pledged
Buildings
Machinery and equipment
Testing equipment
Construction in progress and
prepayments for equipment
Deferred expenses
Demand deposits and time deposits
(shown as other financial assets -
current and non-current)
Cash, demand deposits and time
deposits (shown as other financial
assets - current)
Time deposit (shown as other
assets - current)		 2012
2011
1,414,526
$ 1,716,158
$ 342,728
$ 21,496
$ 3,645
$ -
$ 1,432,342
$ 1,137,339
$ 4,193
$ 6,553
$ 3,862
$ 100,446
$ 225
20,000
39,849
24,163
43,936
$ 144,609
$ December31,		 Purpose of pledge
2012
1,414,526
$ 342,728
$ 3,645
$ 1,432,342
$ 4,193
$ 3,862
$ 225
39,849
43,936
$
Long-term loans
〞
〞
〞
〞
Collateral for
customs duties
Collateral for
disposition and
seizure
Performance bonds

7. COMMITMENTS AND CONTINGENT LIABILITIES

The Group’s significant commitments as of December 31, 2012 were as follows:

(1) Future lease payments purchase commitment

  • A. As of December 31, 2012, the future lease payments and the net present value discounted at

  • 1.37%, one-year time deposit interest rate given by the Chunghwa Post Co., Ltd. are as follows:

85

==> picture [596 x 105] intentionally omitted <==

Year
2013
2014
2015
2016
2017
2018~2022 (the net present value is $20,337)
2023 (the net present value is $3,904)		 Amount
144,973
$ 50,509
36,914
22,211
11,178
22,672
4,534
292,991
$

  • B. The Company entered into contracts for software procurement and the total future payments for the acquisition of software amounted to approximately $217,594.

  • C. The Group entered into contracts for the construction of new factories and buildings, and the total future payments for the acquisition of equipment amounted to approximately $1,910,736.

  • (2) Research engagement contract and technical cooperation agreement

  • A. In October 2007, the Company entered into an agreement with the Institute of Nuclear Energy Research, Atomic Energy Council, Executive Yuan, R.O.C. for technology authorization of Concentrating Photovoltaic Modules. The contract is valid through October 2017. In addition to the authorization fee of $5,000, the Company commits to pay royalties based on a certain percentage of total sales from the day the authorized products are sold and the maximum amount of the royalty is $100,000. As of December 31, 2012, the Company has paid the authorization fee totaling $5,000 and royalty fee totaling $621 to the Institute of Nuclear Energy Research. Further, in January, 2010, the Company entered into an agreement with the Institute of Nuclear Energy Research for the temporary termination of the above agreement for two years whereby the Company cannot use the technology authorization during such period.

  • B. The Company signed a contract with the Industrial Technology Research Institute for the research engagement of LED Projective Array Auto Stereoscopic Display. The contract will expire in November, 2015. As of December 31, 2012, the Company was committed to future research commission payments under the contract totaling $23,625.

  • C. The Company entered into an agreement with the Industrial Technology Research Institute for preliminary technology authorization of open cloud computing system. As of December 31, 2012, the Company was committed to future authorization fee under the agreement totaling $6,300.

  • D. The Company signed an agreement with the National Central University to build a Union R&D Center jointly. The agreement started in 2011 and will expire in 2020. Under the agreement, both parties agreed to provide $10,000 each per year for the first three years of the agreement for the establishment of the Union R&D Center. The fund will be managed in a separate account for this special use only. If the cooperative performance is assessed to be satisfactory after the completion of the three-year execution, the two parties will continue the next three-year plan,

==> picture [596 x 105] intentionally omitted <==

and confer on issues including their investment proportions. As of December 31, 2012, the future payments required of the Company under the above agreement was $10,000.

  • E. The Company signed an industrial and academic cooperation agreement with the National Taiwan University, National Tsing Hua University and National Chiao Tung University. The agreement started on June 20, 2011 and will expire on June 20, 2014. Under the agreement, the Company agreed to contribute $32,000 maximum per year to the fund of “Cloud Computing and Business Application Program”. As of December 31, 2012, the future payments required of the Company under the above agreement was $62,459.

  • F. DelSolar signed a solar cell joint development agreement with IBM on September 25, 2010. The agreement started on September 25, 2010 and will expire on September 24, 2013. This technical cooperation aims at commercial mass production of chemical-compound thin-film solar cells and gaining technical patent jointly. DelSolar should bear certain amount of development expenses in a period as specified by the agreement. As of December 31, 2012, it had paid US$6.5 million in advance. DelSolar had terminated this agreement on February 1, 2013 due to the adjustment of operation plan.

  • (3) DelSolar’s long-term purchase contracts

  • A. DelSolar signed long-term purchase contracts with 6 materials suppliers with contract periods from December 2006 to December 2018. According to the contracts, DelSolar agreed to pay those suppliers certain amounts in installments, and the suppliers shall provide DelSolar with materials as DelSolar makes prepayments for purchases. Such prepayments may be offset against the relevant purchase amounts or be returned. As a result of the imbalance between supply and demand in the solar energy industry, the solar cell trade is making silicon wafer unit price modification arrangements with silicon wafer suppliers. As of December 31, 2012, DelSolar had signed memorandums of understanding (MOU) with 4 suppliers, specifying unit price modification mechanisms, and had recognized accrued liabilities for loss on long-term purchase contructs totaling $344,225 for the above events based on the accounting conservatism principle.

  • B. A reconciliation arrangement was contracted by DelSolar and its material supplier – Swiss Wafers AG, one of the 6 materials suppliers stated in the first paragraph, due to Swiss Wafers AG’s default on its delivery commitment under the silicon wafer supply contract. After negotiations, Swiss Wafers AG still could not fulfill the commitment. On March 18, 2010, DelSolar filed a lawsuit against Swiss Wafers AG to protect its creditor’s rights, which is being tried under the Betreibungsamt Weinfelden Bahnhofstrasse 22 8570 Weinfelden Switzerland. On August 8, 2011, DelSolar had signed an MOU agreeing to deliver materials according to market price to offset prepayments. As the result of negotiations with Swiss Wafers AG was not as expected, DelSolar had requested commercial arbitration with the ICC Court of Arbitration on March 9, 2012. Under the contract, the maximum loss to DelSolar is the total balance of prepayments accrued as at December 31, 2012 amounting to US$3,240 thousand,

87

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which might be uncollectible from Swiss Wafers AG. As of the financial reporting date, the final judgment on this case is still pending.

  • C. DelSolar agreed on the monthly volume of materials purchases with certain suppliers stated in the first paragraph. Due to price impact of market supply and demand, DelSolar negotiated for the amount and quantity of purchase obligations as specified on the contract. Under the contract, the maximum loss to DelSolar is the total balance of prepayment accrued as at December 31, 2012 amounting to EUR 3,342 thousand, which might be uncollectible. As of the financial reporting date, the negotiation is in progress and the possible loss cannot be reasonably estimated.

  • D. The machinery and equipment which DelSolar purchased from a certain supplier was below the criteria for acceptance. After negotiation and correction several times, those machinery and equipment still cannot reach the criteria for acceptance. DelSolar had requested commercial arbitration with the Chinese Arbitration Association in July 2012. As of the financial reporting date, the final judgement on this case is still pending and the possible financial effect cannot be reasonably estimated.

8. MAJOR CATASTROPHE

None.

9. SUBSEQUENT EVENTS

  • (1) On Feburary 6, 2013, Delsolar’s extraordinary shareholders' meeting approved the merger with Neo Solar Power Corporation (NSP). Each common share of DelSolar will be converted into 0.735 share of NSP. DelSolar will be the dissolved company and NSP will be the surviving company after the consolidation.

  • (2) On January 17, 2013, DelBio established DelBio (Wujiang) Co., Ltd. (DelBio-WJ). DelBio funded the establishment of DelBio-WJ with USD 900 thousand on February 19, 2013.

  • (3) On February 25, 2013, the board of directors of DelBio resolved to conduct capital increase in cash. The amount of capital increase will depend on the progress of the establishment of DelBio-WJ up to a maximum amount of USD 4,050 thousand.

  • (4) On February 6, 2013, the board of directors of Delta Capital resolved to conduct capital increase in cash of 25,000,000 shares with $10 per share. The funds for the capital increase had been collected on February 21, 2013 but the registration had not been completed as of the report date.

  • (5) On February 6, 2013, Delta Capital entered into an agreement with Green Seal Holding Limited for the purchase of convertible bonds through private placement amounting to USD 3 million before March 1, 2013. Delta Capital had remitted the payment on February 27, 2013.

  • (6) On January 8, 2013, DPEC signed a contract with Nanjing Tunjing Cultural Development and Communication Ltd. for the purchase of commercial office building in Nanjing at approximately RMB 73,498,000. On January 8, 2013, DPEC had paid the acquisition price of RMB 15,000,000 under the contract.

==> picture [596 x 105] intentionally omitted <==

  • (7) DIH signed a share purchase agreement with Luxeon International Holding Limited (Luxeon) for the purchase of 100% ownership of Vivitek Corporation from Luxeon for USD 1,500 thousand. DIH had remitted the payment on January 3, 2013.

10. OTHERS

  • (1) Financial statement presentation

  • Certain accounts in the 2011 consolidated financial statements were reclassified to conform with the

2012 consolidated financial statement presentation.

89

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December 31, 2011 Fair value Estimated Quotations
using a		 in an active
valuation		 market
technique		 -
$ 106,969,167
$		 1,181
1,820,525		 649,872
-		 -
-		 -
$ 64,776,720
$		 -
25,720,079		 -
$ 116,272
$		 -
$ 51,130
$
Book value 106,969,167 1,821,706 649,872 4,243,408 64,776,720 25,720,079 116,272 51,130
$ $ $ $
December 31, 2012 Fair value Estimated Quotations
using a		 in an active
valuation		 market
technique		 -
$ 91,842,705
$		 7,538
967,513		 2,953,289
-		 -
-		 -
$ 51,383,642
$		 -
19,898,380		 -
$ 45,648
$		 -
$ 43,331
$
Book value 91,842,705 975,051 2,953,289 1,665,433 51,383,642 19,898,380 45,648 43,331
$ $ $ $
Non-derivative financial instruments Assets: Financial assets with fair values equal to book values Financial assets at fair value through profit or loss Available-for-sale financial assets Financial assets carried at cost Liabilities: Financial liabilities with fair values equal to book values Long-term loans (including current portion) Derivative financial instruments Assets: Forward exchange contracts Liabilities: Forward exchange contracts

==> picture [596 x 105] intentionally omitted <==

The methods and assumptions used to estimate the fair values (including non-current disposal group classified as held for sale) of the above financial instruments are summarized below:

  • A. Financial assets and liabilities with fair values equal to book values

    • a. For short-term instruments, the fair values were determined based on their carrying values because of the short maturities of the instruments. This method was applied to cash and cash equivalents, notes and accounts receivable (including related parties), other receivables (excluding income tax refundable), other financial assets - current, short-term loans, accounts payable (including related parties), accrued expenses, other payables and other current liabilities.

    • b. The fair value of cash surrender value of life insurance is based on the book value at the balance sheet date.

    • c. The fair values of other financial assets - non-current, refundable deposits and guarantee deposits received are based on book values, which approximate present value.

    • d. The fair value of long-term loans is based on book value, which approximates present value.

  • B. The fair value of listed stocks which were recognized as financial assets at fair value through profit or loss is based on the closing price in open market at the balance sheet date. The fair value of private placement of convertible bonds, which were invested before the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds” is measured at cost; while the fair value of those invested after October 8, 2010 is measured based on Binomial Stock Options Pricing Model.

  • C. The fair values of available-for-sale financial assets are based on the quotations in the active market, which are the latest quoted closing prices at the balance sheet date.

  • D. The fair values of derivative financial instruments which include unrealized gains or losses on unsettled contracts were determined based on the amounts to be received or paid assuming that the contracts were settled as of the reporting date.

  • (3) Information on available-for-sale financial assets

  • The Group recognized the adjustment in equity from available-for-sale financial assets amounting to $158,449 and ($656,934), and the amount removed from equity and recognized in profit or loss was ($247,788) and $107,718 for the years ended December 31, 2012 and 2011, respectively.

  • (4) Information on interest rate risk positions

  • As of December 31, 2012 and 2011, the Group’s (including non-current disposal group classified as held for sale) financial assets with fair value risk due to the change of interest amounted to $9,360,232 and $26,532,443, respectively; the financial liabilities with fair value risk due to the change of interest rate amounted to $116,159 and $5,609,862, respectively; the financial assets with cash flow risk due to the change of interest rate amounted to $16,869,199 and $10,675,664, respectively; and the financial liabilities with cash flow risk due to the change of interest amounted to $26,673,133 and $37,885,208, respectively.

91

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  • (5) Procedure of financial risk control and hedge

  • The main objective of financial risk control and hedge strategy is to reduce the loss of assets or liabilities (including forecast transactions) resulting from the exchange rate and interest rate fluctuations. The Group achieves financial hedge by entering into derivatives and all activities of hedge follow the principles listed below to achieve the objective of risk control:

  • A. Nature hedge

  • B. Does not erode the profit of main business

  • C. Does not enter into financial instruments besides the transaction currency

  • D. Should execute stop-loss point

  • E. Should execute the operating process

  • In monitoring control, besides the regular audit performed by the internal auditor, the Group’s Chief Financial Officer should monitor and manage derivative transactions. Except for evaluating the position twice a month, the authorized persons should monitor financial instrument transactions and the related profit or loss resulting from the transactions at any time. If any unusual event occurred, necessary actions should be taken and reported to the Board of Directors immediately. In addition, the performance of derivative transactions will be evaluated periodically to determine if these transactions are in compliance with the operating strategy and the risk of these transactions is within the tolerable range of the Group. The Group has established the procedures for derivative transactions.

(6) Information of major financial risk

  • A. Certain transactions of the Group involve non-functional currency which are exposed to exchange rate fluctuation. The information on foreign currency denominated monetary assets and liabilities which are significantly affected by exchange rate fluctuation is as follows:
xchange rate fluctuation. The information on foreign currency denominated monetary assets
abilities which are significantly affected by exchange rate fluctuation is as follows:		 denominated monetary assets
tuation is as follows:		 denominated monetary assets
tuation is as follows:
Foreign
Foreign
(Foreign Currency:
Currency Amount
Exchange
Currency Amount
Exchange
Functional Currency)
(In thousands)
Rate
(In thousands)
Rate
Financial assets
Monetary items
USD:NTD
273,469
29.0400
231,700
30.275
USD:RMB
177,354
6.2855
15,640
6.3009
RMB:USD
784,564
0.1591
1,159,556
0.159
December 31,2012
December 31,2011		 December 31,2011
Exchange
Rate
30.275
6.3009
0.159

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nvestments in equity financial instruments
Foreign
Currency Amount
(Inthousands)
Long-term equity
investments accounted
for under the equity
method
THB:USD
6,143,510
THB:NTD
4,737,280
Financial liabilities
Monetary items
USD:NTD
24,247
USD:RMB
454,222
RMB:USD
852,898
December 31,
Items
Financial assets at fair value through profit or
loss - listed and OTC stocks
Available-for-sale financial assets
Financial assets carried at cost		 December 31, December 31, Foreign
Exchange
Currency Amount
Exchange
Rate
(Inthousands)
Rate
0.0328
4,166,653
0.0319
0.9535
3,952,955
0.9647
29.0400
92,484
30.275
6.2855
509,934
6.3009
0.1591
763,939
0.159
2012
December 31,2011
December 31,		 Foreign
Exchange
Currency Amount
Exchange
Rate
(Inthousands)
Rate
0.0328
4,166,653
0.0319
0.9535
3,952,955
0.9647
29.0400
92,484
30.275
6.2855
509,934
6.3009
0.1591
763,939
0.159
2012
December 31,2011
December 31,
2012
7,538
$ 2,953,289
1,665,433		 2011
Financial assets at fair value through profit or
loss - listed and OTC stocks
Available-for-sale financial assets
Financial assets carried at cost		 1,181
$ 649,872
4,243,408

B. Investments in equity financial instruments

  • a. Market risk

The investments in equity financial instruments owned by the Group are exposed to price risk.

  • b. Credit risk

The Group assessed the credit condition of counterparties and default is not expected; therefore, the possibility of credit risk is low.

  • c. Liquidity risk

  • (a) The Group’s investments in equity financial instruments which have active markets are expected to be sold easily and quickly in the market at the price close to their fair value.

  • (b) The Group’s investments in equity financial instruments without active markets are expected to have liquidity risk.

  • d. Cash flow risk due to changes in interest rate

The Group’s investments in equity financial instruments are non-interest rate instruments; therefore, there is no cash flow risk related to changes in interest rate.

93

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C. Other financial instrument investments

Items
Financial assets at fair value through profit or
loss - private placement of convertible bonds		 December31, December31,
2012
967,513
$		 2011
1,820,525
$

a. Market risk

The private placement of convertible bonds that the Group invested in have no quoted price in active market; hence, they are not affected by the changes in market price. Therefore, no significant market risk would arise.

  • b. Credit risk

The Company expects that the counterparty of the private placement of convertible bonds that it invested in is not likely to default; therefore, the credit risk is extremely low.

  • c. Liquidity risk

The Group’s working capital is sufficient to support the capital demand of the Group; therefore, the Group expects no significant liquidity risk.

  • d. Cash flow risk due to changes in interest rate

Interest on the private placement of convertible bonds that the Group invested in accrues at fixed interest rate; therefore, there is no cash flow risk arising from interest rate fluctuations.

D. Receivables

fluctuations.
Receivables
Items (Note)
Notes receivable, net
Accounts receivable
(including related parties), net
Other receivables		 December 31,
2012
1,320,748
$ 36,441,916
717,525		 2011
1,330,220
$ 35,525,143
2,082,657

Note: Including non-current disposal group classified as held for sale.

  • a. Market risk

The Group’s receivables are all due within one year, therefore, the Group expects no significant market risk.

  • b. Credit risk

The Group’s receivables are all approved through rigorous credit review procedures and some of which have to take out an insurance policy or provide necessary collaterals; therefore, the Group expects no significant credit risk.

==> picture [596 x 105] intentionally omitted <==

c. Liquidity risk

  • The Group’s receivables are all due within one year and their working capital is sufficient to support its capital requirements; therefore, the Group expects no significant liquidity risk.

  • d. Cash flow risk due to changes in interest rate

The Group’s receivables are all due within one year; therefore, there is no significant cash flow risk due to changes in interest rate.

  • E. Loans
flow risk due to changes in interest rate.
Loans
Items(Note)
Short-term loans
Long-term loans (including current portion)		 December31,
2012
6,890,912
$ 19,898,380		 2011
17,599,492
$ 25,720,079

Note: Including non-current disposal group classified as held for sale.

  • a. Market risk

The loans of the Group have no significant market risk.

  • b. Credit risk

None.

  • c. Liquidity risk

The expected future cash flow is sufficient to support the capital requirements of the Group; therefore, the Group expects no significant liquidity risk.

  • d. Cash flow risk due to changes in interest rate

The loans of the Group are issued at floating interest rate, accordingly, the future cash flow of which will fluctuate with the yield rate of these debt instruments. However, due to the short duration of the short-term loans, there is no significant cash flow risk due to changes in interest rate.

(7) Information on derivative transactions

The balance of the Group’s derivative transactions as of December 31, 2012 and 2011 are shown in Notes 4(2), (15) and 10(9). The related risk information is as follows:

  • A. Market risk

The Group entered into certain derivative contracts in order to hedge risk. Accordingly, no material market risk is expected.

B. Credit risk

The banks, which the Group deals with, all have good credit standing and the Group deals with several banks to disperse the credit risk; therefore, the possibility that the banks will not comply with the terms of the contracts is low.

C. Liquidity risk

The Group has sufficient working capital; therefore no material liquidity risk is expected.

95

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D. Cash flow risk due to changes in interest rate

The Group did not enter into any derivative contract that is interest rate related; therefore, no material cash flow risk due to changes in interest rate is expected.

(8) Off-balance sheet financial instruments with credit risk

None.

(9) Fair value hedge and cash flow hedge

  • A. Fair value hedge

The foreign currency demand for the subsidiaries is exposed to the risk resulting from fair value changes due to foreign exchange rate changes. The subsidiaries entered into foreign currency forward contracts which meet all criteria for hedge accounting. The related information is as follows:

Designated for hedging instrument

Hedge item
Receivables in foreign
currencies
Payables in foreign
currencies		 Financial instrument
was designated as
hedginginstrument
Forward exchange
contracts
Forward exchange
contracts		 Fair value as of
December 31,2012
$ -

$ 2,295)		 Fair value as of
December 31,2011
($ 4,088)
( $ 2,620

B. Cash flow hedge

In order to prevent the risk resulting from future cash flow fluctuation due to foreign exchange rate fluctuations, the Group entered into foreign currency forward contracts which meet all criteria for hedge accounting. The related information is as follows:

Designated for hedging instrument

Financial instrument
was designated as
Fair value as of
Hedge item
hedginginstrument
December 31, 2012
Receivables
in foreign
currencies
Forward exchange
contracts
$ 13,695
Payables
in foreign
currencies
Forward exchange
contracts
11,456
Designated for hedginginstrum		 Designated for hedginginstrum Period of
anticipated
cash flow
2013.01.04~
2013.06.04
2013.01.04~
2013.11.06
ent		 Period of gain
(loss) anticipated
to be recognized
in income
statement
2013.01.04~
2013.06.04
2013.01.04~
2013.11.06

==> picture [596 x 105] intentionally omitted <==

Designated for hedging instrument

Financial instrument
was designated as
Hedge item
hedginginstrument
Receivables
in foreign
currencies
Forward exchange
contracts
Payables
in foreign
currencies
Forward exchange
contracts
Designat		 Designat ed for hedginginstrum Period of
anticipated
cash flow
2012.01.05~
2012.12.06
2012.01.05~
2012.12.06
ent		 Period of gain
(loss) anticipated
to be recognized
in income
statement
2012.01.05~
2012.12.06
2012.01.05~
2012.12.06
Fair value as of
December 31,2011
$ 46,524
23,182

(10) Business mergers and acquisitions

  • A. The Group conducted the following business mergers and acquisitions and stock ownership adjustments in 2011:

  • a. The Company conducted simple merger with PreOptix originally owned by the Company with 94.89% ownership, on March 1, 2011, and paid $17,875 to the minority stockholders of PreOptix for the merger. PreOptix is the dissolved company.

  • b. The Company’s subsidiary - DHK acquired 100% stock ownership in DGT by cash totaling $938,774 (US$30,904,000) on August 1, 2011 and December 1, 2011.

