GLOBAL PMX - Annual Report 2019 | FinancialReports.eu

(Stock Code: 4551)

GLOBAL PMX CO., LTD.

2019 Annual Report

Annual report inquiry website: Market Observation Post System: http://mops.twse.com.tw Corporate website: http://www.global.com.tw The date of publication: May 31, 2020

1. Spokesperson ：

Name of Spokesperson : Maggie Lin Title : Sales and Marketing Deputy Director Tel : (02) 2696-2060#260 E-mail : [email protected] Name of Deputy Spokesperson: Richard Yen Title : Administrative Deputy Director Tel : (03) 496-1108#10 E-mail : [email protected]

2. Addresses and Telephone Numbers for Headquarter and Plant ：

Headquarter : 16F, No.102, Sec.1, Xintai 5[th] Rd., Xizhi Dist., New Taipei City 22102, Taiwan (R.O.C) Tel : (02) 2696-2060 Plant : 3F, No.6, Yu 3[rd] Rd., (Youshi Industrial Area) Yangmei Dist., Taoyuan City 32661, Taiwan (R.O.C) Tel : (03) 496-1108

3. Stock Transfer Agent ：

Name : SinoPac Securities Co., Ltd. Address : 3F, No.17, Bo’ ai Rd., Zhongzheng Dist., Taipei City 10044, Taiwan (R.O.C) Tel : (02) 2381-6288 Website : http://www.sinopac.com

4.Name of CPA, accountant firm, address, telephone and website of CPA responsible for the latest annual financial statement ：

Name of CPA	: Accountants Weng, Roy and Kuo, Frida N.
Accounting Firm	: Deloitte Touche Tohmatsu Limited, Taiwan
Address	: 20thF, No.100, Songren Rd., Sinyi District Taipei City 11073,
	Taiwan (R.O.C)
Tel	: (02) 2725-9988
Website	:http://www.deloitte.com.tw

5.Overseas Securities Exchange : N/A

6.Corporate Website : http://www.global.com.tw

I. Letter to Shareholders 1. The 2019 Annual Operating Report ............................................................................... 3 2. The 2020 Business Plan Summary ................................................................................. 4 3. The Future Development Strategy of the Company ....................................................... 5 4. Influences of External Competitive Environment, Regulatory Environment and the Overall Business Environment ............................................................................... 5 II. Company Profile 1. Date of Incorporation ..................................................................................................... 6 2. A Brief History of the Company..................................................................................... 6 III. Corporate Governance Report 1. Organizational System ................................................................................................. 8 2. Information of Directions, General Managers, Deputy General Managers, Deputy Assistant General Managers, and the Supervisors of All the Company’s Divisions and Branch Units .........................................................................................11 3. Most Recent Remuneration of Directors, Supervisors, General Managers, Deputy General Managers .......................................................................................... 20 4. The State of the Company’s Implementation of Corporate Governance ..................... 26 5. Information on CPA Professional Fees ........................................................................ 80 6. Information on Replacement of Certified Public Accountant: ..................................... 82 7. The Status of the Company’s Chairperson, General Manager, or any Managerial Officer in Charge of Finance or Accounting Matters Has in the Most Recent Year Held a Position at the Accounting Firm of Its Certified Public Accountant or at an Affiliated Enterprises of Such Accounting Firm ............................................ 83 8. Any Transfer of Equity Interests and/or Pledge of or Change in Equity Interests (During The Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report) by a Director, Supervisor, Managerial Officer, or Shareholder with a Stake of More than 10 Percent during the Most Recent Fiscal Year or during the Current Fiscal Year up to The Date of Publication of the Annual Report ................................................................. 83

Relationship Information, if among the Company’s 10 Largest Shareholders any One is a Related Part of a Relative within the Second Degree of Kinship of Another ....................................................................................................................... 86 10. The Total Number of Shares and Total Equity Stake Held in any Single Enterprise by The Company, Its Directors and Supervisors, Managers, and any Companies Controlled either Directly or Indirectly by the Company ........................ 87

IV. Capital Overview

Capital and Shares ........................................................................................................ 88 2. Corporate Bonds ........................................................................................................... 95 3. Preferred Shares ........................................................................................................... 96 4. Global Depository Receipts (GDR) ............................................................................. 96 5. Employee Stock Warrants ............................................................................................ 97 6. New Restricted Employee Shares ................................................................................ 97 7. States of New Shares Issuance in Connection with Mergers and Acquisitions ........... 97 8. The Status of Implementations of Capital Allocation Plans ......................................... 98 V. Operational Highlights 1. Business Activities ..................................................................................................... 100 2. Market and Sales Overview ....................................................................................... 122 3. The Number of Employees Employed for the 2 Most Recent Fiscal Years, and During the Current Fiscal Year up to the Date of Publication of The Annual Report, Their Average Years of Service, Average Age, and Education Levels ......... 136 4. Disbursement for Environmental Protection .............................................................. 136 5. Labor Relations .......................................................................................................... 136 6. Important Contracts .................................................................................................... 140