  • c. The Company’s sibsidiary - DIH acquired 100% stock ownership in Ace by cash in the amount of $416,219 (US$13,655,000) on September 1, 2011 and 100% stock ownership in Drake by cash in the amount of $5,210,822 (US$172,116,000) on October 3, 2011. After this transaction, the Company’s indirectly owned stock ownership in DGC through Ace and Drake were 3.811% and 48.51%, respectively. Including the original 10.38% stock ownership held by the Company, the Company’s consolidated stock ownership in DGC was 62.701%.

  • B. The business activities of each subsidiary were as follows:

  • a. PreOptix: manufacturing and sales of lenses and optical engines for projectors.

  • b. DGT: please refer to Note 11(3)A.

  • c. DGC: please refer to Note 11(3)A.

  • C. In accordance with paragraph 26 of R.O.C. SFAS No. 25, “Accounting for Business Combination - Purchase Method”, publicly traded companies are required to provide supplemental information on the performance of its operations on a pro forma basis. The assumptions made by each direct subsidiary or indirect subsidiary for their pro forma consolidated statements of income for the year ended December 31, 2011 are as follows:

  • a. PreOptix was originally the consolidated entity of the Company. The pro forma information is prepared under the assumption that PreOptix had been dissolved on January 1, 2011. The income (loss) of PreOptix had been included in the consolidated statement of income.

97

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  • b. Effective August 1, 2011, the operating results of DGT was included in the consolidated statements of income of DHK, and pro forma supplementary information was prepared under the assumption that DHK and the Company had acquired 100% and 94% stock ownership in DGT, respectively since January 1, 2011.

  • c. Effective October 3, 2011, the operating results of DGC was included in the consolidated statements of income of DIH, and pro forma supplementary information was prepared under the assumption that DIH and the Company had acquired 62.701% and 94.00% stock ownership in DGC, respectively since January 1, 2011. Pro forma supplementary information is as follows:

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Delta Electronics, Inc. and Subsidiaries Pro Forma Consolidated Statements of Income For the Year Ended December 31, 2011

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

Operating revenues
Net sales
Service income
Net operating revenues
Operating costs
Cost of goods sold
Service costs
Net operating costs
Gross profit
Operating expenses
Operating income
Non-operating income and gains
Non-operating expenses and losses
Income from continuing operations before income tax
Income tax expense
Net income from continuing operations
Loss from discontinued operations
Consolidated net income
Attributable to:
Equity holders of the Company
Minority interest
Earnings Per Share (In Dollars)
BeforeTax
After Tax
Basic earnings per share
Net income from continuing operations
7.45
$ 6.12
$ Loss from discontinued operations
1.19)
(
1.06)
(
Minority interest income
0.49)
(
0.49)
(
Net income
5.77
$ 4.57
$ Diluted earnings per share
Net income from continuing operations
7.31
$ 5.99
$ Loss from discontinued operations
1.16)
(
1.03)
(
Minority interest income
0.48)
(
0.48)
(
Net income
5.67
$ 4.48
$ 2011
17,904,022
$ 164,585,421
2,503,689
167,089,110
(
129,014,340)
(
1,342,257)
(
130,356,597)
36,732,513
(
23,057,368)
13,675,145
4,960,073
(
731,196)
(
3,207,665)
$ 12,155,409
$ 10,973,267
1,182,142
$ 12,155,409
(
2,540,948)
14,696,357		 2011
$ 164,585,421
2,503,689		 2011
$ 164,585,421
2,503,689
$
167,089,110
17,904,022
129,014,340)
1,342,257)
130,356,597)
36,732,513
23,057,368)
13,675,145
4,960,073
731,196)
3,207,665)
12,155,409
2,540,948)
14,696,357
(
(
(
(
(
$
$ 10,973,267
1,182,142
$ 12,155,409

99

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(11) Extraordinary gain

The subsidiary - DIH originally held 10.38% ownership of DGC (shown as “Financial assets carried at cost”). Effective October 3, 2011, DGC was included in the Company’s consolidated financial statements. The treatment for the equity investment in DGC was changed to the equity method assuming that the change was at the beginning of 2011 and not adopting retroactive adjustment. The difference between investment cost and underlying equity in net assets is analyzed and dealt with by following the allocation procedures of the acquisition cost specified in R.O.C. SFAS No. 25, “Business Combinations – Purchase Method”. As the fair value of identifiable net assets exceeded the investment cost, the excess was recognized as a reduction to the carrying amounts of non-current assets of DGC in proportion to their fair values. The remaining excess of $205,629 after the carrying amounts of identifiable net assets was reduced to $0 was recognized as extraordinary gain. Cash dividends received from DGC in 2011 was accounted for as investment income under the previous method; accordingly, investment income amounting to $153,267 was offset against the long-term equity investment account.

==> picture [596 x 105] intentionally omitted <==

Delta Robot 230,972 216 217) - - - - - -
$
(
AMT 2,681,476 - - - - - 53,200 9 -
$
DSGL 9,436 25 - - - - 73) - -
$
(
DEIL-SG 3,742,537
$		 1,485,354) 92,820) 20,536,679 13,428,402 5,692,682) - - -
( ( (
Delta Capital 1,185,916
$		 - - - - - - - -
DelBio 119,195 8,689 12,612) - 10,793 17) 5,470) - 340)
For the year ended December 31, 2012 DelSolar
NEM
Cyntec		 2,378,066
104,193
$ 18,498,549
$ $		 396,987)
170
89,644)
(		 403,630)
-
31,513)
(
(		 51,972
-
177		 1,341,429)
566)
(
206,142)
(		 7,493)
1,266)
(
29)
(
(		 62,854)
-
37,888
(		 822,605
17,340
-		 -
-
-
(
$
( ( ( ( (
DEN 103,373 49,453 35,024) - 226,344 225,023 - - -
$
(
PreOptix 175,579 42,306) - - - - - - -
$
(
DNH 6,317,411 262,615 2,404) 19,366 969,419 37,142) 46,794) - 4,400)
$ ( ( ( (
DIH 51,253,353 2,869,531) 498,838) 92,013 13,086,821) 1,936,845) 27,472 307,441) -
$ ( ( ( ( (
The Company 86,800,056)
($		 4,562,654 1,077,238 20,700,207)
(		 . - 7,450,451 3,369)
(		 592,513)
(		 4,740
Transactions (1)Elimination of long-term investments (2)Elimination of intercompany receivable (AR) and payable (AP) accounts (3)Elimination of profit and accounts A.Sale and purchase transactions a. Downstream transactions b. Upstream transactions c. Sidestream transactions B. Services revenue, selling expenses, management and administrative expenses C.Rental revenue and rental expense (4)Elimination of minority income (5)Elimination of other transactions Refundable deposits and guarantee deposits received

101

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Transactions
The Company
DIH
DNH
PreOptix
DEN
DelSolar
NEM
Cyntec
DelBio
Delta Capital
DEIL-SG
For the year ended December 31, 2011		 (1)Elimination of
86,730,487)
($ 55,048,426
$ 6,537,276
$ 181,496
$ 85,386
$ 4,388,399
$ 95,692
$ 16,333,394
$ 25,741
$ 1,171,924
$ 2,862,753
$ long-term investments
(2)Elimination of
4,908,545
148,366
252,648
-
23,122
48,954
242
53,974)
(
949
517
5,329,369)
(
intercompany
receivable (AR) and
payable (AP) accounts
(3)Elimination of profit
and loss accounts
A.Sale and purchase
transactions
a. Downstream
802,843)
(
333,856
1,985
-
45,506
296,831
-
72,611
546
-
51,508
transactions
b. Upstream
19,782,124
3,906,401)
(
30,071)
(
-
-
5,027)
(
-
4,086)
(
-
-
15,835,939)
(
transactions
c. Sidestream
-
13,472,433)
(
940,980
32,141
198,198
116,380
1,710)
(
278,204)
(
381
-
12,464,267
transactions
B. Services revenue,
6,229,527
2,734,453)
(
24,710)
(
64,047)
(
173,719
6,460)
(
426)
(
504)
(
99
25,000
3,597,745)
(
selling expenses,
management and
administrative
expenses
C.Rental revenue and
41,695
24,464
40,301)
(
-
-
68,832)
(
-
45,294
2,217)
(
103)
(
-
rental expense
(4)Elimination of
748,424)
(
314,873)
(
-
2,346
-
1,040,728
20,223
-
-
-
-
minority interest
income
(5)Elimination of other
4,740
-
4,400)
(
-
-
-
-
-
340)
(
-
-
transactions
Refundable deposits
and guarantee deposits
received

==> picture [596 x 105] intentionally omitted <==

11.DISCLOSURE INFORMATION OF THE COMPANY AND ITS SUBSIDIARIES
(1)Related information of significant transactions
All the transactions with subsidiaries disclosed below had been eliminated when preparing consolidated financial statements. The disclosure information as follows is for reference only.
A. Financing activities to any company or person: None.
B. Guarantee information: None.
C. Marketable securities held by the Company at December 31, 2012: (Combined amounts less than $100,000 as of December 31, 2012)		 Note - - - - - - - - - - - (Note)

December 31, 2012		 Market value 51,107,396
$		 6,318,545 164,733 11,572,101 1,185,916 3,916,736 119,195 2,667,683 230,972 97,113 103,373 2,109,238
Percentage
ownership		 94.00 100.00 39.62 100.00 100.00 100.00 100.00 99.97 100.00 83.11 100.00 5.54
Book value 51,253,353
$		 6,317,411 175,579 18,498,549 1,185,916 3,742,537 119,195 2,681,476 230,972 104,193 103,373 4,516,997
Number of shares 67,680,000 39,800,000 5,250,000 476,948,581 125,000,000 300,000 39,000,000 271,017,597 25,000,000 33,243,768 765,000 69,128,140
General ledger accounts Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method		 Long-term investments accounted for under
the equity method

Relationship of
the issuers with
the Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 A subsidiary of the
Company		 Investee company
accounted for under
the equity method

Name and kind of
marketable securities		 Delta International Holding Ltd.
common stock		 Delta Networks Holding Ltd.
common stock		 PreOptix (Hong Kong) Co., Ltd.
common stock		 Cyntec Co., Ltd. common stock Delta Electronics Capital
Company common stock		 Delta Electronics Int'l
(Singapore) Pte. Ltd. common
stock		 DelBio Inc. common stock Allied Material Technology Corp.
common stock		 Delta Robot Automatic Co., Ltd.
common stock		 NeoEnergy Microelectronics, Inc.
common stock		 Deltronics (Netherlands) B.V.
common stock		 Delta Electronics (Thailand)
Public Co., Ltd. common stock

Name of investor		 Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc.

103

Note - - - - - - - -
December 31, 2012 Market value 78,031
$		 1,470,982 1,975,178 179,757 434,026 103,064 720,000 591,742
Percentage
ownership		 33.42 42.40 11.37 1.09 4.95 Preferred Shares -
Book value 249,446
$		 2,378,066 1,975,178 179,757 434,026 103,064 720,000 591,742
Number of shares 14,212,000 114,473,278 17,250,459 1,771,000 22,783,527 2,100,000 -
General ledger accounts Long-term investments accounted for under
the equity method		 Long-term investments held for disposal Available-for-sale financial assets Available-for-sale financial assets Available-for-sale financial assets Financial assets carried at cost - non-current Financial assets at fair value through profit or
loss - current
Relationship of
the issuers with
the Company		 Investee company
accounted for under
the equity method		 A subsidiary of the
Company		 None None None None None
Name and kind of
marketable securities		 Amita Technologies, Inc.
common stock		 DelSolar Co., Ltd. common stock Dynapack International
Technology Corporation common
stock		 Tong Hsing Electronic Industries,
Ltd. common stock		 Neo Solar Power Corp. common
stock		 Delta America Ltd. preferred
shares		 Bright Led Electronics Corp.
convertible bonds		 Others
Name of investor Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc.

==> picture [596 x 105] intentionally omitted <==

December 31, 2012 Amount 119,195
$		 9,436 230,972 2,378,066
Number of
shares		 39,000,000 1,000,000 25,000,000 114,473,278
Disposal Disposal loss -
$		 (Note c) - 314,557)
(
(Note f)
Book value -
$		 190,000
(Note c)		 - 716,774
(Note f)
Selling price -
$		 (Note c) - 402,217
(Note f)
Number of
shares		 - 19,000,000
(Note c)		 - 33,183,000
(Note f)
Addition Amount 93,454
$ (Note a)		 199,436
(Note b)		 230,972
(Note d)		 1,293,559)
(
(Note e)
Number of
shares		 25,000,000 20,000,000 25,000,000 -
January 1, 2012 Amount 25,741
$		 - - 4,388,399
Number of
shares		 14,000,000 - - 147,656,278
Relationship Subsidiary Subsidiary Subsidiary None
Name of
transaction
parties		 DelBio Inc. Delta Smart
Green Life
Co., Ltd.		 Delta Robot
Automatic
Co., Ltd.		 Neo Solar
Power
Corp., etc.
General
ledger
accounts		 Long-term
investments
accounted
for under the
equity
method		 Long-term
investments
accounted
for under the
equity
method		 Long-term
investments
accounted
for under the
equity
method		 Long-term
investments
accounted
for under the
equity
method /
Long-term
equity
investments
held for
disposal
Name of
marketable
security		 DelBio Inc.
common
stock		 Delta Smart
Green Life
Co., Ltd.
common
stock		 Delta Robot
Automatic
Co., Ltd.
common
stock		 DelSolar Co.,
Ltd. common
stock
Acquirer/
seller		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.

105

Name of
General
December 31, 2012
January 1, 2012
Name of
Addition
Disposal		 Number of
Number of
Number of
Number of
Acquirer/
marketable
ledger
transaction		 shares
Amount
shares
Amount
shares
Selling price
Book value
Disposal loss
shares
Amount
seller
security
accounts
parties
Relationship		 22,783,527
434,026
$ -
-
$ -
$ -
$ 22,783,527
434,026
$ Neo Solar
None
Delta
Neo Solar
Available-
-
-
$		 (Note g)
Power Corp.
Electronics,
Inc.
Power Corp.
common
for-sale
financial		 stock
assets		 -
312,585
11,540,547
253,010
548,589
295,579)
(
-
-
None
11,540,547
235,004
Delta
Stock
D-link Co.,
Available-		 (Note h)
Electronics,
Inc.
exchange
market
Ltd. common
stock
for-sale
financial		 assets -
54,361
1,404,000
139,433
107,014
32,419
1,771,000
179,757
Delta
Tong Hsing
Available-
Stock
None
3,175,000
232,410		 (Note h)
Electronics,
Inc.
Electronic
Industries,
for-sale
financial
exchange
market		 Ltd. common
assets		 stock 18,143,459
2,097,465
893,000
107,924
122,287
14,363)
(
17,250,459
1,975,178
Delta
Dynapack
Available-
Stock
None
-
-		 (Note i)
Electronics,
Inc.
International
Technology
for-sale
financial
exchange
market		 Corporation
assets		 common stock Note a: The Company invested $250,000 in DelBio Inc. and recognized investment loss under the equity method. Note b: The Company invested $200,000 in Delta Smart Green Life Co., Ltd. and recognized investment loss under the equity method. Note c: Delta Smart Green Life returned $190,000 through capital reduction in 2012. Note d: The Company invested $250,000 in Delta Robot Automatic Co., Ltd. and recognized investment loss under the equity method. Note e: The Company recognized investment loss accounted for under the equity method and adjustment due to change in subsidiary’s net assets from DelSolar Co., Ltd. (DelSolar) in 2012. Note f: The Company sold 774,000 shares of DelSolar for $11,344 in the second quarter of 2012. The Company also participated in the tender offer by Neo Solar Corp. (NSP) of DelSolar and sold 32,409,000 shares of DelSolar to NSP and received 22,783,527 shares of NSP and cash amounting to $14,929. Note g: The increase in amount was recognized due to adjustment of valuation of fair value besides the description in Note f. Note h: The increase in amount was recognized due to adjustment of valuation of fair value. Note i:
The increase in amount was the private placement of convertible bonds converted into private placement of common stocks and the decrease in amount was recognized due to adjustment of valuation of fair value.

==> picture [596 x 105] intentionally omitted <==

E. Acquisition of real estate in excess of $100,000 or 20% of capital: F. Disposal of real estate in excess of $100,000 or 20% of capital: None.
G. Related party purchases or sales transactions in excess of $100,000 or 20% of capital: Please refer to Notes 5(2)A to C.
H. Receivables from related parties in excess of $100,000 or 20% of capital:
Property
acquired by
Property
acquired
Date of
transaction
Transaction
amount
Status of
payment
Counterparty
Relationship
with the
Company
Original
owner who
sold the
property to
counterparty
Relationship
of the owner
with the
Company
Date of the
original
transfer
Amount
Basic or
reference used
in setting the
price
Reason for
acquisition of
properties and
status of the
properties
Other
commitment
Delta
Electronics,
Inc.
Land and
Buildings in
Nei-Hu
2012.01.13
2,522,980
$ Cash
E-TEN
Information
System Co.,
Ltd.
-
-
-
-
-
$ Quotations on
the market
Office
None
Delta
Electronics,
Inc.
Buildings in
Taoyuan
2012.02.01
1,152,336
Cash
Li Jin
Engineering
Co., Ltd, etc.
-
-
-
-
- Obtained
quotations to
compare and
negotiate price
R&D building
None		 Allowance for
doubtful
accounts
provided		 $ - - - -
Subsequent
collections
(Note)		 $ 768,950 121,405 334,041 275,331
Overdue receivables Action
adopted for
overdue
accounts		 - - - -
Amount $ - - - -
Turnover
rate		 6.04 - 7.78 2.10
Balance of receivable from related
parties		 $ 996,239 280,000 336,057 275,413
Accounts receivable Other receivables Accounts receivable Accounts receivable
Relationship A subsidiary of DEI A subsidiary of DEI A subsidiary of DIH A subsidiary of DEI
Transaction parties Delta Electronics Int'l (Singapore) Pte. Ltd. Delta Electronics Int'l (Singapore) Pte. Ltd. Delta Electronics International Ltd. DelSolar Co., Ltd.
Name of creditor Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc.

107

==> picture [596 x 105] intentionally omitted <==

A.
Information of investee company:		 Note Note (Note o)
Investment income
(loss) recognized
by the Company		 Amount $ 4,985,123 1,470,007 (
1,057,206)		 734 3,538,321 (
37,037)		 3,998,165 (
156,546)
Currency NTD NTD NTD
 NTD NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount $ 4,930,868 1,470,007 (
1,912,500)		 1,852 3,952,498 (
37,037)		 3,975,279 (
156,546)
Currency NTD NTD NTD NTD NTD NTD NTD NTD
Held as of December 31, 2012 Book value
 $ 51,253,353 6,317,411 2,378,066 175,579 18,498,549 1,185,916 3,742,537 119,195
Currency
 NTD NTD NTD NTD NTD NTD NTD NTD
Percentage of
ownership
 94.00 100.00 42.40 39.62 100.00 100.00 100.00 100.00
Number of
shares
 67,680,000 39,800,000 114,473,278 5,250,000 476,948,581 125,000,000 300,000 39,000,000
Original investment Balance as of
December 31,
2011		 $ 8,922,118 1,377,206 3,773,403 159,935 12,067,931 1,250,000 7,270 176,723
Currency
 NTD NTD NTD NTD NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 8,922,118 1,377,206 2,925,401 159,935 12,067,931 1,250,000 7,270 390,000
Currency NTD NTD NTD NTD NTD NTD NTD NTD
Main activities Equity investments Equity investments Manufacturing and
sales of solar
batteries and
related systems		 Equity investments Research,
development,
manufacturing and
sales of thin film
optic-electronic
devices		 Equity investments Sales of electronics
products		 Manufacturing,
wholesale and retail
of medical
equipment
Address Cayman
Islands		 Cayman
Islands		 Taiwan Hong Kong Taiwan Taiwan Singapore Taiwan
Name of
investee
company		 Delta
International
Holding Ltd.		 Delta Networks
Holding Ltd.		 DelSolar Co.,
Ltd.		 PreOptix (Hong
Kong) Co., Ltd.		 Cyntec Co., Ltd. Delta Electronics
Capital Company		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 DelBio Inc.
Name of
investor		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.

==> picture [596 x 105] intentionally omitted <==

Note Note (Note p)
Investment income
(loss) recognized
by the Company		 Amount ($ 28,676) (
19,028)		 (
76,170)		 817,618 (
43,232)		 19,608 (
563)
Currency NTD
 NTD NTD NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount $ 4,599,783 (
19,028)		 (
93,510)		 4,116,364 (
109,846)		 19,611 (
563)
Currency NTD NTD NTD NTD NTD NTD NTD
Held as of December 31, 2012 Book value $ 2,681,476 230,972 104,193 4,516,997 249,446 103,373 9,436
Currency NTD NTD NTD NTD NTD NTD NTD
Percentage of
ownership		 99.97 100.00 83.11 5.54 33.42 100.00 100.00
Number of
shares		 271,017,597 25,000,000 33,243,768 69,128,140 14,212,000 765,000 1,000,000
Original investment Balance as of
December 31,
2011		 $ 2,710,152 - 242,036 114,615 429,319 36,723 -
Currency
 NTD NTD NTD NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 2,710,152 250,000 332,438 114,615 428,355 36,723 10,000
Currency NTD NTD NTD NTD NTD NTD NTD
Main activities Manufacturing and
sales of color filter
and lease services,
etc.		 Research,
designing,
development,
manufacturing and
sales of intelligent
robot systems and
automation
engineering, etc.		 Designing and
experimenting on
integrated circuit
and information
software service		 Manufacturing and
sales of electronic
products		 Manufacturing of
lithium polymer
batteries and
related systems		 Sales of electronic
products		 Research,
development,
energy, technology,
meeting, exhibition,
and lease services
Address Taiwan Taiwan Taiwan Thailand Taiwan Netherlands Taiwan
Name of
investee
company		 Allied Material
Technology
Corp.		 Delta Robot
Automatic Co.,
Ltd.		 NeoEnergy
Microelectronics,
Inc.		 Delta Electronics
(Thailand) Public
Co., Ltd.		 Amita
Technologies,
Inc.		 Deltronics
(Netherlands)
B.V.		 Delta Smart
Green Life Co.,
Ltd.
Name of
investor		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.		 Delta
Electronics,
Inc.

109

==> picture [596 x 105] intentionally omitted <==

Note Note (Notes a
and o)		 (Note a) (Note a) (Note a) (Note a) (Note a) (Note a)
Investment income
(loss) recognized
by the Company		 Amount $ 1,026,120 3,576,036 36,253 (
36,570)		 5,828 (
12,206)		 1,055
Currency NTD NTD NTD NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount $ 1,180,206 3,576,036 36,253 (
98,082)		 5,828 911 1,747
Currency NTD NTD NTD NTD NTD NTD NTD
Held as of December 31, 2012 Book value $ 12,322,696 29,073,298 236,643 42,032 178,778 312,564 251,032
Currency NTD NTD NTD NTD NTD NTD NTD
Percentage of
ownership		 100.00 100.00 100.00 37.21 100.00 32.11 60.38
Number of
shares		 2,000,000 2,549,297,600 22,200,000 9,000,000 5,600 7,583,000 8,000,000
Original investment Balance as of
December 31,
2011		 $ 58,080 9,536,651 468,713 522,720 83,024 230,588 232,320
Currency
 NTD NTD NTD NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 58,080 9,536,651 468,713 522,720 83,024 230,588 232,320
Currency NTD NTD NTD NTD NTD NTD NTD
Main activities Sales of electronic
products		 Equity investments Equity investments Research on special
chemical materials
used in precision
coating process		 Sales of power
products, display
solution products,
electronic
components,
industrial
automation
products and their
materials		 Equity investments Equity investments
Address Malaysia Hong Kong Cayman
Islands		 U.S.A Japan Britain Hong Kong
Name of
investee
company		 Delta Electronics
International Ltd.		 Delta Electronics
(H.K.) Ltd.		 DAC Holding
(Cayman) Ltd.		 Trillion Science,
Inc.		 Delta Electronics
(Japan), Inc.		 Digital
Projection
International Ltd.		 PreOptix (Hong
Kong) Co., Ltd.
Name of
investor		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.

==> picture [596 x 105] intentionally omitted <==

Note Note (Note a) (Note a) (Note a) (Note a) (Note a) (Note b) (Note b)
Investment income
(loss) recognized
by the Company		 Amount $ 603 12,344 15,904 185,450 - (
782)		 (
2,909)
Currency NTD NTD NTD NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount $ 603 12,344 28,185 341,827 (
2,909)		 (
3,611)		 (
2,909)
Currency NTD NTD NTD NTD NTD NTD NTD
Held as of December 31, 2012 Book value $ 57,216 90,052 419,999 5,239,012 - 86,695 16,288
Currency NTD NTD NTD NTD NTD NTD NTD
Percentage of
ownership		 100.00 100.00 100.00 100.00 - 30.00 100.00
Number of
shares		 10,000,000 500,000 2,858,718 1 1 3,000,000 252,002
Original investment Balance as of
December 31,
2011		 $ 37,556 14,520 396,555 4,998,259 - 87,120 30,492
Currency
 NTD NTD NTD NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 37,556 14,520 396,555 4,998,259 - 87,120 30,492
Currency NTD NTD NTD NTD NTD NTD NTD
Main activities Operations
management and
engineering
services		 Warehousing and
logistics services		 Equity investments Equity investments Sales of power
management
system of industrial
automation product
and
telecommunications
equipment		 Equity investments Sales of power
management
system of industrial
automation product
and
telecommunications
equipment
Address Hong Kong U.S.A Samoa British
Virgin
Islands		 Mexico Hong Kong Mexico
Name of
investee
company		 Delta Power
Sharp Ltd.		 DEI Logistics
(USA) Corp.		 Ace Pillar
Holding Co., Ltd.		 Drake Overseas
Financial
Investment Ltd.		 Delta Electronics
International
Mexico SA DE
C.V.		 Crystalrich
(Hong Kong)
Co., Limited		 Delta Electronics
International
Mexico SA DE
C.V.
Name of
investor		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
Electronics
(H.K.) Ltd.		 Delta
Electronics
(H.K.) Ltd.

111

==> picture [596 x 105] intentionally omitted <==

Note (Note c) (Note d) (Note e) (Note e) (Note e) (Note e) (Note f)
Investment income
(loss) recognized
by the Company		 Amount $ 341,907 1,473,053 472,106 95,002 1,114,756 4,525 23,732
Currency NTD NTD NTD NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount $ 341,907 1,511,133 472,106 95,021 1,104,154 4,525 38,525
Currency NTD NTD NTD NTD NTD NTD NTD
Held as of December 31, 2012 Book value $ 2,381,427 6,290,607 2,484,424 1,537,846 2,272,213 37,738 104,758
Currency NTD NTD NTD NTD NTD NTD NTD
Percentage of
ownership		 100.00 100.00 100.00 99.98 100.00 100.00 100.00
Number of
shares		 304,504,306 1,196,886,000 35,000,000 50,040,838 1,000,000 500,000 30,000,000
Original investment Balance as of
December 31,
2011		 $ 1,133,693 5,165,024 1,016,400 466,816 29,040 16,148 185,000
Currency
 NTD NTD NTD NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 1,133,693 5,165,024 1,016,400 466,816 29,040 16,148 185,000
Currency NTD NTD NTD NTD NTD NTD NTD
Main activities Equity investments Equity investments Equity investments Manufacturing and
sales of networking
system and
peripherals		 Trading of
networking system
and peripherals		 Trading of
networking system
and peripherals		 Manufacturing and
sales of wire and
wireless
telecommunications
equipment,
electronic parts and
controlled
telecommunications
radio frequency
devices
Address Hong Kong Cayman
Islands		 Hong Kong Taiwan Malaysia U.S.A Taiwan
Name of
investee
company		 Drake
Investment
(H.K.) Ltd.		 Delta Networks,
Inc.		 Delta Networks
(H.K.) Ltd.		 Delta Networks,
Inc. (Taiwan)		 Delta Networks
International Ltd.		 DNI Logistic
(USA) Corp.		 Ayecom
Technology Co.,
Ltd.
Name of
investor		 Drake
Overseas
Financial
Investment
Ltd.		 Delta
Networks
Holding Ltd.		 Delta
Networks,
Inc.		 Delta
Networks,
Inc.		 Delta
Networks,
Inc.		 Delta
Networks,
Inc.		 Delta
Networks,
Inc. (Taiwan)

==> picture [596 x 105] intentionally omitted <==

Note Note (Note g) (Note g) (Note g) (Note h) (Note h) (Note i) (Note j) (Note j) (Note k)
Investment income
(loss) recognized
by the Company		 Amount ($ 344,330) (
19,519)		 - (
387,166)		 14,337 14,942 (
913)		 17,608 (
20,748)
Currency NTD
 NTD NTD NTD NTD NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount ($ 344,330) (
19,519)		 (
20,748)		 (
387,166)		 14,337 14,942 (
913)		 17,608 (
20,748)
Currency NTD
 NTD NTD NTD NTD NTD NTD NTD NTD
Held as of December 31, 2012 Book value $ 3,491,425 (
46,122)		 - 3,210,983 280,158 263,387 178,169 84,079 (
46,187)
Currency NTD NTD NTD NTD NTD NTD NTD NTD NTD
Percentage of
ownership		 100.00 100.00 - 100.00 100.00 100.00 100.00 100.00 100.00
Number of
shares		 129,150,000 310,000 1 120,100,000 900 - - - 1,435,168
Original investment Balance as of
December 31,
2011		 $ 4,079,842 6,060 - 3,487,704 261,360 243,646 143,748 66,792 5,808
Currency
 NTD NTD NTD NTD NTD NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 4,079,842 8,983 - 3,487,704 261,360 243,646 143,748 66,792 8,712
Currency NTD NTD NTD NTD NTD NTD NTD NTD NTD
Main activities Equity investments Equity investments Contractor of solar
systems project		 Equity investments Equity investments Design and sale of
solar systems		 Contractor of solar
systems project		 Contractor of solar
systems project		 Contractor of solar
systems project
Address Cayman
Islands		 Singapore India Hong Kong U.S.A U.S.A U.S.A U.S.A India
Name of
investee
company		 DelSolar Holding
(Cayman) Ltd.		 DelSolar Holding
Singapore Pte.
Ltd.		 DelSolar India
EPC Company
Private Ltd.		 DelSolar (H.K.)
Ltd.		 DelSolar US
Holdings
(Delaware) Corp.		 DelSolar
Development
(Delaware) LLC		 DSS-RAL LLC DSS-USF PHX
LLC		 DelSolar India
EPC Company
Private Ltd.
Name of
investor		 DelSolar Co.,
Ltd.		 DelSolar Co.,
Ltd.		 DelSolar Co.,
Ltd.		 DelSolar
Holding
(Cayman)
Ltd.		 DelSolar
Holding
(Cayman)
Ltd.		 DelSolar US
Holdings
(Delaware)
Corp.		 DelSolar
Development
(Delaware)
LLC		 DelSolar
Development
(Delaware)
LLC		 DelSolar
Holding
Singapore
Pte. Ltd.

113

==> picture [596 x 105] intentionally omitted <==

Note Note (Note l) (Note m) (Note n) (Note n) Note a:
Investment income / loss recognized by Delta International Holding Ltd.
Note b:
Investment income / loss recognized by Delta Electronics (H.K.) Ltd.
Note c:
Investment income / loss recognized by Drake Overseas Financial Investment Ltd.
Note d:
Investment income / loss recognized by Delta Networks Holding Ltd.
Note e:
Investment income / loss recognized by Delta Networks, Inc.
Note f:
Investment income / loss recognized by Delta Networks, Inc. (Taiwan)
Note g:
Investment income / loss recognized by DelSolar Co., Ltd.
Note h:
Investment income / loss recognized by DelSolar Holding (Cayman) Ltd.
Note i:
Investment income / loss recognized by DelSolar US Holdings (Delaware) Corp.
Note j:
Investment income / loss recognized by DelSolar Development (Delaware) LLC.
Note k:
Investment income / loss recognized by DelSolar Holding Singapore Pte. Ltd.
Note l:
Investment income / loss recognized by Cyntec Co., Ltd.
Note m: Investment income / loss recognized by Fairview Assets Ltd.
Note n:
Investment income / loss recognized by Grandview Holding Ltd.
Note o:
The investment income /loss is net of the elimination of intercompany transactions.
Note p:
The weighted average shareholding ratio was 20.01% and the investment income included the elimination of intercompany transactions.
Investment income
(loss) recognized
by the Company		 Amount
 $ 4,049,230 4,049,924 4,067,926 (
4,454)
Currency
 NTD NTD NTD NTD
Income (loss) of the
investee company		 Amount
 $ 4,049,230 4,049,924 4,067,926 (
4,454)
Currency
 NTD NTD NTD NTD
Held as of December 31, 2012 Book value
 $ 11,385,837 10,773,829 6,166,012 4,241,575
Currency
 NTD NTD NTD NTD
Percentage of
ownership
 100.00 100.00 100.00 100.00
Number of
shares
 32,580,062 127,140,000 5,000,000 122,140,000
Original investment Balance as of
December 31,
2011		 $ 1,109,005 2,818,622 145,200 2,673,422
Currency
 NTD NTD NTD NTD
Balance as of
December 31,
2012
 $ 1,111,403 3,692,146 145,200 3,546,946
Currency NTD NTD NTD NTD
Main activities Equity investments Equity investments Trading Equity investments
Address Cayman
Islands		 Cayman
Islands		 Malaysia Hong Kong
Name of
investee
company		 Fairview Assets
Ltd.		 Grandview
Holding Ltd.		 Cyntec
International
Ltd.-Labuan		 Cyntec Holding
(HK) Ltd.
Name of
investor		 Cyntec Co.,
Ltd.		 Fairview
Assets Ltd.		 Grandview
Holding Ltd.		 Grandview
Holding Ltd

==> picture [596 x 105] intentionally omitted <==

Financing activities to any company or person: Note Note (Notes c
and g)		 (Notes c
and g)		 (Notes c
and g)		 (Notes c
and h)		 (Notes c
and h)		 (Notes c
and h)		 (Notes d
and i)
Ceiling on
total loans
granted		 $ 10,873,914 10,873,914 10,873,914 2,424,144 1,849,185 1,918,633 4,554,335
Limit on
loans granted
to a single
party		 $ 5,436,957 5,436,957 5,436,957 606,036 462,296 479,658 4,554,335
Collateral Value $ - - - - - - -
Item None None None None None None None
Allowance
for
doubtful
accounts		 $ - - - - - - -
Reason for
short-term
financing		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital
Amount of
transactions
with the
borrower		 $ - - - - - - -
Nature
of loan		 Short- term
financing		 Short- term
financing		 Short- term
financing		 Short- term
financing		 Short- term
financing		 Short- term
financing		 Short- term
financing
Interest
rate		 0.81000% 0.81000% 0.80800% - - - -
Balance at
December 31,
2012		 $ 1,452,000 580,800 580,800 - - - -
Maximum
outstanding
balance during
the year ended
December 31, 2012		 $ 1,452,000 580,800 580,800 415,818 323,414 277,212 580,800
General
ledger
account		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties
Borrower Delta
Electronics
(Jiangsu) Ltd.		 Delta Electro-
Optics
(Wujiang)
Ltd.		 Delta
Electronics
(Wuhu) Co.,
Ltd.		 Delta
Electronics
(Shanghai)
Co., Ltd.		 Delta
Electronics
(Shanghai)
Co., Ltd.		 Delta
Electronics
(Shanghai)
Co., Ltd.		 Cyntec
(Suzhou) Co.,
Ltd.
Creditor Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
International
Holding Ltd.		 Delta
Electronics
(Jiangsu) Ltd.		 Delta
Electronics
Components
(Wujiang)
Ltd.		 Delta Electro-
Optics
(Wujiang)
Ltd.		 Fairview
Assets Ltd.
Number 1 1 1 2 3 4 5

115

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Note Note (Notes d
and i)		 (Notes e
and i)		 (Notes f
and i)		 (Notes c
and i)		 (Notes c
and i)		 Note a: Number 0 represents the Company; the investee companies are in order from number 1.
Note b: Maximum outstanding balance during the current period was translated into New Taiwan dollars using the exchange rate at December 31, 2012, which the Company reported to the Securities and Futures Bureau.
Note c: The actual amount of loans granted is the same with the monetary limit resolved by the Board of Directors.
Note d: Because the financing activities expired in November 2012, the actual amount of loans granted is the same with the monetary limit resolved by the Board of Directors.
Note e: The actual amount of loans granted at December 31, 2012 is $290,400.
Note f: The actual amount of loans granted at December 31, 2012 is $0.
Note g: 1. In accordance with the Delta International Holding Ltd. Operating Procedures of Fund Lending, the limits for each recipient according to reasons of lending are as follows:
When lending funds to other companies or enterprises with which the company has business relations, the amount lent to a single recipient shall not exceed the total transaction amount between the recipient and
the company in the most recent year and shall not exceed 10 percent of the company’s net worth as stated in the company’s latest financial statements.
When providing short-term financing to other companies or enterprises, the short-term financing amount to a single recipient shall not exceed 10 percent of the company’s net worth as stated in the company’
latest financial statements.
Ceiling on
total loans
granted		 $ 4,554,335 4,309,532 4,309,532 2,466,405 2,466,405
Limit on
loans granted
to a single
party		 $ 4,554,335 4,309,532 4,309,532 2,466,405 2,466,405
Collateral Value $ - - - - -
Item None None None None None
Allowance
for
doubtful
accounts		 $ - - - - -
Reason for
short-term
financing		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital		 Additional
operating
capital
Amount of
transactions
with the
borrower		 $ - - - - -
Nature
of loan		 Short- term
financing		 Short- term
financing		 Short- term
financing		 Short- term
financing		 Short- term
financing
Interest
rate		 - 1% 1% 1% 1%
Balance at
December 31,
2012		 $ - 580,800 217,800 348,480 145,200
Maximum
outstanding
balance during
the year ended
December 31, 2012		 $ 580,800 580,800 580,800 348,480 145,200
General
ledger
account		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties		 Other
receivables-
related parties
Borrower Cyntec
Electronics
(Suzhou) Co.,
Ltd.		 Cyntec
(Suzhou) Co.,
Ltd.		 Cyntec
Electronics
(Suzhou) Co.,
Ltd.		 Cyntec
(Suzhou) Co.,
Ltd.		 Cyntec
Electronics
(Suzhou) Co.,
Ltd.
Creditor Fairview
Assets Ltd.		 Grandview
Holding Ltd.		 Grandview
Holding Ltd.		 Cyntec
International
Ltd.		 Cyntec
International
Ltd.
Number 5 6 6 7 7
2. In accordance with the Delta International Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending according to its reasons are as follows:
When lending funds to other companies or enterprises with which the company has business relations, the amount lent to a single recipient shall not exceed the total transaction amount between the recipient and
the company in the most recent year and the total amount lent shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
When providing short-term financing to other companies or enterprises, the total short-term financing amount shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial
statements.
The aggregate amount of total funds lent to other companies or enterprises with which the company has business relations and total short-term financing provided to other companies or enterprises shall not
exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
Note h: 1. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating of Fund Lending, the amount lent to a single recipient
shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 10 percent of the company’s net worth as stated in the
company’s latest financial statements.
2. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating Procedures of Fund Lending, the limits for total amount
of fund lending shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 40 percent of the company’s net worth as
stated in the company’s latest financial statements.
Note i: 1. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, when providing short-term financing to other companies or other enterprise, the amount lent
to a single recipient shall not exceed 40 percent of the company’s net worth as stated in the company’s latest financial statements.
2. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending shall not exceed 40 percent of the company’s net
worth as stated in the company’s latest financial statements.
C.
Guarantee information:		 2. In accordance with the Delta International Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending according to its reasons are as follows:
When lending funds to other companies or enterprises with which the company has business relations, the amount lent to a single recipient shall not exceed the total transaction amount between the recipient and
the company in the most recent year and the total amount lent shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
When providing short-term financing to other companies or enterprises, the total short-term financing amount shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial
statements.
The aggregate amount of total funds lent to other companies or enterprises with which the company has business relations and total short-term financing provided to other companies or enterprises shall not
exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
Note h: 1. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating of Fund Lending, the amount lent to a single recipient
shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 10 percent of the company’s net worth as stated in the
company’s latest financial statements.
2. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating Procedures of Fund Lending, the limits for total amount
of fund lending shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 40 percent of the company’s net worth as
stated in the company’s latest financial statements.
Note i: 1. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, when providing short-term financing to other companies or other enterprise, the amount lent
to a single recipient shall not exceed 40 percent of the company’s net worth as stated in the company’s latest financial statements.
2. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending shall not exceed 40 percent of the company’s net
worth as stated in the company’s latest financial statements.
C.
Guarantee information:		 2. In accordance with the Delta International Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending according to its reasons are as follows:
When lending funds to other companies or enterprises with which the company has business relations, the amount lent to a single recipient shall not exceed the total transaction amount between the recipient and
the company in the most recent year and the total amount lent shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
When providing short-term financing to other companies or enterprises, the total short-term financing amount shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial
statements.
The aggregate amount of total funds lent to other companies or enterprises with which the company has business relations and total short-term financing provided to other companies or enterprises shall not
exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
Note h: 1. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating of Fund Lending, the amount lent to a single recipient
shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 10 percent of the company’s net worth as stated in the
company’s latest financial statements.
2. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating Procedures of Fund Lending, the limits for total amount
of fund lending shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 40 percent of the company’s net worth as
stated in the company’s latest financial statements.
Note i: 1. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, when providing short-term financing to other companies or other enterprise, the amount lent
to a single recipient shall not exceed 40 percent of the company’s net worth as stated in the company’s latest financial statements.
2. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending shall not exceed 40 percent of the company’s net
worth as stated in the company’s latest financial statements.
C.
Guarantee information:		 2. In accordance with the Delta International Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending according to its reasons are as follows:
When lending funds to other companies or enterprises with which the company has business relations, the amount lent to a single recipient shall not exceed the total transaction amount between the recipient and
the company in the most recent year and the total amount lent shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
When providing short-term financing to other companies or enterprises, the total short-term financing amount shall not exceed 20 percent of the company’s net worth as stated in the company’s latest financial
statements.
The aggregate amount of total funds lent to other companies or enterprises with which the company has business relations and total short-term financing provided to other companies or enterprises shall not
exceed 20 percent of the company’s net worth as stated in the company’s latest financial statements.
Note h: 1. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating of Fund Lending, the amount lent to a single recipient
shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 10 percent of the company’s net worth as stated in the
company’s latest financial statements.
2. In accordance with the Delta Electronics (Jiangsu) Ltd., Delta Electronics Components (Wujiang) Ltd. and Delta Electro-Optics (Wujiang) Ltd. Operating Procedures of Fund Lending, the limits for total amount
of fund lending shall not exceed the total transaction amount between the recipient and the company in the most recent year and the total amount lent shall not exceed 40 percent of the company’s net worth as
stated in the company’s latest financial statements.
Note i: 1. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, when providing short-term financing to other companies or other enterprise, the amount lent
to a single recipient shall not exceed 40 percent of the company’s net worth as stated in the company’s latest financial statements.
2. In accordance with the Fairview Assets Ltd. and Grandview Holding Ltd. Operating Procedures of Fund Lending, the limits for total amount of fund lending shall not exceed 40 percent of the company’s net
worth as stated in the company’s latest financial statements.
C.
Guarantee information:
Ceiling of the
outstanding
guarantee
to the respective
party (Note b)		 1,690,643
$
Ratio of
accumulated
guarantee
amount to net
value of
the Company		 -
Amount
of guarantee
with collateral
placed		 -
$
Outstanding
guarantee
amount
at December 31,
2012		 -
$
Highest
outstanding
guarantee
amount in 2012		 270,600
$
Limit on
guarantees
provided for a
single party		 1,127,095
$
Parties being guaranteed Relationship with the Company The ultimate parent company and mutual
guarantees in the trade due to construction
undertaking pursuant to the contracts.
Name Delta Electronics,
Inc.
Name of the company
providing guarantee		 Name DelSolar Co., Ltd.
Number
(Note a)		 1

117

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Note
December 31, 2012 Market value 12,322,696
$		 236,643 178,778 29,073,298 419,999 5,239,012 251,032 5,857,837 312,564
Percentage 100.00 100.00 100.00 100.00 100.00 100.00 60.38 15.39 32.11
Book value 12,322,696
$		 236,643 178,778 29,073,298 419,999 5,239,012 251,032 1,145,009 312,564
Number
of shares		 2,000,000 22,200,000 5,600 2,549,297,600 2,858,718 1 8,000,000 191,984,450 7,583,000
General ledger accounts Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method
Relationship of
the issuers with
the Company		 A subsidiary of DIH A subsidiary of DIH A subsidiary of DIH A subsidiary of DIH A subsidiary of DIH A subsidiary of DIH A subsidiary jointly
controlled by the
Company and DIH		 Investee company
accounted for under
the equity method of
the Company		 Investee company
accounted for under
the equity method of
the Company
Name and kind of
marketable securities		 Delta Electronics International
Ltd. common stock		 DAC Holding (Cayman) Limited
common stock		 Delta Electronics (Japan), Inc.
common stock		 Delta Electronics (H.K.) Ltd.
common stock		 Ace Pillar Holding Co., Ltd.
common stock		 Drake Overseas Financial
Investment Ltd. common stock		 PreOptix (Hong Kong) Co., Ltd.
common stock		 Delta Electronics (Thailand)
Public Co., Ltd. common stock		 Digital Projection International
Ltd. common stock
Name of investor Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.