VI. Financial Overview

Condensed Balance Sheets and Statements of Comprehensive Income for the Past 5 Fiscal Years, Showing the Name of The Certified Public Account and the Auditor’s Opinion Given Thereby ...................................................................... 142
Financial Inforamtion in the Past 5 Fiscal Years ........................................................ 149 3. Audit Committee’s Report for The Most Recent Year’s Financial Statement ............ 155 4. Financial Statement for the Most Recent Fiscal Year ................................................ 156 5. A Parent Company Only Financial Statement for the Most Recent Fiscal Year Certified by a CPA .................................................................................................... 156 6. If the Company or Its Affiliates Have Experienced Financial Difficulties in the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report ............................................................................. 156 VII. A Review and Analysis of the Company’s Financial Position and Financial Performance, and a List of Risks 1. Financial Position ....................................................................................................... 157 2. Financial Performance ................................................................................................ 158 3. Cash Flow ................................................................................................................... 160 4. The Impact of Any Material Capital Expenditures over the Most Recent Fiscal Year upon the Financial and Operating Condition ................................................... 161 5. The Policy for the Most Recent Fiscal Year on Investments in other Companies, the Main Reasons for Profit/Losses Resulting Therefrom, Improvement, and Investment Plans for the Coming Fiscal Year ........................................................... 161 6. The Analysis and Assessment for Risk ....................................................................... 164 7. Other Important Matters ............................................................................................. 171 VIII. Special Disclosure 1. Information Related to the Company’s Affiliates ....................................................... 172 2. Transaction about the Company’s Private Placement of Securities during the Most Recent Fiscal Year or During the Current Fiscal Year up to the Date of Publication of the Annual Report ............................................................................. 179 3. Holding or Disposal of Shares in the Company by the Company’s Subsidiaries during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report ................................................................. 179 4. Other Maters that Require Addition Description ....................................................... 179
If any of The Situations Listed in Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act, Which Might Materially Affect Shareholders’ Equity or the Price of the Company’s Securities, Has Occurred During the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report ............................................................................. 179 Attachment 1: The Most Recent Year’s Financial Statement ........................................... 180 Attachment 2: Financial Statement for the Most Recent Fiscal Year, Including an Auditor’s Report Prepared by a Certified Public Account ...................................... 259

I. Letter to Shareholders

Dear Shareholders,

Thank you for your long-term support and encouragement.

Global PMX has had another great year of results and continued high profits. First of all, we must thank you all for the support and our employees for their hard work and commitment. In additional to the continuous improvement of revenues, technical strength, profitability and global layout of various business units, the Group focused on the long-term strategic development last year, on organizational adjustments to lead the concept of inheritance, professional division of labor, and plan the blueprint for sustainable business.

Looking forward to 2020, as stated by the major international institutions, the COVID-19 epidemic has hit the six major economic sectors of the world. The overall growth of the global economy may be significantly affected this year. The manufacturing industry is also the first among the six major economic sectors to be affected by the COVID-19 epidemic. As China plays a key role in the supply chain of automobile manufacturing currently, it is inevitable that the sales of Automobile are directly affected. According to the analysts of the international economy, China is not only an important site for manufacturers and suppliers, but also the largest market for new automobiles. If the supply chain is interrupted, it will not only affect the local automotive industry in China, but also may expand the impact globally.

The crisis can be also considered as a turning point for opportunities. Scholars predict that the COVID-19 epidemic will reach its peak in the first half of this year. While the worldwide countries are making efforts to control the spreading of the epidemic, they have also launched various programs to promote the economy and investment, including lower interest rates, preferential tax policies, loans with zero interest rates, or low-interest rates. In addition, the tension between China-US trade war last year is expected to be relieved, and mutually beneficial trade agreements between the two countries will be signed more quickly under the devotion and commitment to the epidemic elimination and the economic recovery this year. Some other analysts have also pointed out that this virus

is highly contagious and easily transmitted among the passengers of public transportation facilities. With the rising of this concept, it will help consumer’s attention and demand for purchasing automobiles. After the epidemic is effectively controlled, the sales of automobiles will be expected to be recovered quickly. Therefore, it is worth looking forward to the rebound of the automotive industry in the second half of this year.