==> picture [596 x 105] intentionally omitted <==

Note
December 31, 2012 Market value 396,784
$		 277,252 364,330 4,315,462 4,078,785 3,915,103 3,810,438 2,300,711 3,318,124 2,539,416
Percentage 10.38 4.75 100.00 100.00 100.00 100.00 100.00 55.00 55.00
Book value 396,784
$		 277,252 364,330 4,315,462 4,078,785 3,915,103 3,810,438 2,300,711 3,318,124 2,539,416
Number
of shares		 58,940,390 9,547,235 - - - - - - -
General ledger accounts Long-term investments
accounted for under the
equity method		 Financial assets carried at
cost - non-current		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method
Relationship of
the issuers with
the Company		 A subsidiary jointly
controlled by DIH, Ace
and Drake		 None A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK
Name and kind of
marketable securities		 Delta Greentech (China) Co.,
Ltd. common stock		 Solarflare Communications, Inc.
preferred shares		 Delta Power Sharp Ltd. common
stock, etc.		 Delta Electronics (Dongguan)
Co., Ltd. certificate of amount
contributed		 Delta Electronics Power
(Dongguan) Co., Ltd.
certificate of amount
contributed		 Delta Electronics (Shanghai) Co.,
Ltd. certificate of amount
contributed		 Delta Electronics (Wuhu) Co.,
Ltd. certificate of amount
contributed		 Delta Electronics (Chenzhou)
Co., Ltd. certificate of amount
contributed		 Delta Electronics (Jiangsu) Ltd.
certificate of amount contributed		 Delta Electronics Components
(Wujiang) Ltd. certificate of
amount contributed
Name of investor Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta International Holding
Ltd.		 Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd.

119

==> picture [596 x 105] intentionally omitted <==

Note
December 31, 2012 Market value 2,578,989
$		 993,688 952,905 215,442 102,983 176,052 149,806 2,758 8,472 218,205
Percentage 55.00 55.00 100.00 100.00 3.81 100.00 30.00 30.00 100.00
Book value 2,578,989
$		 993,688 952,905 215,442 102,983 176,052 149,806 2,758 8,472 218,205
Number
of shares		 - - - - 21,646,341 - - - -
General ledger accounts Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method
Relationship of
the issuers with
the Company		 A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK A subsidiary of DHK A subsidiary jointly
controlled by DIH, Ace
and Drake		 A subsidiary of DWH A subsidiary jointly
controlled by DWH
and DPEC		 A subsidiary jointly
controlled by DDG
and DPEC		 A subsidiary of DCZ
Name and kind of
marketable securities		 Delta Electro-Optics (Wujiang)
Ltd. certificate of amount
contributed		 Delta Video Display System
(Wujiang) Ltd. certificate of
amount contributed		 Delta Green (Tianjin) Industries
Co., Ltd. certificate of amount
contributed		 Delta Electronics (Wujiang)
Trading Co., Ltd. certificate of
amount contributed		 Delta Electronics International
Mexico S.A. DE C.V.common
stock, etc.		 Delta Greentech (China) Co.,
Ltd. common stock		 Wuhu Delta Technology Co.,
Ltd. certificate of amount
contributed		 Delta Energy Technology (Wuhu)
Co., Ltd. certificate of amount
contributed		 Delta Energy Technology
(Dongguan) Co., Ltd. certificate
of amount contributed		 Chenzhou Delta Technology Co.,
Ltd. certificate of amount
contributed
Name of investor Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Delta Electronics (H.K.) Ltd. Ace Pillar Holding Ltd. Delta Electronics (Wuhu)
Co., Ltd. (DWH)		 Delta Electronics (Wuhu)
Co., Ltd. (DWH)		 Delta Electronics (Dongguan)
Co., Ltd. (DDG)		 Delta Electronics (Chenzhou)
Co., Ltd. (DCZ)

==> picture [596 x 105] intentionally omitted <==

Note
December 31, 2012 Market value 2,762
$		 7,900 46,417 2,381,427 2,233,439 241,901 415,925 5,524 6,290,607 1,537,846
Percentage 30.00 90.00 100.00 48.51 100.00 100.00 30.00 100.00 99.98
Book value 2,762
$		 7,900 46,417 2,381,427 2,233,439 241,901 415,925 5,524 6,290,607 1,537,846
Number
of shares		 - - 304,504,306 275,549,268 - - - 1,196,886,000 50,040,838
General ledger accounts Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method
Relationship of
the issuers with
the Company		 A subsidiary jointly
controlled by DCZ
and DPEC		 A subsidiary jointly
controlled by DGC and
DPEC		 A subsidiary of Drake A subsidiary jointly
controlled by DIH, Ace
and Drake		 A subsidiary of
Crystalrich-HK		 A subsidiary of PHK A subsidiary jointly
controlled by DWO
and DPEC		 A subsidiary of DNH A subsidiary of DNI
Cayman
Name and kind of
marketable securities		 Delta Energy (Chenzhou)
Technology Co., Ltd. certificate
of amount contributed		 Delta Energy Technology
(Shanghai) Co., Ltd. certificate of
amount contributed		 Delta Energy Technology
(Shanghai) Co., Ltd. certificate of
amount contributed, etc.		 Drake Investment (H.K.) Ltd.
common stock		 Delta Greentech (China) Co.,
Ltd.common stock		 Crystalrich (Guangzhou) Co.,
Ltd. certificate of amount
contributed		 PreOptix (Jiangsu) Co., Ltd.
certificate of amount contributed		 Delta Energy Technology
(Wujiang) Co., Ltd. certificate of
amount contributed		 Delta Networks, Inc. common
stock		 Delta Networks, Inc. (Taiwan)
common stock
Name of investor Delta Electronics (Chenzhou)
Co., Ltd. (DCZ)		 Delta Greentech (China) Co.,
Ltd. (DGC)		 Delta Electronics (Shanghai)
Co., Ltd.		 Drake Overseas Financial
Investment Ltd.		 Drake Investment (HK) Ltd. Crystalrich (Hong Kong) Co.,
Ltd. (Crystalrich-HK)		 PreOptix (Hong Kong) Co.,
Ltd. (PHK)		 Delta Electro-Optics
(Wujiang) Ltd. (DWO)		 Delta Networks Holding Ltd. Delta Networks, Inc.

121

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Note
December 31, 2012 Market value 2,272,213
$		 2,484,424 37,738 104,758 2,042,227 75,272 3,491,425 46,122)
(		 3,210,983 280,158
Percentage 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Book value 2,272,213
$		 2,484,424 37,738 104,758 2,042,227 75,272 3,491,425 46,122)
(		 3,210,983 280,158
Number
of shares		 1,000,000 35,000,000 500,000 30,000,000 - 129,150,000 120,100,000 900
General ledger accounts Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method
Relationship of
the issuers with
the Company		 A subsidiary of DNI
Cayman		 A subsidiary of DNI
Cayman		 A subsidiary of DNI
Cayman		 A subsidiary of DNI
Cayman		 A subsidiary of DNHK A subsidiary of
DelSolar		 A subsidiary of DSH A subsidiary of DSH
Name and kind of
marketable securities		 Delta Networks International Ltd.
common stock		 Delta Networks (H.K.) Ltd.
common stock		 DNI Logistic (USA) Corp.
common stock		 Ayecom Technology Co., Ltd.
common stock.		 Delta Networks (Dongguan) Ltd.
certificate of amount contributed		 Delta Networks (Shanghai) Ltd.
certificate of amount contributed,
etc.		 DelSolar Holding (Cayman) Ltd. DelSolar Holding Singapore Pte.
Ltd. common stock, etc.		 DelSolar (H.K.) Ltd. common
stock		 DelSolar US Holdings
(Delaware) Corp. common stock
Name of investor Delta Networks, Inc. Delta Networks, Inc. Delta Networks, Inc. Delta Networks, Inc.
(Taiwan)		 Delta Networks (H.K.) Ltd. Delta Networks (H.K.) Ltd. DelSolar Co., Ltd. (DelSolar) DelSolar Co., Ltd. (DelSolar) DelSolar Holding (Cayman)
Ltd.		 DelSolar Holding (Cayman)
Ltd.

==> picture [596 x 105] intentionally omitted <==

Note
December 31, 2012 Market value 3,208,649
$		 263,387 178,169 84,079 46,187)
(		 11,385,837 104,081 10,773,829 6,166,012 4,241,575
Percentage 100.00 100.00 100.00 100.00 100.00 100.00 11.53 100.00 100.00 100.00
Book value 3,208,649
$		 263,387 178,169 84,079 46,187)
(		 11,385,837 104,081 10,773,829 6,166,012 4,241,575
Number
of shares		 - - - - 1,435,168 32,580,062 200,000 127,140,000 5,000,000 122,140,000
General ledger accounts Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Other liabilities - other Long-term investments
accounted for under the
equity method		 Financial assets carried at
cost - non-current		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method
Relationship of
the issuers with
the Company		 A subsidiary of DSHK A subsidiary of DSUS A subsidiary of DS
Delaware		 A subsidiary of DS
Delaware		 A subsidiary of DSH-
SG		 A subsidiary of Cyntec None A subsidiary of
Fairview		 A subsidiary of
Grandview		 A subsidiary of
Grandview
Name and kind of
marketable securities		 DelSolar (Wujiang) Ltd.
certificate of amount contributed		 DelSolar Development
(Delaware) LLC stock ownership		 DSS-RAL LLC stock ownership DSS-USF PHX LLC stock
ownership		 DelSolar India EPC Company
Private Ltd. common stock		 Fairview Assets Ltd. common
stock		 SUSUMU Co., Ltd. common
stock		 Grandview Holding Ltd. common
stock		 Cyntec International Ltd.
common stock		 Cyntec Holding (H.K.) Ltd.
common stock
Name of investor DelSolar (H.K.) Ltd. DelSolar US Holdings
(Delaware) Corp.		 DelSolar Development
(Delaware) LLC		 DelSolar Development
(Delaware) LLC		 DelSolar Holding Singapore
Pte. Ltd.		 Cyntec Co., Ltd. (Cyntec) Cyntec Co., Ltd. (Cyntec) Fairview Assets Ltd. Grandview Holding Ltd. Grandview Holding Ltd.

123

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Note
December 31, 2012 Market value 2,078,632
$		 2,161,858 247,513 123,349 179,554 497,353
Percentage 100.00 100.00 - 8.71 1.09
Book value 2,078,632
$		 2,161,858 247,513 123,349 179,554 497,353
Number
of shares		 - - - 5,605,351 1,769,000
General ledger accounts Long-term investments
accounted for under the
equity method		 Long-term investments
accounted for under the
equity method		 Financial assets at fair
value through profit or
loss - non-current		 Financial assets carried at
cost - non-current		 Available-for-sale
financial assets
Relationship of
the issuers with
the Company		 A subsidiary of CHK A subsidiary of CHK None None None None
Name and kind of
marketable securities		 Cyntec (Suzhou) Co., Ltd.
certificate of amount contributed		 Cyntec Electronics (Suzhou) Co.,
Ltd. certificate of amount
contributed		 ALLTOP Technology Co., Ltd.
convertible bond		 Candmark Electroptics Co., Ltd.
common stock (Formerly
"Candmark Enterprise Co., Ltd.")		 Tong Hsing Electronic Industries,
Ltd. common stock		 Ledlink Optics, Inc. common
stock, etc.
Name of investor Cyntec Holding (H.K.) Ltd. Cyntec Holding (H.K.) Ltd. Delta Electronics Capital
Company		 Delta Electronics Capital
Company		 Delta Electronics Capital
Company		 Delta Electronics Capital
Company

==> picture [596 x 105] intentionally omitted <==

Marketable securities acquired or sold in excess of $100,000 or 20% of capital: December 31, 2012 Amount -
$		 3,915,103 10,773,829 4,241,575 2,078,632
Number of
shares		 - - 127,140,000 122,140,000 -
Disposal Disposal
gain (loss)		 450)
($		 - - - -
Book value 150,000
$		 - - - -
Selling
price		 149,550
$		 - - - -
Number of
shares		 2,400,000 - - - -
Addition Amount -
$		 2,000,288
(Note a)		 3,973,691
(Note b)		 739,847
(Note c)		 319,197
(Note d)
Number of
shares		 - - 30,080,000 30,080,000 -
January 1, 2012 Amount 150,000
$		 1,914,815 6,800,138 3,501,728 1,759,435
Number of
shares		 2,400,000 - 97,060,000 92,060,000 -
Relationship None Subsidiary Subsidiary Subsidiary Subsidiary
Name of
transaction
parties		 Shian-Lung
Tsai		 Delta
Electronics
(Shanghai)
Co., Ltd.		 Grandview
Holding Ltd.		 Cyntec
Holding
(H.K.) Ltd.		 Cyntec
(Suzhou) Co.,
Ltd.
General
ledger
accounts		 Financial
assets carried
at cost - non-
current		 Long-term
investments
accounted for
under the
equity
method		 Long-term
investments
accounted for
under the
equity
method		 Long-term
investments
accounted for
under the
equity
method		 Long-term
investments
accounted for
under the
equity
method
Name and kind of
marketable
security		 Chin Ming
Shan Optronics
Corporation
common stock		 Delta
Electronics
(Shanghai) Co.,
Ltd. certificate
of amount
contributed		 Grandview
Holding Ltd.
common stock		 Cyntec Holding
(H.K.) Ltd.
common stock		 Cyntec
(Suzhou) Co.,
Ltd. certificate
of amount
contributed
Acquirer/
seller		 Delta
Electronics
Capital
Company		 Delta
Electronics
(H.K.) Ltd.		 Fairview
Assets Ltd.		 Grandview
Holding Ltd.		 Cyntec
Holding
(H.K.) Ltd.

125

January 1, 2012
Addition
Disposal
December 31, 2012
Name and		 kind of
General
Name of		 Number of
Number of
Number of
Selling
Disposal
Number of
Acquirer/
marketable
ledger
transaction		 shares
Amount
shares
Amount
shares
price
Book value
gain (loss)
shares
Amount
seller
security
accounts
parties
Relationship		 -
1,742,355
$ -
419,503
$ -
-
$ -
$ -
$ -
2,161,858
$ Cyntec
Cyntec
Long-term
Cyntec
Subsidiary		 (Note e)
Holding
(H.K.) Ltd.
Electronics
(Suzhou) Co.,
investments
accounted for
Electronics
(Suzhou) Co.,		 Ltd. certificate
under the
Ltd.		 of amount
equity		 contributed
method		 30,000,000
18,974)
(
123,732
10,000,000
-
(Note g)
-
30,000,000
104,758
Delta
Ayecom
Long-term
Ayecom
Subsidiary		 (Note f)
Networks,
Inc.
Technology
Co., Ltd.
investments /
Other
Technology
Co., Ltd.		 (Taiwan)
common stock
liabilities		 Note a: Delta Electronics (H.K.) Ltd. invested $1,975,878 in Delta Electronics (Shanghai) Co., Ltd. Investment income or loss accounted for under the equity method and adjustment recognized due to change in subsidiary’s net asset value was recorded. Note b: Fairview Assets Ltd. invested in Grandview Holding Ltd. in the amount of $873,523. Investment income or loss accounted for under the equity method and adjustment recognized due to change in subsidiary’s net asset value was recorded. Note c: Grandview Holding Ltd. invested $873,523 in Cyntec Holding (H.K.) Ltd. Investment income or loss accounted for under the equity method and adjustment recognized due to change in subsidiary’s net asset value was recorded. Note d: Cyntec Holding (H.K.) Ltd. invested $439,425 in Cyntec (Suzhou) Co., Ltd. Investment income or loss accounted for under the equity method and adjustment recognized due to change in subsidiary’s net asset value was recorded. Note e: Cyntec Holding (H.K.) Ltd. invested $435,600 in Cyntec Electronics (Suzhou) Co., Ltd. Investment income or loss accounted for under the equity method and adjustment recognized due to change in subsidiary’s net asset value was recorded. Note f: Delta Networks, Inc. (Taiwan) invested $100,000 in Ayecom Technology Co., Ltd.
Investment income accounted for under the equity method was recorded.		 Note g: Ayecom Technology Co., Ltd. reduced its capital to cover deficit of $100,000 in 2012.

==> picture [596 x 105] intentionally omitted <==

Other commitment None None Note
Reason for
Basis or		 acquisition of
reference		 properties and
used in		 status of the
setting the		 properties
price		 - Quotations
Office		 on the market - Obtained
Plant		 quotations to compare and negotiate price Accounts or notes receivable (payable) % of total accounts or notes receivable Balance
(payable)		 197,411
3.02		 3,960,453
60.63		 133,523
2.04
Acquisition of real estate in excess of $100,000 or 20% of capital: Original owner
Relationship		 Relationship
who sold the
of the owner
Date of the		 Property
Property
Date of
Transaction
Status of
with the
property to
with the
original		 Counterparty
acquired by
acquired
transaction
amount
payment
Company
counterparty
Company
transfer
Amount		 Delta
Buildings
2012.09.20
$ 1,940,358 Cash
Beijng Riva
-
-
-
-
$		 Electronics
Investment		 (Shanghai)
Co. Ltd.		 Co., Ltd. Delta
Buildings
2012.12.01
136,213 Cash
JiangSu
-
-
-
-		 Electronics
HuiTian		 (Wuhu) Co.,
Building and		 Ltd.
Installation		 Engineering Co., Ltd. Disposal of real estate in excess of $100,000 or 20% of capital: None. Related party purchases or sales transactions in excess of $100,000 or 20% of capital: The transactions of the Company and its consolidated subsidiaries: Please see Notes 5. (2) A and C. Description of and reasons for difference in transaction terms compared to non-related party Transaction terms
transactions		 Purchases
% of total		 (sales)
Purchases
Name of the
Name of transaction		 (Note a)
Amount
(sales)
Credit terms
Unit price
Credit period
counterparty
parties
Relationship		 Delta Electronics
Delta Electronics
Affiliated
Sales
634,394
$ 2.25
75 days
-
-
$		 Int'l Ltd.
(Japan), Inc.
enterprise		 Delta Electronics
DEI Logistics (USA)
Affiliated
Sales
14,751,352
52.31
75 days
-
-		 Int'l Ltd.
Corp.
enterprise		 Delta Electronics
Digital Projection Ltd.
Associate
Sales
472,845
1.68
75 days
-
-		 Int'l Ltd.
F. G. H.

127

==> picture [596 x 105] intentionally omitted <==

Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 3.35 10.54 3.65 1.72 1.54 2.28 1.37 0.24 1.30
Balance 823,348
$		 2,588,236 895,905 423,097 378,203 560,617 337,131 60,186 318,881
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - - - - - - - - -
Unit price - - - - - - - - -
Transaction terms Credit terms 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days
% of total
Purchases
(sales)		 5.00 14.74 9.54 2.28 2.61 3.21 0.89 0.11 2.46
Amount 7,064,768
$		 20,835,023 13,491,324 3,219,022 3,685,170 4,541,214 1,257,864 156,369 3,475,624
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise
Name of transaction
parties		 Delta Electronics
(Dongguan) Co., Ltd.		 Delta Electronics
Power (Dongguan)
Co., Ltd.		 Delta Electronics
(Jiangsu) Ltd.		 Delta Electronics
Components
(Wujiang) Ltd.		 Delta Electronics
Components
(Wujiang) Ltd.		 Delta Electro-Optics
(Wujiang) Ltd.		 Delta Electronics
(Chenzhou) Co., Ltd.		 Chenzhou Delta
Technology Co., Ltd.		 Delta Electronics
(Wuhu) Co., Ltd.
Name of the
counterparty		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.

==> picture [596 x 105] intentionally omitted <==

Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 0.08 0.90 0.68 0.12 0.43 0.23 26.87 0.20 0.59
Balance 19,805
$		 219,978 167,016 30,338 106,253 57,248 6,591,606 48,098 145,979
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - - - - - - - -
Unit price - - - - - - - -
Transaction terms Credit terms 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days
% of total
Purchases
(sales)		 0.09 0.57 1.69 0.14 0.28 0.16 14.52 0.16 0.43
Amount 132,844
$		 805,927 2,392,048 203,601 401,148 230,626 20,536,679 226,623 602,878
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Ultimate parent
company		 Affiliated
enterprise		 Associate
Name of transaction
parties		 Wuhu Delta
Technology Co., Ltd.		 Delta Electronics
(Japan), Inc.		 Delta Electronics
International Ltd.		 PreOptix (Jiangsu)
Co., Ltd.		 Delta Networks
(Dongguan) Ltd.		 Delta Green (Tianjin)
Industries Co., Ltd.		 Delta Electronics, Inc. Deltronics
(Netherlands) B.V.		 Delta Energy Systems
(Switzerland) AG
Name of the
counterparty		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.

129

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Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 0.40 0.11 1.26 0.22 0.31 1.06 9.14 62.52 24.02
Balance 99,035
$		 27,661 309,119 53,634 74,955 260,334 160,099 1,094,543 865,391
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - - - - - - - - -
Unit price - - - - - - - - -
Transaction terms Credit terms 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days
% of total
Purchases
(sales)		 0.25 0.12 0.76 0.26 0.14 0.53 6.63 78.46 28.06
Amount 351,209
$		 165,685 1,078,644 373,009 201,073 748,467 660,967 7,820,141 7,484,655
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Associate Associate Associate Associate Associate Related party in
substance		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise
Name of transaction
parties		 Delta Greentech
(Brasil) S.A.		 Delta Electronics
(Thailand) Public
Company Ltd.		 Delta Greentech (USA)
Corporation		 Delta India Electronics
PVT. Ltd.		 Delta Electronics
(Slovakia) s.r.o.		 Delta Products
Corporation		 Delta Electronics
International Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.		 Delta Electronics
International Ltd.
Name of the
counterparty		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
Int'l (Singapore)
Pte. Ltd.		 Delta Electronics
(Dongguan) Co.,
Ltd.		 Delta Electronics
(Dongguan) Co.,
Ltd.		 Delta Electronics
Power (Dongguan)
Co., Ltd.

==> picture [596 x 105] intentionally omitted <==

Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 3.68 63.98 47.87 11.24 1.02 1.63 91.86 48.98 19.18
Balance 132,466
$		 2,304,965 3,011,455 706,884 64,388 102,307 2,655,312 273,853 24,310
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - - - - - - - - -
Unit price - - - - - - - - -
Transaction terms Credit terms 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days
% of total
Purchases
(sales)		 2.04 67.28 44.55 10.89 1.92 1.46 85.77 33.09 22.45
Amount 544,280
$		 17,944,599 13,280,309 3,245,963 573,141 434,476 14,627,257 909,743 207,011
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise
Name of transaction
parties		 Delta Networks
(Dongguan) Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.		 Delta Networks
(Dongguan) Ltd.		 DNI Logistic (USA)
Corp.		 Delta Networks, Inc.
(Taiwan)		 Ayecom Technology
Co., Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.
Name of the
counterparty		 Delta Electronics
Power (Dongguan)
Co., Ltd.		 Delta Electronics
Power (Dongguan)
Co., Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.		 Delta Networks
(Dongguan) Ltd.		 Delta Networks,
Inc. (Taiwan)		 Ayecom
Technology Co.,
Ltd.

131

==> picture [596 x 105] intentionally omitted <==

Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 7.51 83.65 6.42 73.97 6.34 16.35 74.35 38.14 55.34
Balance 367,040
$		 4,089,658 313,990 841,873 117,811 303,712 1,380,893 375,100 544,276
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - - - - - - - - -
Unit price - - - - - - - - -
Transaction terms Credit terms 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days
% of total
Purchases
(sales)		 13.79 81.55 2.69 88.88 16.50 25.22 53.38 72.39 19.11
Amount 4,848,970
$		 28,673,609 944,492 5,774,149 1,456,860 2,226,505 4,711,692 5,168,789 1,364,872
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise
Name of transaction
parties		 Delta Electronics
International Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics
(Wujiang) Trading
Co., Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics
International Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics
(Shanghai) Co., Ltd.		 Delta Electronics
International Ltd.		 Delta Electronics
(Wujiang) Trading
Co., Ltd.
Name of the
counterparty		 Delta Electronics
(Jiangsu) Ltd.		 Delta Electronics
(Jiangsu) Ltd.		 Delta Electronics
(Jiangsu) Ltd.		 Delta Electronics
Components
(Wujiang) Ltd.		 Delta Electro-
Optics (Wujiang)
Ltd.		 Delta Electro-
Optics (Wujiang)
Ltd.		 Delta Electro-
Optics (Wujiang)
Ltd.		 Delta Video
Display System
(Wujiang) Ltd.		 Delta Video
Display System
(Wujiang) Ltd.

==> picture [596 x 105] intentionally omitted <==

Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 66.97 7.24 92.75 74.87 98.29 91.27 99.96 15.98 82.42
Balance 536,011
$		 108,464 1,389,689 65,408 559,437 381,602 72,550 126,540 135,960
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - - - - - - - - -
Unit price - - - - - - - - -
Transaction terms Credit terms 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days 75 days
% of total
Purchases
(sales)		 56.30 21.86 77.23 74.25 98.74 98.23 99.63 10.20 78.99
Amount 1,402,559
$		 1,842,260 6,507,900 440,983 5,216,871 2,521,459 530,417 434,942 519,648
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise
Name of transaction
parties		 Delta Greentech
(China) Co., Ltd.		 Delta Electronics
International Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.		 Delta Electronics
(Wuhu) Co., Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.		 Delta Electronics
(Chenzhou) Co., Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.		 Delta Electronics Int’l
(Singapore) Pte. Ltd.
Name of the
counterparty		 Delta Electronics
(Wujiang) Trading
Co., Ltd.		 Delta Electronics
(Wuhu) Co., Ltd.		 Delta Electronics
(Wuhu) Co., Ltd.		 Wuhu Delta
Technology Co.,
Ltd.		 Delta Electronics
(Chenzhou) Co.,
Ltd.		 Chenzhou Delta
Technology Co.,
Ltd.		 PreOptix (Jiangsu)
Co., Ltd.		 Delta Electronics
(Japan), Inc.		 Delta Green
(Tianjin)
Industries Co.,
Ltd.

133

==> picture [596 x 105] intentionally omitted <==

ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship		 ote a:
Including the service income in excess of $100,000.
ote b:
The collection terms to third parties are receipt in advance or 30~90 days after acceptance.
ote c:
Selling price is based on materials cost plus administration fees and related costs. The collection term to related parties is 60~90 days after delivery and to third parties is receipt in advance or 30~120 days after
delivery.
ote d:
Selling price is based on normal price. The collection term to related parties is 70 days starting from the next month and to third parties is receipt in advance or 30~120 days after delivery.
Purchases
(sales)
(Note a)
Amount
% of total
Purchases
(sales)
Credit terms
Unit price
Credit period
Balance
% of total
accounts or
notes
receivable
(payable)
Delta Electronics
(Shanghai) Co.,
Ltd.
Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
5,113,627
$ 99.34
75 days
-
-
1,429,255
$ 91.22
DelSolar Co., Ltd. Delta Electronics
(Japan), Inc.
Affiliated
enterprise
Sales
1,179,912
23.00
75 days
-
(Note b)
558,031
59.00
DelSolar Co., Ltd. Delta Energy Systems
(Italy) s.r.l.
Associate
Sales
390,146
7.00
90~120 days
-
(Note b)
111,157
12.00
DelSolar Co., Ltd. Delta Greentech
(China) Co., Ltd.
Affiliated
enterprise
Sales
114,149
2.00
75 days
-
(Note b)
41,806
4.00
DelSolar
(Wujiang) Ltd.
DelSolar Co., Ltd.
Affiliated
enterprise
Sales
3,625,640
90.00
70 days
-
(Note b)
818,457
94.00
Cyntec Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
2,017,661
65.00
(Note c)
(Note c)
(Note c)
248,046
42.20
Cyntec Electronics
(Suzhou) Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,323,024
100.00
(Note c)
(Note c)
(Note c)
213,299
100.00
Cyntec (Suzhou)
Co., Ltd.
Cyntec International
Ltd.
Affiliated
enterprise
Sales
3,407,687
99.98
(Note c)
(Note c)
(Note c)
228,011
100.00
Cyntec
International Ltd.
Cyntec Co., Ltd.
Affiliated
enterprise
Sales
477,813
3.91
(Note c)
(Note c)
(Note c)
107,714
2.06
Cyntec
International Ltd.
Delta Electronics Int’l
(Singapore) Pte. Ltd.
Affiliated
enterprise
Sales
194,532
1.41
(Note d)
(Note d)
(Note d)
71,457
1.37
Note
Name of the
counterparty
Name of transaction
parties
Relationship
Note
Accounts or notes receivable
(payable)		 % of total
accounts or
notes
receivable
(payable)		 91.22 59.00 12.00 4.00 94.00 42.20 100.00 100.00 2.06 1.37
Balance 1,429,255
$		 558,031 111,157 41,806 818,457 248,046 213,299 228,011 107,714 71,457
Description of and reasons for
difference in transaction terms
compared to non-related party
transactions		 Credit period - (Note b) (Note b) (Note b) (Note b) (Note c) (Note c) (Note c) (Note c) (Note d)
Unit price - - - - - (Note c) (Note c) (Note c) (Note c) (Note d)
Transaction terms Credit terms 75 days 75 days 90~120 days 75 days 70 days (Note c) (Note c) (Note c) (Note c) (Note d)
% of total
Purchases
(sales)		 99.34 23.00 7.00 2.00 90.00 65.00 100.00 99.98 3.91 1.41
Amount 5,113,627
$		 1,179,912 390,146 114,149 3,625,640 2,017,661 3,323,024 3,407,687 477,813 194,532
Purchases
(sales)
(Note a)		 Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship Affiliated
enterprise		 Affiliated
enterprise		 Associate Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise		 Affiliated
enterprise
Name of transaction
parties		 Delta Greentech
(China) Co., Ltd.		 Delta Electronics
(Japan), Inc.		 Delta Energy Systems
(Italy) s.r.l.		 Delta Greentech
(China) Co., Ltd.		 DelSolar Co., Ltd. Cyntec International
Ltd.		 Cyntec International
Ltd.		 Cyntec International
Ltd.		 Cyntec Co., Ltd. Delta Electronics Int’l
(Singapore) Pte. Ltd.
Name of the
counterparty		 Delta Electronics
(Shanghai) Co.,
Ltd.		 DelSolar Co., Ltd. DelSolar Co., Ltd. DelSolar Co., Ltd. DelSolar
(Wujiang) Ltd.		 Cyntec Co., Ltd. Cyntec Electronics
(Suzhou) Co., Ltd.		 Cyntec (Suzhou)
Co., Ltd.		 Cyntec
International Ltd.		 Cyntec
International Ltd.

==> picture [596 x 105] intentionally omitted <==

Receivables from related parties in excess of $100,000 or 20% capital: Allowance for
doubtful
accounts
provided		 Allowance for
doubtful
accounts
provided		 $ - - - - - - - - - - - - - -
Subsequent
collections
(Note)		 $ 83,439 2,790,364 50,006 551,760 2,381,310 895,905 423,097 378,203 560,617 290,933 318,881 160,490 167,016 61,822
Overdue receivables Action adopted
for overdue
accounts		 - - - - - - - - - - - - - -
Amount $ - 195,297 - - - - 76 - 21 - - - - -
Turnover rate 3.84 3.99 3.94 6.48 6.33 10.47 7.74 14.25 8.22 2.83 12.23 4.91 10.73 3.80
Balance of
receivable from
related parties		 $ 197,411 3,960,453 133,523 823,348 2,588,236 895,905 423,097 378,203 560,617 337,131 318,881 219,978 167,016 106,253
Relationship Affiliated enterprise Affiliated enterprise Associate Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise
Transaction parties Delta Electronics (Japan), Inc. DEI Logistics (USA) Corp. Digital Projection Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co.,
Ltd.		 Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang)
Ltd.		 Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang)
Ltd.		 Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Japan), Inc. Delta Electronics International Ltd. Delta Networks (Dongguan) Ltd.
Name of creditor Delta Electronics Int'l Ltd. Delta Electronics Int'l Ltd. Delta Electronics Int'l Ltd. Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.

135

==> picture [596 x 105] intentionally omitted <==

Allowance for
doubtful
accounts
provided		 Allowance for
doubtful
accounts
provided		 $ - - - - - - - - - - - - - -
Subsequent
collections
(Note)		 $ 1,985,751 95,571 294,139 243,593 885,720 90,885 219,109 46,056 2,304,965 2,253,535 647,304 80,956 1,742,400 178,157
Overdue receivables Action adopted
for overdue
accounts		 - - - - - - - - - - - - - -
Amount $ - - - - - - - - - - - - - -
Turnover rate 3.22 4.84 6.71 3.84 0.31 0.10 0.41 0.28 0.33 11.88 14.70 8.99 0.61 1.85
Balance of
receivable from
related parties		 $ 6,591,606 145,979 309,119 260,334 1,094,543 160,099 865,391 132,466 2,304,965 3,011,455 706,884 102,307 2,655,312 273,853
Relationship Ultimate parent company Associate Associate Related party in substance Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise
Transaction parties Delta Electronics, Inc. Delta Energy Systems (Switzerland) AG Delta Greentech (USA) Corporation Delta Products Corporation Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Networks (Dongguan) Ltd. Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Networks (Dongguan) Ltd. DNI Logistic (USA) Corp. Delta Networks, Inc. (Taiwan) Delta Networks International Ltd. Delta Networks International Ltd.
Name of creditor Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics Int'l
(Singapore) Pte. Ltd.		 Delta Electronics
(Dongguan) Co., Ltd.		 Delta Electronics
(Dongguan) Co., Ltd.		 Delta Electronics Power
(Dongguan) Co., Ltd.		 Delta Electronics Power
(Dongguan) Co., Ltd.		 Delta Electronics Power
(Dongguan) Co., Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.		 Delta Networks
International Ltd.		 Delta Networks (Dongguan)
Ltd.		 Delta Networks, Inc.
(Taiwan)

==> picture [596 x 105] intentionally omitted <==

Allowance for
doubtful
accounts
provided		 Allowance for
doubtful
accounts
provided		 -
$		 - - - - - - - - - - - - -
Subsequent
collections
(Note)		 367,040
$		 4,089,658 169,672 841,873 117,811 303,712 790,052 375,100 278,474 318,437 108,464 1,384,818 559,437 319,549
Overdue receivables Action adopted
for overdue
accounts		 - - - - - - - - - - - - - -
Amount -
$		 - - - - - - - - - - - - -
Turnover rate 11.86 9.11 2.91 8.94 11.62 9.95 4.13 13.78 2.70 2.99 17.89 5.23 8.36 91.27
Balance of
receivable from
related parties		 367,040
$		 4,089,658 313,990 841,873 117,811 303,712 1,380,893 375,100 544,276 536,011 108,464 1,389,689 559,437 381,602
Relationship Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise
Transaction parties Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics (Wujiang) Trading Co.,
Ltd.		 Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics (Shanghai) Co., Ltd. Delta Electronics International Ltd. Delta Electronics (Wujiang) Trading Co.,
Ltd.		 Delta Greentech (China) Co., Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics (Chenzhou) Co., Ltd.
Name of creditor Delta Electronics (Jiangsu)
Ltd.		 Delta Electronics (Jiangsu)
Ltd.		 Delta Electronics (Jiangsu)
Ltd.		 Delta Electronics
Components (Wujiang) Ltd.		 Delta Electro-Optics
(Wujiang) Ltd.		 Delta Electro-Optics
(Wujiang) Ltd.		 Delta Electro-Optics
(Wujiang) Ltd.		 Delta Video Display System
(Wujiang) Ltd.		 Delta Video Display System
(Wujiang) Ltd.		 Delta Electronics (Wujiang)
Trading Co., Ltd.		 Delta Electronics (Wuhu)
Co., Ltd.		 Delta Electronics (Wuhu)
Co., Ltd.		 Delta Electronics
(Chenzhou) Co., Ltd.		 Chenzhou Delta Technology
Co., Ltd.

137

Allowance for
doubtful
accounts
provided		 $ - - - - - - - - - -
Subsequent
collections
(Note)		 $ 83,637 87,352 811,510 348,563 71,182 379,013 248,046 213,299 228,011 -
Overdue receivables Action adopted
for overdue
accounts		 - - - - - - - - - -
Amount $ - - - - - - - - - -
Turnover rate 4.91 6.01 6.10 3.84 3.85 10.18 9.50 13.60 12.55 4.87
Balance of
receivable from
related parties		 $ 126,540 135,960 1,429,255 558,031 111,157 818,457 248,046 213,299 228,011 107,714
Relationship Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise Affiliated enterprise
Transaction parties Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Electronics Int’l (Singapore) Pte.
Ltd.		 Delta Greentech (China) Co., Ltd. Delta Electronics (Japan), Inc. Delta Energy Systems (Italy) s.r.l. DelSolar Co., Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec Co., Ltd.
Name of creditor Delta Electronics (Japan),
Inc.		 Delta Green (Tianjin)
Industries Co., Ltd.		 Delta Electronics (Shanghai)
Co., Ltd.		 DelSolar Co., Ltd. DelSolar Co., Ltd. DelSolar (Wujiang) Ltd. Cyntec Co., Ltd. Cyntec (Suzhou) Co., Ltd. Cyntec Electronics (Suzhou)
Co., Ltd.		 Cyntec International Ltd.

==> picture [596 x 105] intentionally omitted <==

Contract period
Derivative transactions
Par value, contract amount or nominal principal (Note)		 A.
Delta Electronics Int’l (Singapore) Pte. Ltd. (A subsidiary of the Company)
Forward foreign currency contracts – Sell USD, buy RMB
USD
6,000
2012.11.21 ~ 2013.01.18
Forward foreign currency contracts – Sell USD, buy JPY
USD
10,800
2012.10.05 ~ 2013.03.14
Forward foreign currency contracts – Sell USD, buy EUR
EUR
1,400
2012.11.02 ~ 2013.03.14
Forward foreign currency contracts – Buy USD, sell EUR
EUR
1,900
2012.10.05 ~ 2013.04.29
Forward foreign currency contracts – Sell USD, buy CZK
CZK
36,500
2012.10.08 ~ 2013.01.23
Forward foreign currency contracts – Sell USD, buy SGD
SGD
6,379
2012.03.01 ~ 2013.07.11
The net loss recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $10,333.
B.
DelBio Inc. (A subsidiary of the Company)
Forward foreign currency contracts – Buy NTD, sell USD
USD
325
2012.10.09 ~ 2013.03.28
Forward foreign currency contracts – Buy NTD, sell EUR
EUR
16
2012.12.27 ~ 2013.02.27
Forward foreign currency contracts – Buy USD, sell EUR
EUR
37
2012.10.15 ~ 2013.02.07
The net gain recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $10.
C.
Delta Electronics International Ltd. (A subsidiary of DIH)
Forward foreign currency contracts – Buy USD, sell EUR
EUR
1,600
2012.12.05 ~ 2013.04.29
The net gain recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $246,817.
D.
Delta Electronics (Japan) Inc. (A subsidiary of DIH)
Forward foreign currency contracts – Buy USD, sell JPY
USD
1,000
2012.12.19 ~ 2013.02.26
E.
Delta Electronics (Dongguan) Co., Ltd. (A subsidiary of DHK)
The net gain recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $319.
The derivative financial instruments held by Delta Electronics (Dongguan) Co., Ltd. were all settled. The net loss recognized on forward foreign currency contracts for the year ended
December 31, 2012 amounted to $37,427.

139

Contract period
Derivative transactions
Par value, contract amount or nominal principal (Note)		 Contract period
Derivative transactions
Par value, contract amount or nominal principal (Note)		 Delta Electronics Power (Dongguan) Co., Ltd. (A subsidiary of DHK) Forward foreign currency contracts – Sell USD, buy RMB
USD
50,000
2012.11.01 ~ 2013.01.22		 Forward foreign currency contracts – Buy USD, sell RMB
USD
50,000
2012.11.01 ~ 2013.01.22		 The net loss recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $104,855 and the unrealized gain recognized on financial instruments under stockholders' equity amounted to $6,714 as these met all the criteria for hedge accounting. Delta Networks (Dongguan) Ltd. (A subsidiary of DNHK) Forward foreign currency contracts – Sell USD, buy RMB
USD
56,000
2012.01.18 ~ 2013.11.06		 Forward foreign currency contracts – Sell RMB, buy USD
USD
20,000
2012.06.01 ~ 2013.06.04		 The net gain recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $10,018 and the unrealized gain recognized on financial instruments under stockholders' equity amounted to $13,813 as these met all the criteria for hedge accounting. Delta Networks International Ltd. (A subsidiary of DNI Cayman) Forward foreign currency contracts – Sell USD, buy RMB
USD
10,000
2012.06.01 ~ 2013.06.04		 Forward foreign currency contracts – Sell RMB, buy USD
USD
10,000
2012.11.15 ~ 2013.06.04		 The net gain recognized on forward foreign currency contracts and foreign currency option contracts for the year ended December 31, 2012 amounted to $27,697 and the unrealized gain recognized on financial instruments under stockholders' equity amounted to $6,108 as these met all the criteria for hedge accounting. DelSolar Co., Ltd. (A subsidiary of the Company) Forward foreign currency contracts – Buy NTD, sell EUR
EUR
2,000
2012.11.07 ~ 2013.02.21		 The net gain recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $1,793. DelSolar (Wujiang) Co., Ltd. (A subsidiary of DSHK) The derivative financial instruments held by DelSolar Co., Ltd. were all settled. The net loss recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $2,620. Cyntec Co., Ltd. (A subsidiary of the Company) Forward foreign currency contracts – Sell USD, buy TWD
USD
12,000
2012.10.26 ~ 2013.02.20		 Forward foreign currency contracts – Sell EUR, buy TWD
USD
80
2012.11.16 ~ 2013.01.15		 The net gain recognized on forward foreign currency contracts for the year ended December 31, 2012 amounted to $1,006.
F. G. H. I. J. K.

==> picture [596 x 105] intentionally omitted <==

141

==> picture [596 x 105] intentionally omitted <==

A.Basic information Note Note (Note c) (Note d) (Note e) (Note f) - (Note g)
Investment
income (loss)
remitted back
as of December
31, 2012		 280,527
$		 - 638,880 390,181 - -
Ending balance
of investment		 4,056,534
$		 2,637,898 2,042,227 3,834,058 3,119,037 2,387,051
Investment
income (loss)
recognized by the
Company during
the year		 329,944
$		 479,112 504,340 810,669 645,094 265,750
Ownership held
by Company
(direct and
indirect)		 94.00 60.58 100.00 94.00 51.70 51.70
Accumulated
remittance as of
December 31,
2012		 1,952,388
$		 5,335,902 1,298,272 491,357 600,547 600,547
Remitted or collected
this period		 Collected -
$		 - - - - -
Remitted
out		 -
$		 - - - - -
Accumulated
remittance as of
January 1,
2012		 1,952,388
$		 5,335,902 1,298,272 491,357 600,547 600,547
Investment
method		 Invested by
DHK		 Invested by
DIH, Ace and
Drake		 Invested by
DNHK		 Invested by
DHK		 Invested by
DHK		 Invested by
DHK
Capital 2,840,402
$		 2,624,274 1,016,400 1,222,584 1,161,600 2,579,042
Main activities of
investee		 Manufacturing and
sales of transformers
and power supplies		 Manufacturing and
sales of
uninterruptible power
systems		 Manufacturing and
sales of other radio
transmission
apparatus
incorporating
reception apparatus
and other radio-
broadcast receivers,
combined with sound
recording or
reproducing apparatus		 Manufacturing and
sales of power
supplies		 Manufacturing and
sales of power
supplies		 Manufacturing and
sales of transformers
Name of investee in
Mainland China		 Delta Electronics
(Dongguan) Co., Ltd.		 Delta Greentech
(China) Co., Ltd.		 Delta Networks
(Dongguan) Ltd.		 Delta Electronics
Power (Dongguan)
Co., Ltd.		 Delta Electronics
(Jiangsu) Ltd.		 Delta Electronics
Components
(Wujiang) Ltd.