The Company takes real-time and fast response to the epidemic, and the employees return to work quickly under good conditions. The epidemic prevention measures are implemented under the strict supervision of the local government, so it continuously becomes the unique benchmarking enterprise locally. To embrace the changeable future, the Company will uphold the principle of "Best Quality, Best Descipline", move forward bravely, but also continued to improve processes to reduce manufacturing costs, enhance competitiveness, and deepen relationships with end customers to grasp the development opportunities of front-end products and actively expand business in order to work hard for the great value of shareholders, and make contribution for the prosperity and development of the local region.

1. The 2019 Annual Operating Report

(1) 2019 Business Plan Implementation Results:

1. Business Report 2019:

(1) Operating results in 2019:

With the full support of shareholders and the efforts of all staffs, the consolidated revenue in 2019 increased by 13.32 percent higher than the previous year, 2018. Net profit has a substantial increases of NT$622,427 thousand, increased by 24.56 percent compared with a year earlier.The after-tax earnings per share was NT$7.60 in 2019.

Unit: NT$ thousands

Item	2019	2018	Change ratio
Net sales	5,014,098	4,424,839
			13.32%

Gross profit
	1,380,375	1,286,270	7.32%

Operating income
	898,134	819,064	9.65%

Pre-tax income
	858,581	726,669	18.15%

Net income
	622,427	499,709	24.56%

(2) Budget implementation:

According to the laws and regulations, the company has not disclosed the 2018 financial forecast. The overall operation and actual performance are roughly equivalent to the business plans developed within the company.

(3) Financial revenue, expenditure, and profitability analysis:

	Item	2019	2018
Financial structure	Debt to asset ratio %	65.00	62.92
	Long-term capital to property, plant and equipment %	140.77	131.75
Solvency	Current ratio %	125.94	123.17
	Quick ratio %	103.18	91.92
Profitability	Return on total assets %	7.96	7.80
	Return on shareholders’ equity %	20.72	17.22
	Profit ratio	12.41	11.29
	Earnings per share (NT$)	7.60	6.10

(4) Research and Development status:

The company is a professional precision metal component processing manufacturer, the main technology lies in the development of CNC lathes, milling machines, turning and milling composite automatic lathes, grinding machines, surface

treatment and etc. To achieve optimal production and quality with systematic measurement control management for quality feedback. Therefore, in the development of new products, the selection of machinery and equipment, the design of the manufacturing process, the development and production of the fixtures required in the process, and the innovation of the measurement and inspection tools are the focus of research and development. With the introduction of automation, the production is optimized. The developed technology can be applied to the processing of metal products in various industries, such as automotive components, disk drive motor components, semiconductor components, medical equipment components, consumer electronic components and so on.

The research and development for the implementation of the short-term, medium-term and long-term plans are as follows:

  - ●Short term: In the automotive, medical and information industries, through new customer products such as dual clutch parts, automotive diesel nozzles, high pressure pump core parts, brake safety components, and surgical automatic stapler components, we continue to register as a qualified FDA medical orthopedic surgical device component assembly in the United States and develop cloud drive product capacity verification.

  - ●Medium term: Cooperate with the client to develop precision finishing workpieces for hybrid electric vehicles. Enhance process integration such as stamping, forging, multi-axis machine multi-station processing and so on. To provide integrated processing service modules, including integrated front-end stamping, forging, casting, injection molding, machined turning, milling, multi-axis and back-end surface treatment and assembly services.

  - ●Long term: Cut into the important supply chain of electric vehicle precision components. Integrate new machine performance and develop more processing and assembly capabilities. In order to provide more high value-added products for clients. We expect to be a "world-class leading factory for precision machinery foundry."

2020 Operational Plan Summary:
(1) Operating strategy
- <1> Strictly preventing the transmission of pneumonia from novel coronavirus infection, to create a workplace where employees can work with peace of mind.
- <2> Best Quality and Best Discipline.
- <3> To promote the talented elite program and to accelerate the development of automated equipment.
- <4> The successful mass production of new products is a key issue for this year.
- <5> To build the new plant and expand manufacturing production capacity to meet future customer demand.
(2) Sales Quantity forecast and its basis
- The shipments for 2020 are expected to continue to grow under the enthusiasm of major customers' original product orders and the gradual entry of new products into mass production. The shipment estimation of this year is based on long-term demand forecasts provided by customers, new project development schedules, and capacity planning.
(3) Important production and marketing policy

     - <1> Production policy: The integrity of the new plant and the availability of the machines have been prepared to meet the large production plan for new products.

     - <2> Marketing Policy: To meet the needs of existing customers, and actively strive for new orders. To manage potential customers, and fully cooperate with new customers to develop the required resources. To observe the market trends and strive to develop high-quality, stable and high value-added customers.

Future company development strategy:
(1) To reduce the proportion of auto parts with low traditional additional value, and increase industrial products such as high additional value automobiles, medical supplies, high-tech industries and environmental green energy.
(2) To develop future electric vehicle customers and increase the proportion of medical customer products in order to diversify the risk of customer concentration.
(3) To integrate critical processes vertically, and to enhance high additional value processes such as stamping, forging and multi-axis machining processes, front-end material and back-end surface treatment capabilities and equipment investment.
Affection of the external competitive environment, regulatory environment and overall business environment:
- Affected by the epidemic of Coronavirus and outbreaks this year, the overall global economic growth could be lowered. The company has responded to this epidemic immediately and strictly implemented the preventing transmission of pneumonia from novel coronavirus infection under the strict supervision of the local government and continues to be the benchmarking company. In response to future changes, we remain committed to the principles of “Best Quality, Best Discipline”, and continue to move forward without hesitating of dedicated works for the maximum shareholders’ value, and make contribution for the prosperity and development of the local region.

Global PMX Co., LTD.

Chairman: Lin Zheng-Sheng

General Manager: Lin En-Dao

II. Company Profile

1. Date of Incorporation: February 18, 1987

2. A Brief History of the Company

Year	Milestones
February 1987	The Company was established and named as GLOBAL PMX CO., LTD. The capital amount at the time of establishment was NT ten million.
April 1995	The increase of cash of NT forty million was made. After the capital increase, the paid-in capital was NT fifty million.
November 1997	The organization was changed to a company limited by shares. The cash increase of NT fifty million was made. After the capital increase, the paid-in capital was NT one hundred million.
October 1999	The Company changed its name to GLOBAL PMX CO., LTD.
August 2007	Passed ISO9001 certification.
January 2008	Passed ISO/TS16949 certification which was required for automotive parts manufacturing.
November 2011	Cash increase of NT five hundred and fifty million was made. After the capital increase, the paid-in capital was NT six hundred and fifty million. Invested in the establishment of the subsidiary company FORTUNE TOWER HOLDING CO., LTD.
February 2012	Approved by the Investment Review Board to invest in a third place, including SEAMAX MANUFACTURING PTE., LTD. (in Dongguan), GLOBAL PMX CO., LTD. (in Dongguan) and GLOBAL PMX CO., LTD. (in Zhegiang). The Subsidiary GLOBAL PMX CO., LTD. (in Zhejiang) passed ISO13485:2003 certification. (2008: SEAMAX MANUFACTURING PTE., LTD. a subsidiary in Dongguan, passed ISO14001:2004 certification.) (2011: GLOBAL PMX CO., LTD., a subsidiary in Zhejiang, passed ISO14001:2004 certification.)
December 2012	Invested in the establishment of the subsidiary company SEAMAX INTERNATIONAL LTD.
September 2013	The cash increase of NT a hundred million was made. After the capital increase, the paid-in capital was NT seven hundred and fifty million.
November 2013	The Financial Supervisory Commission approved the public offering of the

Year	Milestones
	Company’s shares.
January 2014	TPEx has approved the listing the Company’s stocks at emerging stock market.
August 2015	Cash increased of NT eighty million. After the capital increase, the paid-in capital was NT eight hundred and thirty million.
August 2015	The Company’s shares are listed and traded on the Taiwan Stock Exchange.
September 2015	In order to maintain the Company’s reputation and shareholders’ rights, the first purchase of treasury shares was carried out, and 1,066 shares were bought back.
May 2016	For the treasury shares to be cancelled, the amount of paid-in capital after the cancellation was eight hundred and nineteen million 3 hundred and forty thousand.
May 2016	Invested in the subsidiary company ACE PLUS TECHNOLOGY LIMITED.
February 2018	Approved by the Investment Review Board to invest in a third place, including GLOBAL PMX CO., LTD. (in Jiaxing).
November 2019	The Special shareholder's meeting of the Company approved to acquire SIXXON PRECISION MACHINERY CO., LTD. by issuing new shares, which is expected to issue a total of 24,000,000 shares.
April 2020	It has completed the stock conversion by issuing new shares on April 13, 2020, namely, the stock conversion reference date, so as to acquire 100% shares of SIXXON PRECISION MACHINERY CO., LTD. After the capital increase, the paid-in capital was NT one billion fifty-nine million three hundred and forty thousand.