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Note Note (Note h) (Note i) (Note j) (Note k) (Note l) (Note m) (Note n)
Investment
income (loss)
remitted back
as of December
31, 2012		 51,234
$		 - - - - - -
Ending balance
of investment		 2,424,250
$		 934,067 3,680,197 3,581,812 71,976 2,162,668 2,078,632
Investment
income (loss)
recognized by the
Company during
the year		 600,548
$		 99,510 95,824 257,279 1,818 294,162 51,398)
(
Ownership held
by Company
(direct and
indirect)		 51.70 51.70 94.00 94.00 100.00 94.00 100.00
Accumulated
remittance as of
December 31,
2012		 375,342
$		 195,178 - 163,786 82,312 - 1,784,867
Remitted or collected
this period		 Collected -
$		 - - - - - -
Remitted
out		 -
$		 - - - - - 435,600
Accumulated
remittance as of
January 1,
2012		 375,342
$		 195,178 - 163,786 82,312 - 1,349,267
Investment
method		 Invested by
DHK		 Invested by
DHK		 Invested by
DHK		 Invested by
DHK		 Invested by
DNHK		 Invested by
DHK		 Invested by
CHK
Capital 842,160
$		 842,160 3,664,604 3,891,360 58,080 1,829,520 1,887,600
Main activities of
investee		 Manufacturing and
sales of peripherals
and electronic control
equipments		 Manufacturing and
sales of various
projectors		 Product design and
management
consulting service,
etc.		 Manufacturing and
sales of power
supplies and
transformers		 Design of computer
software		 Manufacturing and
sales of power
supplies and
transformers		 Research,
development,
manufacturing and
sales of new-type
electronic components
and wholesale, import
and export of similar
products
Name of investee in
Mainland China		 Delta Electro-Optics
(Wujiang) Ltd.		 Delta Video Display
System (Wujiang)
Ltd.		 Delta Electronics
(Shanghai) Co., Ltd.		 Delta Electronics
(Wuhu) Co., Ltd.		 Delta Networks
(Shanghai) Ltd.		 Delta Electronics
(Chenzhou) Co., Ltd.		 Cyntec (Suzhou) Co.,
Ltd.

143

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Note Note - (Note o) - (Note p) - (Note q)
Investment
income (loss)
remitted back
as of December
31, 2012		 $ - - - - - -
Ending balance
of investment		 2,161,858
$		 400,869 1,360,467 895,731 16 202,515
Investment
income (loss)
recognized by the
Company during
the year		 48,146
$		 1,790 164,064)
(		 7,561 - 129,207
Ownership held
by Company
(direct and
indirect)		 100.00 96.38 42.40 94.00 1.82 94.00
Accumulated
remittance as of
December 31,
2012		 1,655,280
$		 370,841 3,484,800 901,703 211 10,919
Remitted or collected
this period		 Collected -
$		 - - - - -
Remitted
out		 435,600
$		 - - - - -
Accumulated
remittance as of
January 1,
2012		 1,219,680
$		 370,841 3,484,800 901,703 211 10,919
Investment
method		 Invested by
CHK		 Invested by
PHK		 Invested by
DSHK		 Invested by
DHK		 Invested by
DP		 Invested by
DHK
Capital 1,655,280
$		 384,780 3,484,800 657,756 11,583 58,080
Main activities of
investee		 Research,
development,
manufacturing and
sales of new-type
electronic components
(chip components,
sensing elements,
hybrid integrated
circuits) and
wholesale, import and
export of similar
products		 Manufacturing and
sales of lenses and
optical engines for
projectors		 Manufacturing and
sales of solar batteries
and related systems		 Manufacturing and
sales of transformers
and bluetooth module		 Marketing and sales
of high-end cinema
projector systems		 Installation,
consulting and trading
of electronic products
Name of investee in
Mainland China		 Cyntec Electronics
(Suzhou) Co., Ltd.		 PreOptix (Jiangsu)
Co., Ltd.		 DelSolar (Wujiang)
Ltd.		 Delta Green
(Tianjin) Industries
Co., Ltd.		 DP Cinema Ltd. Delta Electronics
(Wujiang) Trading
Co., Ltd.

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Note Note - - (Note r) (Note r)
Investment
income (loss)
remitted back
as of December
31, 2012		 -
$		 - - -
Ending balance
of investment		 68,216
$		 3,296 140,818 205,113
Investment
income (loss)
recognized by the
Company during
the year		 813)
($		 17,322)
(		 321 81,706
Ownership held
by Company
(direct and
indirect)		 28.20 100.00 94.00 94.00
Accumulated
remittance as of
December 31,
2012		 61,420
$		 20,328 - -
Remitted or collected
this period		 Collected -
$		 - - -
Remitted
out		 -
$		 - - -
Accumulated
remittance as of
January 1,
2012		 61,420
$		 20,328 - -
Investment
method		 Invested by
Crystalrich
(HongKong)
Co., Ltd.		 Invested by
DNHK		 Invested by
DWH		 Invested by
DCZ
Capital 243,936
$		 20,328 136,296 117,815
Main activities of
investee		 Sales of other
lighting- emitting
diode and wafer		 Operation of radio
transmission
apparatus, and
automatic data
processing, reception,
conversion and
transmission or
regeneration of voice,
images or other data
of the machine,
including switches
and routers, with a
special program to
control a computer or
word processor with
memory business		 Manufacturing and
sales of transformers
and power supplies		 Manufacturing and
sales of transformers
and power supplies
Name of investee in
Mainland China		 Guangzhou
Crystalrich Lighting
Inc.		 Delta Networks
(Xiamen) Ltd.		 Wuhu Delta
Technology Co., Ltd.		 Chenzhou Delta
Technology Co., Ltd.

145

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Note Note (Note r) (Note r) (Note r)
Investment
income (loss)
remitted back
as of December
31, 2012		 -
$		 - -
Ending balance
of investment		 5,906
$		 26,058 15,027
Investment
income (loss)
recognized by the
Company during
the year		 300)
($		 494 55)
(
Ownership held
by Company
(direct and
indirect)		 63.92 94.00 81.31
Accumulated
remittance as of
December 31,
2012		 -
$		 - -
Remitted or collected
this period		 Collected -
$		 - -
Remitted
out		 -
$		 - -
Accumulated
remittance as of
January 1,
2012		 -
$		 - -
Investment
method		 Invested by
DPEC and
DGC		 Invested by
DPEC and
DDG		 Invested by
DPEC and
DDG
Capital 9,240
$		 27,721 18,481
Main activities of
investee		 Research and
development of
energy-saving
technology, energy-
saving equipment,
energy management
system and
technology consulting
service, etc.		 Research and
development of
energy-saving
technology, energy-
saving equipment,
energy management
system and
technology consulting
service, etc.		 Research and
development of
energy-saving
technology, energy-
saving equipment,
energy management
system and
technology consulting
service, etc.
Name of investee in
Mainland China		 Delta Energy
Technology
(Shanghai) Co., Ltd.		 Delta Energy
Technology
(Dongguan) Co., Ltd.		 Delta Energy
Technology
(Wujiang) Co., Ltd.

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Note Note (Note r) (Note r) Note a:
The capital was translated based on the currencies of capital certified report of the investee companies into New Taiwan Dollars at the average exchange rate of RMB 6.2855 to US$1 and RMB 4.6202 to NT$1.
Note b:
The accumulated remittance as of January 1, 2012, remitted or collected this period, accumulated remittance as of December 31, 2012 and investment income remitted back as of December 31, 2012 was translated
into New Taiwan Dollars at the average exchange rate of NTD 29.040 to US$1 at the balance sheet date.
Note c:
Except for the facility of US$67,231 permitted by Investment Commission, the capitalization of earnings of US$27,081 permitted by Investment Commission is excluded from the Company’s amount of investment
in Mainland China.
Note d:
Except for the facility of US$183,775 permitted by Investment Commission, the capitalization of earnings of US$980 permitted by Investment Commission is excluded from the Company’s amount of investment in
Mainland China.
Note e:
Except for the facility of US$47,056 permitted by Investment Commission, the capitalization of earnings of US$11,312 permitted by Investment Commission is excluded from the Company’s amount of investment
in Mainland China. Investment income of US$22,000 remitted back as December 31, 2012 had been granted for future reference by Investment Comission on August 3, 2012.
Note f:
Except for the facility of US$16,920 permitted by Investment Commission, the capitalization of earnings of US$22,654 permitted by Investment Commission is excluded from the Company’s amount of investment
in Mainland China.
Note g:
Except for the facility of US$20,680 permitted by Investment Commission, the capitalization of earnings of US$25,235 permitted by Investment Commission is excluded from the Company’s amount of investment
in Mainland China.
Note h:
Except for the facility of US$12,925 permitted by Investment Commission, the capitalization of earnings of US$2,068 permitted by Investment Commission is excluded from the Company’s amount of investment
Investment
income (loss)
remitted back
as of December
31, 2012		 -
$		 -
Ending balance
of investment		 8,686
$		 8,686
Investment
income (loss)
recognized by the
Company during
the year		 45)
($		 31)
(
Ownership held
by Company
(direct and
indirect)		 94.00 94.00
Accumulated
remittance as of
December 31,
2012		 -
$		 -
Remitted or collected
this period		 Collected -
$		 -
Remitted
out		 -
$		 -
Accumulated
remittance as of
January 1,
2012		 -
$		 -
Investment
method		 Invested by
DPEC and
DWH		 Invested by
DPEC and
DCZ
Capital 9,240
$		 9,240
Main activities of
investee		 Research and
development of
energy-saving
technology, energy-
saving equipment,
energy management
system and
technology consulting
service, etc.		 Research and
development of
energy-saving
technology, energy-
saving equipment,
energy management
system and
technology consulting
service, etc.
Name of investee in
Mainland China		 Delta Energy
Technology (Wuhu)
Co., Ltd.		 Delta Energy
Technology
(Chenzhou) Co., Ltd.

147

in Mainland China. Note i:
Except for the facility of US$6,721 permitted by Investment Commission, the capitalization of earnings of US$8,272 permitted by Investment Commission is excluded from the Company’s amount of investment in		 Mainland China. Note j:
The original capitalization of earnings permitted by Investment Commission is US $112,800, except for the exchange difference of US$ 2,399.23 between the revocation of investment permitted by Investment		 Commission and the implementation of investment, the capitalization of earnings of US$ 110,400.77 permitted by Investment Commission is excluded from the company's amount of investment in Mainland China. Note k:
Except for the facility of US$5,640 permitted by Investment Commission, the capitalization of earnings of US$120,320 permitted by Investment Commission is excluded from the Company’s amount of investment		 in Mainland China. Note l:
Except for the facility of US$2,834 permitted by Investment Commission, the capitalization of earnings of US$298 permitted by Investment Commission is excluded from the Company’s amount of investment in		 Mainland China. Note m: The capitalization of earnings of US$59,220 is excluded from the Company’s amount of investment in Mainland China. Note n:
Except for the facility of US$61,462 permitted by Investment Commission, the capitalization of earnings of US$4,000 permitted by Investment Commission is excluded from the Company’s amount of investment		 in Mainland China. Note o:
Except for the facility of US$7,520 permitted by Investment Commission, the investment of US$5,250 by PreOptix Co., Ltd. was permitted by Investment Commission.		 Note p:
Except for the facility of US$31,050 permitted by Investment Commission, the capitalization of earnings of US$265 permitted by Investment Commission is excluded from the Company’s amount of investment in		 Mainland China. Note q:
Except for the facility of US$376 permitted by Investment Commission, the capitalization of earnings of US$1,504 permitted by Investment Commission is excluded from the Company’s amount of investment in		 Mainland China. Note r:
Wuhu Delta Technology Co., Ltd., Chenzhou Delta Technology Co., Ltd., Delta Energy Technology (Shanghai) Co., Ltd., Delta Energy Technology (Dongguan) Co., Ltd., Delta Energy Technology (Wujiang) Co.,		 Ltd., Delta Energy Technology (Wuhu) Co., Ltd., and Delta Energy Technology (Chenzhou) Co., Ltd. are the investee companies of the Company’s investee companies in Mainland China. According to the regulations of the Investment Commission, the reinvestment of the investee companies in Mainland China is not required to obtain the approval of the Investment Commission; thus the investment amounts in Wuhu Delta Technology Co., Ltd., Chenzhou Delta Technology Co., Ltd., Delta Energy Technology (Shanghai) Co., Ltd., Delta Energy Technology (Dongguan) Co., Ltd., Delta Energy Technology (Wujiang) Co., Ltd., Delta Energy Technology (Wuhu) Co., Ltd., and Delta Energy Technology (Chenzhou) Co., Ltd. and are excluded from the calculation of the Company’s ceiling of investment amount in Mainland China. Note s:
Delta Networks (Wujiang) Ltd., an indirect investment of the Company, was liquidated on June 30, 2011. The Company’s indirect investment and earnings turned into investment in Delta Networks (Wujiang) Ltd.,		 originally approved by the Investment Commission of MOEA, were US$17,389 and US$10,802, respectively. Note t:
Except for DP Cinema Ltd. in which the company holds less than 20% of the investee company’s voting shares and has no significant influence on the investee’s operational decisions, the Company recognized		 investment income/loss through DIH, DNH, PHK, DelSolar and Cyntec based on the audited financial statements.
B. The ceiling amount of investment in Mainland China (Units in thousands of currencies indicated) Name of investor
Accumulated amount remitted out
of Taiwan to Mainland China
Investment amount approved
by the Investment Commission
Ceiling of investment amount
of the Company		 Delta Electronics, Inc. (Notes b and c)
11,088,752
$ 11,546,925
$ -
$		 DelSolar Co., Ltd. (Note d)
3,484,800
3,484,800
3,381,285		 Cyntec Co., Ltd. (Note c)
3,440,147
3,440,147
-		 Note a:
The accumulated amount remitted out of Taiwan to Mainland China and investment amount approved by the investment commission was translated into New Taiwan Dollars at the average exchange rate of NTD		 29.040 to US$1 at the balance sheet date. Note b:
The investment income of US$22,000, US$18,000, US$10,509 and US$14,351 were remitted back on January 12, 2012, June 26, 2012, August 15, 2012, June 24, 2009 and December 29, 2005, respectively, from		 the investee companies in Mainland China and was permitted by Investment Commission on August 3, 2012, August 29, 2012, July 17, 2009 and January 6, 2006, respectively, which are deductible from the Company’s accumulated amount remitted out of Taiwan to Mainland China. Note c:
According to “Regulation Governing the Approval of Investment or Technical Cooperation in Mainland China”, the Company and Cyntec Co., Ltd. obtained the approval of operation head quarters from Industrial		 Development Bureau of Ministry of Economic Affairs. There is no ceiling of investment amount. Note d:
The last application to Investment Commission was in the first quarter of 2010. Ceiling of investment amount was $5,759,220 computed according to the financial statements at that time. Therefore, it does not		 exceed the limit. C. The significant direct and indirect transactions of the Company with the investee companies in Mainland China: The significant transactions directly between the Company and the investee companies for the year ended December 31, 2012 are described in Note 5. The significant purchases, sales, accounts payable and accounts receivable are directly conducted with DelSolar Co., Ltd. through DelSolar (Wujiang) Ltd. as well as those that the Company indirectly conducted with investee companies in Mainland China through the DIH’s subsidiaries, Delta Electronics International Ltd. (DEIL-Lubuan), Delta Electronics Int’l (Singapore) Pte. Ltd. (DEIL-SG), Delta Networks International Ltd. (DNIL-Labuan), Cyntec International Ltd. (CIL-Labuan), for the year ended December 31, 2012 are shown in Note 11.(2)H.

149

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(4)Relationship and significant transactions between the Company and its subsidiaries
For the year ended December 31, 2012:		 Percentage of
total combined revenue
or total assets (Note c)		 1.17 3.04 0.09 0.09 0.17 0.14 0.37 8.59 4.11 12.13 7.85 1.87 2.15 2.64 0.73 0.09 2.02
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note i)		 2,005,168
$		 5,223,090 148,475 161,299 299,881 236,200 634,394 14,751,352 7,064,768 20,835,023 13,491,324 3,219,022 3,685,170 4,541,214 1,257,864 156,369 3,475,624
Subject Services revenue Services revenue Services revenue Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Electronics International Ltd. Delta Electronics Int'l (Singapore) Pte. Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Greentech (China) Co., Ltd. DelSolar (Wujiang) Ltd. DEI Logistics (USA) Corp. Delta Electronics (Japan), Inc. DEI Logistics (USA) Corp. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd. Delta Electronics (Wuhu) Co., Ltd.

Name of counterparty		 Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd.

Number
(Note a)		 0 0 0 0 0 0 1 1 2 2 2 2 2 2 2 2 2

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Percentage of
total combined revenue
or total assets (Note c)		 0.08 0.47 1.39 0.12 0.23 0.13 0.13 11.96 0.38 4.55 4.36 0.32 10.45 7.73 1.89 0.33 0.25 8.52
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note i)		 132,844
$		 805,927 2,392,048 203,601 401,148 230,626 226,623 20,536,679 660,967 7,820,141 7,484,655 544,280 17,944,599 13,280,309 3,245,963 573,141 434,476 14,627,257
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 3 3 3 3 3 3 3 2 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Wuhu Delta Technology Co., Ltd. Delta Electronics (Japan), Inc. Delta Electronics International Ltd. PreOptix (Jiangsu) Co., Ltd. Delta Networks (Dongguan) Ltd. Delta Green (Tianjin) Industries Co., Ltd. Deltronics (Netherlands) B.V. Delta Electronics, Inc. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Networks (Dongguan) Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Networks (Dongguan) Ltd. DNI Logistic (USA) Corp. Ayecom Technology Co., Ltd. Delta Networks, Inc. (Taiwan) Delta Networks International Ltd.
Name of counterparty Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks (Dongguan) Ltd.
Number
(Note a)		 2 2 2 2 2 2 2 2 3 3 4 4 4 5 5 5 5 6

151

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Percentage of
total combined revenue
or total assets (Note c)		 0.53 0.12 2.82 16.69 0.55 3.36 0.85 1.30 2.74 3.01 0.79 0.82 1.07 3.79 0.26 3.04 1.47 0.25
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note i)		 909,743
$		 207,011 4,848,970 28,673,609 944,492 5,774,149 1,456,860 2,226,505 4,711,692 5,168,789 1,364,872 1,402,559 1,842,260 6,507,900 440,983 5,216,871 2,521,459 421,708
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Networks International Ltd. Delta Networks International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Shanghai) Co., Ltd. Delta Electronics International Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd.
Name of counterparty Delta Networks, Inc. (Taiwan) Ayecom Technology Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Wuhu Delta Technology Co., Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd. PreOptix (Jiangsu) Co., Ltd.
Number
(Note a)		 7 8 9 9 9 10 11 11 11 12 12 13 14 14 15 16 17 18

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Percentage of
total combined revenue
or total assets (Note c)		 0.25 0.30 2.98 0.69 0.07 2.11 0.28 0.11 1.17 1.93 1.98 0.16 0.16 0.58 0.20 0.11 2.31
Transaction
terms		 (Note d) (Note d) (Note e) (Note d) (Note e) (Note f) (Note g) (Note f) (Note g) (Note g) (Note g) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note i)		 434,942
$		 519,648 5,110,064 1,179,912 114,149 3,625,640 477,813 194,532 2,017,661 3,323,024 3,407,687 280,000 275,413 996,239 336,057 197,411 3,960,453
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Other receivables Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 1 1 1 1 3 3
Name of transaction parties Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics (Japan), Inc. Delta Greentech (China) Co., Ltd. DelSolar Co., Ltd. Cyntec Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. DelSolar Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics (Japan), Inc. DEI Logistics (USA) Corp.
Name of counterparty Delta Electronics (Japan), Inc. Delta Green (Tianjin) Industries Co., Ltd. Delta Electronics (Shanghai) Co., Ltd. DelSolar Co., Ltd. DelSolar Co., Ltd. DelSolar (Wujiang) Ltd. Cyntec International Ltd Cyntec International Ltd. Cyntec Co., Ltd. Cyntec (Suzhou) Co., Ltd. Cyntec Electronics (Suzhou) Co., Ltd. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics International Ltd. Delta Electronics International Ltd.
Number
(Note a)		 19 20 21 22 22 23 24 24 25 26 27 0 0 0 0 1 1

153

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Percentage of
total combined revenue
or total assets (Note c)		 0.48 1.51 0.52 0.25 0.22 0.33 0.20 0.19 0.13 0.10 0.06 3.62 0.60 0.09 0.48 0.07 1.27 1.66
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note i)		 823,348
$		 2,588,236 895,905 423,097 378,203 560,617 337,131 318,881 219,978 167,016 106,253 6,591,606 1,094,543 160,099 865,391 132,466 2,304,965 3,011,455
Subject Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 2 3 3 3 3 3 3
Name of transaction parties Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Japan), Inc. Delta Electronics International Ltd. Delta Networks (Dongguan) Ltd. Delta Electronics, Inc. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Networks (Dongguan) Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Networks (Dongguan) Ltd.
Name of counterparty Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Networks International Ltd.
Number
(Note a)		 2 2 2 2 2 2 2 2 2 2 2 2 3 3 4 4 4 5

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Percentage of
total combined revenue
or total assets (Note c)		 0.39 0.06 1.46 0.15 0.20 2.25 0.17 0.46 0.17 0.76 0.06 0.21 0.30 0.29 0.76 0.06 0.31 0.21
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e) (Note d) (Note d) (Note d) (Note d)
Amount
(Note i)		 706,884
$		 102,307 2,655,312 273,853 367,040 4,089,658 313,990 841,873 303,712 1,380,893 117,811 375,100 544,276 536,011 1,389,689 108,464 559,437 381,602
Subject Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties DNI Logistic (USA) Corp. Delta Networks Inc. (Taiwan) Delta Networks International Ltd. Delta Networks International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Shanghai) Co., Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Chenzhou) Co., Ltd.
Name of counterparty Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks (Dongguan) Ltd. Delta Networks, Inc. (Taiwan) Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd.
Number
(Note a)		 5 5 6 7 9 9 9 10 11 11 11 12 12 13 14 14 16 17

155

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Percentage of
total combined revenue
or total assets (Note c)		 0.07 0.07 0.79 0.31 0.45 0.14 0.12 0.13 0.06 0.89 0.07 0.25 Note a:
The transaction information of the Company and the consolidated subsidiaries should be noted in column “Number”. The number means:
1. Number 0 represents the Company.
2. The consolidated subsidiaries are in order from number 1.
Note b:
The relationships with the transaction parties are as follows:
1. The Company to the consolidated subsidiary.
2. The consolidated subsidiary to the Company.
3. The consolidated subsidiary to another consolidated subsidiary.
Note c:
Ratios of asset/liability are divided by consolidated total assets, and ratios of gain/loss accounts are divided by consolidated sales revenue.
Note d:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 75 days.
Note e:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 90 days.
Note f:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 70 days.
Note g:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 60~90 days.
Transaction
terms		 (Note d) (Note d) (Note e) (Note d) (Note f) (Note g) (Note g) (Note g) (Note g) (Note h) (Note h) (Note h)
Amount
(Note i)		 126,540
$		 135,960 1,429,255 558,031 818,457 248,046 213,299 228,011 107,714 1,610,607 134,731 451,190
Subject Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Asset leased to others Asset leased to others Asset leased to others
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 1 1 3
Name of transaction parties Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics (Japan), Inc. DelSolar Co., Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec Co., Ltd. Delta Networks, Inc. (Taiwan) DelBio Inc. DelSolar (Wujiang) Ltd.
Name of counterparty Delta Electronics (Japan), Inc. Delta Green (Tianjin) Industries Co., Ltd. Delta Electronics (Shanghai) Co., Ltd. DelSolar Co., Ltd. DelSolar (Wujiang) Ltd. Cyntec Co., Ltd. Cyntec (Suzhou) Co., Ltd. Cyntec Electronics (Suzhou) Co., Ltd. Cyntec International Ltd. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics (Jiangsu) Ltd.
Number
(Note a)		 19 20 21 22 23 25 26 27 24 0 0 3

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Note h:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and charge the rental monthly.
Note i:
Only related party transactions in excess of $100,000 are disclosed.
For the year ended December 31, 2011:		 Percentage of
total combined revenue
or total assets (Note c)		 1.63 2.06 0.11 0.17 0.15 0.98 2.87 2.66 0.46 0.70 0.54 0.23 0.16 0.45
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note j)		 2,650,863
$		 3,340,686 181,210 272,628 245,140 1,586,644 4,660,587 4,322,062 740,002 1,145,176 877,743 367,741 254,489 739,227
Subject Services revenue Services revenue Services revenue Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 1 1 1 1 1 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electro-Optics (Wujiang) Ltd. DelSolar (Wujiang) Co., Ltd. DEI Logistics (USA) Corp. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd. Delta Electronics (Wuhu) Co., Ltd.

Name of counterparty		 Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd.

Number
(Note a)		 0 0 0 0 0 1 1 1 1 1 1 1 1 1

157

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Percentage of
total combined revenue
or total assets (Note c)		 0.44 8.39 1.20 2.38 3.59 10.21 7.05 1.41 1.72 2.45 0.66 0.22 1.81 0.20 0.29 2.06 0.12
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note j)		 722,075
$		 13,630,105 1,952,488 3,861,360 5,831,944 16,585,480 11,456,994 2,298,885 2,792,292 3,986,608 1,080,417 357,230 2,944,013 323,415 473,580 3,347,431 202,328
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 3 3 3 2 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Electronics (Japan), Inc. DEI Logistics (USA) Corp. Delta Electronics Int'l (Singapore) Pte. Ltd. Delta Electronics, Inc. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Wuhu Delta Technology Co., Ltd. Delta Electronics (Japan), Inc. Delta Electronics International Ltd. PreOptix (Jiangsu) Co., Ltd.
Name of counterparty Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd.
Number
(Note a)		 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2

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Percentage of
total combined revenue
or total assets (Note c)		 0.13 0.09 0.15 9.75 0.12 0.09 0.08 6.29 10.07 0.28 1.65 3.53 0.00 8.06 1.67 0.32 0.27
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note j)		 204,974
$		 144,511 237,465 15,835,939 196,867 138,686 124,332 10,212,240 16,354,405 458,944 2,682,408 5,740,303 240,324 13,100,086 2,709,029 527,947 446,769
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 3 3 3 2 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Networks (Dongguan) Ltd. Deltronics (Netherlands) B.V. Delta Green (Tianjin) Industries Co., Ltd. Delta Electronics, Inc. Delta Video Display System (Wujiang) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Networks (Dongguan) Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Networks (Dongguan) Ltd. DNI Logistics (USA) Corp. Ayecom Technology Co., Ltd. Delta Networks, Inc. (Taiwan)
Name of counterparty Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Japan), Inc. Delta Electronics (Japan), Inc. Delta Electronics (Japan), Inc. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks International Ltd.
Number
(Note a)		 2 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6 6

159

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Percentage of
total combined revenue
or total assets (Note c)		 8.78 0.44 0.14 6.72 12.59 0.16 0.57 2.40 0.95 0.40 0.79 0.92 2.29 0.05 2.83 0.32 0.09 0.20
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e) (Note e) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e) (Note e)
Amount
(Note j)		 14,264,698
$		 851,273 271,735 12,978,045 24,331,358 306,954 1,102,704 4,643,782 1,837,424 774,832 1,527,879 1,786,664 4,419,842 105,275 5,471,081 614,361 171,312 377,558
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Greentech (China) Co., Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Shanghai) Co., Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics International Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Greentech (China) Co., Ltd. Delta Greentech (China) Co., Ltd.
Name of counterparty Delta Networks (Dongguan) Ltd. Delta Networks, Inc. (Taiwan) Ayecom Technology Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Wujiang) Trading Co., Ltd.
Number
(Note a)		 7 8 9 10 10 10 10 11 11 11 11 12 12 12 13 13 13 14

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Percentage of
total combined revenue
or total assets (Note c)		 1.62 0.35 2.48 0.31 0.65 2.19 1.50 0.23 0.48 2.98 0.21 0.85 1.05 1.33 0.24 0.15 0.16
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e) (Note f) (Note g) (Note h) (Note h) (Note h) (Note d) (Note d) (Note d)
Amount
(Note j)		 3,136,927
$		 669,676 4,781,840 596,460 1,253,615 4,236,474 2,904,410 443,833 924,101 5,752,000 402,553 1,650,108 2,019,775 2,561,075 466,065 289,723 303,362
Subject Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Other receivables
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 1
Name of transaction parties Delta Electronics International Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics (Chenzhou) Co., Ltd. Delta Greentech (China) Co., Ltd. DelSolar Co., Ltd. Cyntec Co., Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics International Ltd.
Name of counterparty Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Wuhu Delta Technology Co., Ltd. Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd. PreOptix (Jiangsu) Co., Ltd. Delta Electronics (Shanghai) Co., Ltd. DelSolar (Wujiang) Ltd. Cyntec International Ltd. Cyntec Co., Ltd. Cyntec (Suzhou) Co., Ltd. Cyntec Electronics (Suzhou) Co., Ltd. Delta Green (Tianjin) Industries Co., Ltd. Delta Green (Tianjin) Industries Co., Ltd. Delta Electronics, Inc.
Number
(Note a)		 15 15 15 16 17 17 18 19 20 21 22 23 24 25 26 26 0

161

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Percentage of
total combined revenue
or total assets (Note c)		 0.39 0.09 0.07 1.78 0.15 0.71 2.09 0.88 0.21 0.07 0.28 0.29 0.07 0.13 0.07 0.06 0.07
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d)
Amount
(Note j)		 753,852
$		 179,608 132,203 3,444,273 282,224 1,374,106 4,040,955 1,703,737 409,919 135,179 547,099 559,237 137,707 249,537 129,745 106,641 125,866
Subject Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable
Relationship
(Note b)		 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Electronics (Japan) Co., Ltd. DEI Logistics (USA) Corporation Delta Electronics International Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Chenzhou) Co., Ltd. Chenzhou Delta Technology Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Wuhu Delta Technology Co., Ltd. Delta Electronics (Japan), Inc. Delta Green (Tianjin) Industries Co., Ltd.
Name of counterparty Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd.
Number
(Note a)		 0 0 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2

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Percentage of
total combined revenue
or total assets (Note c)		 3.18 0.05 0.11 1.85 0.62 0.06 0.12 0.87 1.53 0.24 0.10 1.23 0.05 0.24 1.14 0.18 0.10
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e)
Amount
(Note j)		 6,140,150
$		 101,477 214,401 3,566,355 1,194,480 125,060 223,230 1,681,759 2,948,263 470,689 193,388 2,371,754 104,968 457,017 2,198,722 338,180 187,573
Subject Accounts receivable Other receivables Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable
Relationship
(Note b)		 2 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
Name of transaction parties Delta Electronics, Inc. Delta Electronics, Inc. Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics International Ltd. Delta Networks (Dongguan) Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Networks (Dogguan) Ltd. DNI Logistics (USA) Corp. Ayecom Technology Co., Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Greentech (China) Co., Ltd.
Name of counterparty Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Chenzhou Delta Technology Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics Power (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Electronics (Dongguan) Co., Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks International Ltd. Delta Networks (Dogguan) Ltd. Delta Networks, Inc. (Taiwan) Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electronics (Jiangsu) Ltd. Delta Electro-Optics (Wujiang) Ltd.
Number
(Note a)		 2 2 18 4 4 4 5 5 6 6 6 7 8 10 10 10 11

163

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Percentage of
total combined revenue
or total assets (Note c)		 0.07 0.07 0.47 0.23 0.24 0.20 0.21 0.57 0.36 0.56 0.07 0.46 0.09 0.14 0.16 0.30 0.08
Transaction
terms		 (Note d) (Note d) (Note d) (Note d) (Note d) (Note d) (Note e) (Note d) (Note d) (Note e) (Note d) (Note f) (Note h) (Note h) (Note h) (Note i) (Note i)
Amount
(Note j)		 134,484
$		 143,143 903,371 449,286 469,986 378,942 403,736 1,105,639 688,928 1,075,386 134,280 893,615 176,852 275,446 315,101 572,003 149,271
Subject Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Assets leased to others Assets leased to others
Relationship
(Note b)		 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 1 1
Name of transaction parties Delta Electronics International Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Shanghai) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Electronics International Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. Delta Greentech (China) Co., Ltd. Delta Electronics Int’l (Singapore) Pte. Ltd. DelSolar Co., Ltd. Cyntec International Ltd. Cyntec International Ltd. Cyntec International Ltd. Delta Networks, Inc. (Taiwan) DelBio Inc.
Name of counterparty Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electro-Optics (Wujiang) Ltd. Delta Electronics Components (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Video Display System (Wujiang) Ltd. Delta Electronics (Wujiang) Trading Co., Ltd. Delta Electronics (Wuhu) Co., Ltd. Delta Electronics (Chenzhou) Co., Ltd. Delta Electronics (Shanghai) Co., Ltd. Delta Green (Tianjin) Industries Co., Ltd. DelSolar (Wujiang) Ltd. Cyntec Co., Ltd. Cyntec (Suzhou) Co., Ltd. Cyntec Electronics (Suzhou) Co., Ltd. Delta Electronics, Inc. Delta Electronics, Inc.
Number
(Note a)		 11 11 11 12 13 13 14 15 17 20 26 21 23 24 25 0 0

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Percentage of
total combined revenue
or total assets (Note c)		 0.27 Note a:
The transaction information of the Company and the consolidated subsidiaries should be noted in column “Number”.
The number means:
1. Number 0 represents the Company.
2. The consolidated subsidiaries are in order from number 1.
Note b:
The relationships with the transaction parties are as follows:
1. The Company to the consolidated subsidiary.
2. The consolidated subsidiary to the Company.
3. The consolidated subsidiary to another consolidated subsidiary.
Note c:
Ratios of asset/liability are divided by consolidated total assets, and ratios of gain/loss accounts are divided by consolidated sales revenue.
Note d:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 75 days.
Note e:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 90 days.
Note f:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 30 days.
Note g:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 60~90 days.
Note h:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and all the credit terms are 45~120 days.
Note i:
There is no similar transaction to compare with. It will follow the agreed price and transaction terms and charge the rental monthly.
Note j:
Only related party transactions in excess of $100,000 are disclosed.
Transaction
terms		 (Note i)
Amount
(Note j)		 517,098
$
Subject Assets leased to others
Relationship
(Note b)		 3
Name of transaction parties DelSolar (Wujiang) Ltd.
Name of counterparty Delta Electronics (Jiangsu) Ltd.
Number
(Note a)		 10

165

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11.
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12. OPERATING SEGMENT INFORMATION

(1) General information

The Group considers the business from a product perspective. The Group’s business is segregated into power electronics business, energy management business and smart green life business. Breakdown of the revenue from all sources is as follows:

  • A. Power electronics business:

Design, manufacture, and sales of power supplies applied to computers, office automation equipment, consumer electronic products and auto electronic products and design, manufacture, and sales of electronic components applied to computers, information, communication, household electric appliances, consumer electronic products and automobiles. The main products are Server power supply, Workstation power supply, Desktop power supply, Notebook power supply, High Efficiency Electronic Lighting Ballast, LED Power, Display Power Supply, Gaming Power supply, Industrial power, Medical power supplies, Magnetic component, EMI filters, Precision Motors, Fans and Fans Module, Cooling Module, Blower, Mini Wind Energy Shell Parts, Heat Exchanger, RF/wireless component, Bluetooth Module, Optical Transceiver Module, Networking Component, etc.

  • B. Energy management business:

  • Design, manufacture, and sales of power supplies/converters and electromechanical products applied to communication, information, network and renewable energy. The main products are Telecom and Industrial Power System, Uninterruptible Power Supplies (UPS), precision cooling, Photovoltaic Inverter (PIV), converter for wind energy, Medium Voltage Drive, electric vehicle charging station, Programmable Logic Controllers, AC Motor Drives, AC Servo Motors and Drives, Brushless DC Motors and Drives, Human Machine Interfaces, Temperature Controllers, Encoders, machine vision system, computed numerically controllers, etc.

  • C. Smart green life business:

  • Design, manufacture, and sales of projectors, LED lighting products, Integrated solutions and Services, interactive speech recognition system. The main products are professional high end digital projectors, digital electronic cinema, home cinema projectors, video conference projection systems, digital signage display, educational use and portable digital projectors, game use projectors, digital display wall, video system integrated solution, rent service for high projection, professional LED lamps, LED indoor light, LED component and module, New light engine, LED driver module and optical component, LED control system, Design and construction of lighting application, green energy integration design and architecture, development automatic speech outbound, Interactive voice response, voice keyword spotting solution, Speech Analysis Automation, voice biometrics with language technology, etc. The Group changed the classification of certain product categories during this year, which

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resulted to the change in the reportable operation segments compared to the prior year.

The segment-related information in prior year has been restated to conform with the information presented for this year.

(2) Measurement of segment information

The Group’s segment profit (loss) is measured with the operating profit (loss) before tax, which is used as a basis for the Group assessing the performance of the operating segments. The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 2.

167

Information on segment profit (loss) and assets The segment information provided to the chief operating decision-maker for the reportable segments for the years ended December 31, 2012 and 2011 is as follows: For the year ended December 31, 2012 Power electronics
Energy management
Smart green life		 business
business
business
Total		 Revenue from external customers
106,665,243
$ 29,665,288
$ 30,083,691
$ 166,414,222
$		 Measurement amount of segment profit (Loss)
14,333,174
$ 4,176,238
$ 1,687,096
$ 20,196,508
$		 Segment’s total assets (Note A)
-
$ -
$ -
$ -
$		 For the year ended December 31, 2011 Power electronics
Energy management
Smart green life		 business
business
business
Total		 Revenue from external customers (Note B)
107,145,444
$ 23,872,947
$ 28,005,413
$ 159,023,804
$		 Measurement amount of segment profit (Loss) (Note B)
12,154,849
$ 2,876,539
$ 985,694
$ 16,017,082
$		 Segment’s total assets (Note A)
-
$ -
$ -
$ -
$		 Note A：According to EITF 99-151, “Explanation for Segment Reporting”, of the R.O.C. Accounting Research and Development Foundation, dated June 28, 2010, enterprises should disclose the measurement amount of reportable segments assets in accordance with paragraph 24 of R.O.C. SFAS No. 41, “Operating Segments”.
As the Company did not provide the measurement amount of assets to the chief operating		 decision-maker, the measurement amount of assets that should be disclosed is $0. Note B：Have been restated in accordance with regulations for comparative purposes.

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(4) Reconciliation information for segment profit (loss)

  • A. The revenue from external parties reported to the chief operating decision-maker is measured in a manner consistent with that in the income statement.

  • B. A reconciliation of reportable segments profit (loss) to profit (loss) before tax and discontinued operations is provided as follows:

For the years ended December 31,

2012 2011
(As restated)
Reportable segments' profit $ 20,196,508 $ 16,017,082
Other segments’ loss ( 2,844,519) ( 2,855,421)
Non-operating income 6,057,920 4,932,337
Non-operating expenses ( 903,572) ( 672,666)
Profit before tax and discontinued operations $ 22,506,337 $ 17,421,332
  • C. The amount of assets was not provided to the chief operating decision-maker in accordance with EITF 99-151, “Explanation for Segment Reporing”, of the R.O.C. Accounting Research and Development Foundation dated June 28, 2010. The measurement amount of assets that should be disclosed is $0 and the reconciliation is provided as follows:
Reportable segments' assets
Unallocated items:
Current assets
Funds and investments
Property, plant and equipment
Intangible assets
Other assets
Total assets		 December 31, December 31,
2012
-
$ 121,889,748
10,765,590
34,908,430
11,733,212
2,591,617
181,888,597
$		 2011
-
$ 130,007,582
12,129,644
36,917,785
12,096,932
2,042,036
193,193,979
$

(5) Information about products and services

As the Group considered the business from a product perspective, the reportable segments were based on different products and services. Revenues from external customers are the same as in Note 12(3).

169

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(6) Information about geographic areas

Information about geographic areas for the years ended December 31, 2012 and 2011 were as follows:

Taiwan
USA
Mainland China
Others
Total		 Non-current
Revenue
assets
1,683,574
$ 20,455,758
$ 24,033,673
-
99,426,994
27,831,876
46,615,683
945,625
171,759,924
$ 49,233,259
$ 2012		 2011 2011
Revenue
1,683,574
$ 24,033,673
99,426,994
46,615,683
171,759,924
$		 Revenue
2,563,292
$ 21,946,836
95,566,385
42,397,826
162,474,339
$		 Non-current
assets
21,217,061
$ 185,569
28,701,888
952,235
51,056,753
$

(7) Information about major customers

There are no customers accounting for more than 10% of the Group’s operating revenues for the years ended December 31, 2012 and 2011.

13. DISCLOSURES RELATING TO THE ADOPTION OF IFRSs

Pursuant to the regulations of the former Financial Supervisory Commission, Executive Yuan, R.O.C. (FSC) effective January 1, 2013, a public company whose stock is listed on the Taiwan Stock Exchange Corporation or traded in the GreTai Securities Market should prepare financial statements in accordance with the International Financial Reporting Standards, International Accounting Standards, and relevant interpretations and interpretative bulletins that are ratified by FSC (together referred to as IFRSs).

The Company discloses the following information in advance prior to the adoption of IFRSs under the requirements of Jin-Guan-Zheng-Shen-Zi Order No. 0990004943 of FSC, dated February 2, 2010:

(1) Major contents and status of execution of the Company’s plan for IFRSs adoption:

The Company has established the IFRSs taskforce headed by the Company’s chief financial officer, which is responsible for setting up a plan relative to the Company’s transition to IFRSs. The major contents and status of execution of this plan are outlined below:

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Working Items for IFRSs Adoption Status of Execution
1. Formation of an IFRSs group Completed
2. Setting up a plan relative to the Group's transition to IFRSs Completed
3. Identification of the differences between current accounting
policies and IFRSs		 Completed
4. Identification of consolidated entities under IFRSs framework Completed
5. Evaluation of the impact of each exemption and option on the
Company under IFRS 1 - First-time Adoption of International
Financial Reporting Standards		 Completed
6. Evaluation of needed information system adjustments Completed
7. Evaluation of needed internal controls adjustments Completed
8. Establish IFRSs accounting policies Completed
9. Selection of exemptions and options available under IFRS 1 -
First-time Adoption of International Financial Reporting
Standards		 Completed
10. Preparation of statement of financial position on the date of
transition to IFRSs		 Completed
11.1. Preparation of comparative financial information under
IFRSs for the firstquarter of 2012		 Completed
11.2. Preparation of comparative financial information under
IFRSs for the first halfyear of 2012		 Completed
11.3. Preparation of comparative financial information under
IFRSs for the nine-monthperiod ended September 30,2012		 Completed
11.4. Preparation of comparative financial information under
IFRSs for theyear ended December 31,2012		 Completed
l2. Completion of relevant internal control (including financial
reporting process and relevant information system)adjustments		 Completed

(2) Material differences that may arise between current accounting policies used in the preparation of financial statements and IFRSs and “Rules Governing the Preparation of Financial Statements by Securities Issuers” that will be used in the preparation of financial statements in the future:

The Company uses the IFRSs already ratified currently by FSC and the “Rules Governing the Preparation of Financial Statements by Securities Issuers” that will be applied in 2013 as the basis for evaluation of material differences in accounting policies as mentioned above. However, the Company’s current evaluation results may be different from the actual differences that may arise when new issuances of or amendments to IFRSs are subsequently ratified by FSC or relevant interpretations or amendments to the “Rules Governing the Preparation of Financial Statements by Securities Issuers” come in the future.

171

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Material differences identified by the Company that may arise between current accounting policies used in the preparation of financial statements and IFRSs and “Rules Governing the Preparation of Financial Statements by Securities Issuers” that will be used in the preparation of financial statements in the future, and the effects of exemptions selected by the Company under IFRS 1 – First-time Adoption of International Financial Reporting Standards (refer to Note 13(3)) are set forth below:

A. Reconciliation of significant differences as of January 1, 2012

R.O.C. GAAP Adjustment IFRSs Description
Financial assets at fair value through
profit or loss		 1,822,867
$		 983,142
$		 2,806,009
$		 a.
Available-for-sale financial assets 649,872 3,813,667 4,463,539 b.
Financial assets carried at cost 4,243,408 3,840,505)
(		 402,903 b.
Deferred income tax assets - current 597,914 597,914)
(		 - c.
Land 1,779,860 620,497 2,400,357 d.
Revaluation increments 620,497 620,497)
(		 - d.
Construction in progress and
prepayments for equipment		 6,599,291 3,120,148)
(		 3,479,143 e.
Deferred pension costs 9,299 9,299)
(		 - f.
Other intangible assets 4,560,628 1,228,031)
(		 3,332,597 g.
Long-term prepaid rent - 1,228,031 1,228,031 g.
Deferred income tax assets -
non-current		 - 2,507,096 2,507,096 c.
Other assets - other 888,026 3,116,266 4,004,292 e.f.
Others 171,422,317 1,740 171,424,057
Total assets 193,193,979
$		 2,854,045
$		 196,048,024
$
Accrued expenses 11,268,694 338,541 11,607,235 h.
Land value incremental reserve 119,864 119,864)
(		 - d.
Accrued pension liabilities 2,617,949 324,877 2,942,826 f.i.
Deferred income tax liabilities -
non-current		 3,867,305 1,412,872 5,280,177 d.j.
Provision for employee benefits - 367,105 367,105 i.
Others 82,834,498 81,645)
(		 82,752,853
Total liabilities 100,708,310
$		 2,241,886
$		 102,950,196
$
Paid-in capital in excess of par value
of common stock		 26,509,455 2,684,671)
(		 23,824,784 k.
Special reserve 4,796,006 527,556 5,323,562 d.
Undistributed earnings 13,045,300 2,782,430 15,827,730 a.c.d.f.
h.i.j.k.
Unrecognized pension cost 263,401)
(		 263,401 - f.
Asset revaluations 527,556 527,556)
(		 - d.
Others 47,870,753 250,999 48,121,752
Total stockholders' equity 92,485,669
$		 612,159
$		 93,097,828
$

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Explanations for the significant differences are as follows:

  • a. The private placement of convertible bonds held by the Company were invested before the adoption of EITF 99-256 of the Accounting Research and Development Foundation, R.O.C., dated October 8, 2010, “Accounting for private placement of convertible bonds”, and are designated as financial assets at fair value through profit or loss and are subsequently remeasured and stated at cost. Since these are hybrid instruments, the fair value of derivatives embedded in the bonds cannot be measured reliably. If there is any objective evidence that the bonds are impaired, the impairment loss is recognized. However, in accordance with IAS 39, “Financial Instruments: Recognition and Measurement”, investments in financial instruments without an active market but with reliable fair value measurement should be measured at fair value using a valuation technique. The fair value of private placement of convertible bonds is measured based on Binomial Stock Options Pricing Model. Therefore, an increase in financial assets at fair value through profit or loss of $983,142 and undistributed earnings of $983,142 is recognized at the date of transition to IFRSs.

  • b. Before the amendment of “Rules Governing the Preparation of Financial Statements by Securities Issuers”, dated July 7, 2011, unlisted stocks and emerging stocks held by the Group should be measured at cost and recognized in “Financial assets carried at cost”. However, in accordance with IAS 39, “Financial Instruments: Recognition and Measurement”, investments in equity instruments without an active market but with reliable fair value measurement (i.e. the variability of the estimation interval of reasonable fair values of such equity instruments is insignificant, or the probability for these estimates can be made reliably) should be measured at fair value. Therefore, the Group reclassified “Financial assets carried at cost” of $3,840,505 to “Available-for-sale financial assets” and decreased other reserves income by $26,838 for the difference between fair value and book value at the date of transition to IFRSs.

  • c. The Group recognized a decrease in deferred income tax assets - current of $597,914 and increase in deferred income tax assets - non-current of $2,507,096 at the date of transition to IFRSs. The reasons are as follows:

  • a) In accordance with current accounting standards in R.O.C., a deferred tax asset or liability should, according to the classification of its related asset or liability, be classified as current or noncurrent. However, a deferred tax asset or liability that is not related to an asset or liability for financial reporting, should be classified as current or noncurrent according to the expected period to realize or settle a deferred tax asset or liability. However, under IAS 1, “Presentation of Financial Statements”, an entity should not classify a deferred tax asset or liability as current. Therefore, the Group reclassified deferred income tax assets - current of $597,914 to deferred income tax assets - non-current at the date of transition to IFRSs.

173

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  • b) The Group increased deferred income tax assets of $197,092, and increased undistributed earnings of $197,092 when computing the tax effects of differences between IFRSs and the current accounting standards in R.O.C.

  • c) Deferred income tax assets and deferred income tax liabilities do not meet the criteria for offset under IAS 12, “Income Taxes”. Therefore, the Group reclassified deferred income tax assets and deferred income tax liabilities of $1,712,090 at the date of transition to IFRSs.

  • d. In accordance with current accounting standards in R.O.C., property, plant and equipment are stated at cost except for land which is carried at appraised value. However, when cost model is adopted, revaluation is not applied under IAS 16, “Property, Plant and Equipment”. The Company reclassified land revaluation increments of $620,497 to cost of land according to IFRS 1, “First-time Adoption of International Financial Reporting Standards” and reclassified asset revaluations of $527,556, and revaluation increments of $119,864 to undistributed earnings and deferred income tax liabilities; and subsequently appropriated under the requirements of Jin-Guan-Zheng-Fa Order No. 1010012865 of FSC, the asset revaluation of $527,556 recognized as undistributed earnings in accordance with the exemption applied under IFRS 1 to special reserve.

  • e. The Group’s prepayments for the acquisition of property, plant and equipment are classified as “property, plant and equipment” in accordance with the “Rules Governing the Preparation of Financial Statements by Securities Issuers”. However, under IFRSs, it should be classified as other assets-other - non-current. Therefore, the Group reclassified property, plant and equipment, net of $3,120,148 to other assets-other - non-current of $3,120,148.

  • f. The Group increased accrued pension liabilities of $1,315,320, decreased prepaid pension cost of $3,882, decreased deferred pension costs of $9,299, decreased undistributed earnings of $1,352,241 and decreased unrecognized pension cost of $263,401. The reasons are as follows:

  • a) The discount rate used to calculate pensions shall be determined with reference to the factors specified in R.O.C. SFAS 18, paragraph 23. However, IAS 19, “Employee Benefits”, requires an entity to determine the rate used to discount employee benefits with reference to market yields on high quality corporate bonds that match the currency at the end day of the reporting period and duration of its pension plan; when there is no deep market in corporate bonds, an entity is required to use market yields on government bonds (at the end day of the reporting period) instead.

  • b) In accordance with current accounting standards in R.O.C., the unrecognized transitional net benefit obligation should be amortized on a straight-line basis over the average remaining service period of employees still in service and expected to receive benefits. However, in accordance with IAS 19, “Employee Benefits”, the unrecognized transitional net benefit obligation should not be recognized because it is the Group’s

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first-time adoption of IFRSs.

  • c) In accordance with current accounting standards in R.O.C., the excess of the accumulated benefit obligation over the fair value of the pension plan (fund) assets at the balance sheet date is the minimum amount of pension liability that is required to be recognized on the balance sheet (“minimum pension liability”). However, IAS 19, “Employee Benefits”, has no regulation regarding the minimum pension liability.

  • g. In accordance with current accounting standards in R.O.C., the subsidiaries’ payments for the acquisition of land use rights are classified as “Other intangible assets”. However, transactions meet the criteria of long-term operating leases shall be classified as “Long-term prepaid rent” under IAS 17, “Leases”. Therefore, the Group reclassified other intangible assets of $1,228,031 to long-term prepaid rent at the date of transition to IFRSs.

  • h. The current accounting standards in R.O.C. do not specify the rules on the cost recognition for accumulated unused compensated absences. The Group recognizes such costs as expenses upon actual payment. However, IAS 19, “Employee Benefits”, requires that the costs of accumulated unused compensated absences should be accrued as expenses at the end of the reporting period. Therefore, the Group recognized accrued expenses of $338,541 and reduced undistributed earnings of $338,541 at the date of transition to IFRSs.

  • i. The current accounting standards in R.O.C. do not specify the rules on the recognition of other long-term employee benefits other than pensions. However, IAS 19, “Employee Benefits”, requires that the costs of other long-term employee benefits other than pensions should be recognized as expenses as the employees render service. Certain subsidiaries located in Mainland China maintain a separate fund that meet the above criteria, and have recorded accrued pension liabilities of $990,443. The Company decreased accrued pension liabilities by $623,338, increased undistributed earnings by $623,338, and the remaining balance of $367,105 was recognized as provisions for employee benefits based on the results of the actuarial valuation at the date of transition to IFRSs.

  • j. At the date of transition to IFRSs, the Group reclassified land value incremental reserve of $119,864 to deferred income tax liabilities as described in Note 13(2)A.d. Explanation for reclassification of deferred income tax assets and deferred income tax liabilities of $1,712,090 is the same as in Note 13(2)A.c.c). The Group decreased deferred income tax liabilities by $419,082, and increased undistributed earnings by $419,082 when computing tax effects of difference between IFRSs and the current accounting standards in R.O.C.

  • k. At the date of transition to IFRSs, the Group decreased additional paid-in capital by $2,684,671, and increased undistributed earnings by $2,684,671 as follows:

  • a) In accordance with current accounting standards in R.O.C., if an investee company issues new shares and original shareholders do not purchase or acquire new shares proportionately, but the investor company does not lose its significant influence over the investee company, the investment percentage, and therefore the equity in net assets

175

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for the investment that an investor company has invested, will be changed. Such difference shall be used to adjust the ‘Additional paid-in capital’ and the ‘Long-term equity investments’ accounts. However, in accordance with IFRS 1, “First-time Adoption of International Financial Reporting Standards”, accounting treatment for changes in the parent's ownership interest in a subsidiary that do not result in a loss of control shall apply prospectively from the date of transition to IFRSs.

  • b) Compensation cost of employee stock options, whose grant date was after (on) January 1, 2008 and before January 1, 2010, is recognized as an expense using the intrinsic value method according to the Jin-Guan-six-Zi Order No. 0960065898 of the former Financial Supervisory Commission, dated December 12, 2007. However, according to IFRS 2, “Share-based Payment”, the cost of the share-based payment arrangements stated above should be expensed at the fair value of the equity instruments over the vesting period. Therefore, the Group increased capital reserve by $47,934, and decreased undistributed earnings by $47,934 at the date of transition to IFRSs.

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B. Reconciliation of significant differences as of and for the year ended December 31, 2012

R.O.C. GAAP Adjustment IFRSs Description
Available-for-sale financial assets 2,953,289
$		 1,194,002
$		 4,147,291
$		 a.m.
Financial assets carried at cost 1,665,433 1,267,144)
(		 398,289 a.
Non-current assets classified as
held for sale		 12,075,952 809,984)
(		 11,265,968 f.p.
Deferred income tax assets - current 589,592 589,592)
(		 - b.n.
Land 3,959,555 620,497 4,580,052 c.
Revaluation increments 620,497 620,497)
(		 - c.
Construction in progress and
prepayments for equipment		 3,329,580 606,293)
(		 2,723,287 d.
Investment property - 1,235,053 1,235,053 e.

Deferredpension costs		 5,094 5,094)
(		 - f.
Other intangible assets 4,114,239 1,155,604)
(		 2,958,635 g.
Long-termprepaid rent - 1,155,604 1,155,604 g.
Deferred income tax assets -
non-current		 - 2,276,662 2,276,662 b.
Asset leased to others 1,278,851 1,235,053)
(		 43,798 e.
Other assets - other 59,406 606,293 665,699 d.
Others 151,237,109 5,270)
(		 151,231,839
Total assets 181,888,597
$		 793,580
$		 182,682,177
$
Accrued expenses 11,389,826 389,743 11,779,569 h.
Liabilities directly associated with
non-current assets classified as
held for sale		 6,837,219 12,277 6,849,496 h.
Land value incremental reserve 119,864 119,864)
(		 - j.
Accruedpension liabilities 2,746,430 320,417 3,066,847 f.i.
Deferred income tax liabilities -
non-current		 4,148,016 1,013,912 5,161,928 b.j.
Provision for employee benefits - 393,366 393,366 i.
Others 57,243,416 140,423)
(		 57,102,993
Total liabilities 82,484,771
$		 1,869,428
$		 84,354,199
$
Paid-in capital in excess of par value
of common stock		 26,403,107 1,628,556)
(		 24,774,551 k.
Special reserve 1,628,536 527,556 2,156,092 c.
Undistributed earnings 22,805,885 1,002,810 23,808,695 b.c.f.h.i.j.
k.l.m.n.o.p
Unrecognizedpension cost 284,342)
(		 284,342 - f.
Asset revaluations 527,556 527,556)
(		 - c.
Amounts recognised directly in
equity relating to non-current assets
held for sale		 778,508 805,483)
(		 26,975)
(		 k.o.
Others 47,544,576 71,039 47,615,615
Total stockholders' equity 99,403,826
$		 1,075,848)
($		 98,327,978
$

177

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R.O.C. GAAP Adjustment IFRSs Description
Operatingrevenues 171,759,924
$		 -
$		 171,759,924
$
Operatingcosts 129,599,771)
(		 61,917)
(		 129,661,688)
(		 f.h.i.
Operatingexpenses 24,808,164)
(		 13,880 24,794,284)
(		 f.h.i.
Operatingincome 17,351,989 48,037)
(		 17,303,952
Non-operatingincome and expenses 5,154,348 670,682)
(		 4,483,666 l.m.o.
Income before income tax 22,506,337 718,719)
(		 21,787,618
Income tax expense 3,349,038)
(		 190,639 3,158,399)
(		 b.j.n.
Income from continuingoperations 19,157,299 528,080)
(		 18,629,219
Loss from discontinued operations 1,939,811)
(		 804,522)
(		 2,744,333)
(		 h.p.
Consolidated net income 17,217,488
$		 1,332,602)
($		 15,884,886
$
Attributable to:
Equity holders of the Company /
Owners of the parent		 16,109,542
$		 1,326,158)
($		 14,783,384
$
Minority interest / Non-controlling
interests		 1,107,946 6,444)
(		 1,101,502
17,217,488
$		 1,332,602)
($		 15,884,886
$

Explanations for the significant differences are as follows:

  • a. Please refer to Note 13(2)A.b. for the explanation of the adjustment. The Group reclassified “Financial assets carried at cost” of $1,267,144 to “Available-for-sale financial assets” and decreased other reserves by $73,142 for the difference between fair value and book value.

  • b. Explanation for the decrease in deferred income tax assets - current of $589,592 and increase in deferred income tax assets - non-current of $2,276,662 is the same as in Note 13(2)A.c. This includes reclassification of deferred income tax assets - current of $589,592 to deferred income tax assets - non-current, the difference of $243,998 for deferred income tax when computing the tax effects of differences between IFRSs and the current accounting standards in R.O.C., and the reclassification of deferred income tax assets and deferred income tax liabilities of $1,443,072.

  • c. Please refer to Note 13(2)A.d. for the explanation for the adjustment.

  • d. Please refer to Note 13(2)A.e. for the explanation for the adjustment. Therefore, the Group reclassified property, plant and equipment, net of $606,293 to other assets-other - non-current of $606,293.

  • e. In accordance with current accounting standards in R.O.C., the subsidiaries’ property that is leased to others is presented in the “Assets leased to others”. However, property that meets the definition of investment property is classified and accounted for as “Investment property” under IAS 40, “Investment Property”. Therefore, the Group reclassified assets leased to others of $1,235,053 to investment property.

  • f. The Group increased accrued pension liabilities by $1,207,766, decreased prepaid pension cost (shown as non-current classified as held for sale) by $3,882, decreased deferred pension costs by $5,094, decreased undistributed earnings at beginning of year by $1,352,241, decreased unrecognized pension cost by $284,342, decreased operating costs by $11,847 and

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decreased operating expenses by $64,172. Please refer to Note 13(2)A.f. for the explanation for the adjustment.

  • g. Please refer to Note 13(2)A.g. for the explanation for the adjustment. Therefore, the Group reclassified other intangible assets of $1,155,604 to long-term prepaid rent.

  • h. The Group increased accrued expenses and liabilities directly associated with non-current assets classified as held for sale by $401,347, decreased undistributed earnings at beginning of period by $338,541, increased operating costs by $7,045, increased operating expenses by $56,760 and decreased loss from discontinued operations by $999. Please refer to Note 13(2)A.h. for the explanation for the adjustment.

  • i. Certain subsidiaries located in Mainland China maintain a separate fund which was recorded as accrued pension liabilities of $955,660. The Group decreased accrued pension liabilities by $562,294, increased undistributed earnings at beginning of year by $623,338, increased operating costs by $67,511 and decreased operating expenses by $6,467 according to the explanation stated in Note 13(2)A.i. The remaining balance of $393,366 was recognized as provision for employee benefits.

  • j. Explanation for the reclassification of land value incremental reserve of $119,864 to deferred income tax liabilities is the same as in Note 13(2)A.d. The Group computed deferred income tax effects for the difference of ($549,024) between IFRSs and the current accounting standards in R.O.C. and reclassified deferred income tax assets and deferred income tax liabilities by $1,443,072.

  • k. The Company decreased capital reserve-long-term investments and amounts recognised directly in equity relating to non-current assets held for sale by $2,732,605 and increased undistributed earnings at beginning of year by $2,732,605. Please refer to Note 13(2) A.k.a). for the explanation for the adjustment. The balance of “capital reserve - difference between the proceeds from disposal of subsidiary and the book value” is $0 because the Company reclassified all capital reserve - long-term investments to undistributed earnings at the date of transition to IFRSs. When subsequent adjustment generated the debit balance in accordance with paragraph 30, IAS 27, “Consolidated and Separate Financial Statements”, the Company decreased undistributed earnings by $131,933 and increased capital reserve - long-term investments by $131,933.

  • l. As mentioned in Note 13(2)A.a., due to the different methods of valuation on the private placement of convertible bonds, the Company increased financial assets at fair value through profit or loss by $983,142 and increased undistributed earnings at beginning of year by $983,142 at the date of transition to IFRSs. But as mentioned in Note 4(2)C., the private placement convertible bonds of Dynapack were converted into private placement common stocks in the first quarter of 2012 and gain on disposal of investments was recognized. Therefore, the Company decreased gain on disposal of investments (shown as non-operating income and expenses) and financial assets at fair value through profit or loss with the same

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amount by $988,751 for the year ended December 31, 2012.

  • m. In accordance with current accounting standards in R.O.C., for equity investment except for those measured at fair value through profit and loss, the cash dividends received during the year of investment or conversion should be treated as the recovery of the investment cost. IFRSs do not specify the rules for this issue. Therefore, the Group increased dividend income (shown as non-operating income and expenses) by $117,872 and increased available-for-sale financial assets acquisition costs by $117,872 for the year ended December 31, 2012.

  • n. Regarding tax rates that shall apply to the deferred tax assets or liabilities associated with unrealized gains or losses arising from transactions between parent company and subsidiaries by buyer tax rate or seller tax rate, the current accounting standards in R.O.C. do not specify the rules for this issue; while, the Company adopts seller tax rate for computation. However, under IAS 12, “Income Taxes”, temporary differences in the consolidated financial statements are determined by comparing the carrying amounts of assets and liabilities in those statements and applicable taxation basis. The Company’s taxation basis is determined by reference to the Group entities’ income tax returns. Accordingly, buyer tax rate shall apply to the deferred tax assets or liabilities in the consolidated financial statements. Therefore, the Company increased deferred tax assets by $58,940 and decreased income tax expense by $58,940 for the year ended December 31, 2012.

  • o. In accordance with current accounting standards in R.O.C., in case the parent company changes its share ownership of the subsidiary but does not lose control over the subsidiary after control was obtained, the purchase method of accounting is used to account for the increase in ownership interest, while the decrease in ownership interest is regarded as disposal of shares and the related disposal gain or loss is recognized in profit or loss. In accordance with IAS 27, “Consolidated and Separate Financial Statements”, changes in a parent company’s ownership interest that do not result in the parent company losing control of the subsidiary are equity transactions, which would not affect profit or loss and goodwill would not be remeasured. In addition, the balance of “capital reserve - difference between the proceeds from disposal of subsidiary and the book value” is $0 because the Company reclassified all capital reserve - long-term investments to undistributed earnings at the date of transition to IFRSs. Therefore, the Company decreased undistributed earnings by $318,343, decreased loss on disposal of investments (shown as non-operating income and expenses) by $88,323 and increased amounts recognised directly in equity relating to non-current assets held for sale by $230,020.

  • p. As mentioned in Note 4(13), DelSolar meets the criteria of the subsidiary classified as held for sale due to the merger through share exchange by DelSolar and NSP. The subsidiaries classified as held for sale shall be measured at the lower of carrying amount and fair value

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less costs to sell on the date which the subsidiaries meet the criteria to be classified as held for sale. The balance of “capital reserve - difference between the proceeds from disposal of subsidiary and the book value” is $0 because the Company reclassified all capital reserve - long-term investments to undistributed earnings at the date of transition to IFRSs. It causes the difference of carrying amount and the fair value less costs to sell is lower the carrying amount under IFRS. Therefore, the Company increased impairment loss (shown as loss from discontinued operations) by $809,194 and decreased non-current assets classified as held for sale by $809,194, respectively.

  • (3) The Company selected the following exemptions in accordance with IFRS 1, “First-time Adoption of International Financial Reporting Standards” and “Rules Governing the Preparation of Financial Statements by Securities Issuers” that are expected to be applied in 2013:

  • A. Business combinations

    • The Group selected not to apply the requirements in IFRS 3, “Business Combinations”, retrospectively to business combinations that occur before the date of transition to IFRSs.

  • B. Share-based payment transactions

    • The Group selected not to apply the requirements in IFRS 2, “Share-based Payment”, retrospectively to the equity instruments that are vested and liabilities that are settled before the date of transition to IFRSs, arising from share-based payment transactions.

  • C. Cost recognized

    • The Group selected the values of property, plant and equipment that are revaluated in accordance with the accounting standards in R.O.C. before the date of transition to IFRSs as the cost recognized at the revaluation date.

  • D. Employee benefits

    • The Group selected to recognize all accumulated actuarial gain or loss associated with employee benefit plans in retained earnings at the date of transition to IFRSs, and disclose the information of present value of defined benefit obligation, fair value of plan assets, gain or loss on plan assets and experience adjustments in accordance with paragraph 120A (P), IAS 19, “Employee Benefits”, based on their prospective amounts for each accounting period from the date of transition to IFRSs.

  • E. Compound financial instruments

    • For the liability portion of compound financial instruments which is not outstanding at the date of transition to IFRSs, the Company elected not to separate the liability component from the equity component.

  • F. Designation for financial instruments recognized previously

    • The Group selected to designate certain “financial assets carried at cost” as “available-for-sale financial assets” at the date of transition to IFRSs.

  • The selection of exemptions above may be different from the actual selection at the date of transition to IFRSs due to the issuance of related regulations by competent authorities, changes in

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economic environment, or changes in the evaluation of effect of the Company’s selection of exemptions.

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