III. Corporate Governance Report

1. Organizational System

(1) Organizational System

i. Organization Chart

==> picture [534 x 323] intentionally omitted <==

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

Shareholders’
Meeting
Audit
Committee
Board of Directors
Compensation
Audit Office
Committee
Chairman
General Manager
Administration Sales and Project Production and Oversea Production
Department Market Engineering Department and Operating
Department Department Department
----- End of picture text -----

ii. Major Corporate Functions

Department	Functions
Audit Office	Establishes internal control system Preparation and implementation of audit plans. Audits operational procedures of each department.
Chairman’s Office	Oversees the daily operational performance and recommend improvement for various departments. Plans and implements the instructions from various managers of each department.
Administration Department	Establishment and implementation of the comprehensive management of human resources and general administration. Plans the implementations for the Company’s e-policy. Maintains and manages information equipment/internet related hardware and software equipment. Implements and maintains related application system. Plans and executes the Company’s financial management and fund scheduling business. Prepares for financial statements and establishes for management financial information. Corporate tax planning, execution and compliance with various tax laws. Plans and prepares for share affairs.
Sales and Marketing Departments	Responsible for domestic and foreign customer development. Collection, analysis and reporting of market intelligence. Execution of delay payment collection. Handles sales and service matters include orders, shipment, collection of goods, and customer complaints.
Project Engineering Department	Formulates and approves of project mass production, sample drawing, documents and specifications. Valuation of samples. Concessions of products. Evaluation and acceptance of machinery and equipment required for product productions. Technological development and process improvement of products.
Production and Operation	Operations, developments and managements of products and market.

Department	Functions
Department (Taiwan, Yangmei)	Responsible for customer product technical support, product reliability and functional verification. Formulation and promotion of the Company’s quality assurance policy. Analyzes and manages quality inspection. Management operations of purchasing and suppliers. Import and export production management. Production planning, product manufacturing, and execution of process records. Inventory management planning, shipping arrangements and relevant matters.
Oversea Production and Operation Department	Responsible for customer product technical support, product reliability and functional verification. Formulation and promotion of the Company’s quality assurance policy. Analyzes and manages quality inspection. Management operations of purchasing and suppliers. Import and export production management. Production planning, product manufacturing, and execution of process records. Inventory management planning, shipping arrangements and relevant matters.

Department

Functions

Department
(Taiwan, Yangmei)

Responsible for customer product technical support, product
reliability and functional verification.
Formulation and promotion of the Company’s quality assurance
policy.
Analyzes and manages quality inspection.
Management operations of purchasing and suppliers.
Import and export production management.
Production planning, product manufacturing, and execution of
process records.
Inventory management planning, shipping arrangements and
relevant matters.

Oversea Production
and Operation
Department

2. Information of Directions, Supervisors, General Managers, Deputy General Managers, Deputy Assistant General Managers, and the Supervisors of All the Company’s Divisions and Branch Units

(1) Information of Directors and Supervisors

i. Information of Directors April 24, 2020; Unit: Shares; %

Title	Nationality or Place of Registration	Name	Gen der	Date Elected	Term	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Current Shareholding	Spouse & Minor Current Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Re- mark
							Shares	Ratio	Shares	Ratio	Shares	Ratio	Shares	Ratio			Title	Name	Relation
Chairman	Taiwan	Lin Zheng-Sheng (Note 1)	Male	2017.06.16	3	1999.10.01	651,000	0.61	390,000	0.37	215,000	0.20	5,386,600	5.08	Sheng-te Christian College Chairman of Sixxon Precision Machinery Co., Ltd. Chairman of Xushen International Technology Co., Ltd. Chairman of Global PMX Co., Ltd.	Chairman of Global PMX Co., Ltd. Legal representative of the Company Director of Global PMX Co., Ltd.(in Zhejiang), Seamax Manufacturing Pte., Ltd.(in Dongguan), Global PMX Co., Ltd. (in Jiaxing) Chairman of JYT Technology Co., Ltd. Director of Sixxon Precision Machinery Co., Ltd. Director of New Alliance Group Limited. Chairman of Sixxon Precision Machinery Co., Ltd. Chairman of Xushen International Technology Co., Ltd.	General manager	Lin En-Dao	Father and son	Note 6

Title	Nationality or Place of Registration	Name	Gen der	Date Elected	Term	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Current Shareholding	Spouse & Minor Current Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Re- mark
							Shares	Ratio	Shares	Ratio	Shares	Ratio	Shares	Ratio			Title	Name	Relation
Director	Taiwan	Sixxon Precision Machinery Co.,Ltd.	-	2017.06.16	3	2013.08.12	12,256,900	11.57	12,256,900	11.57	0	0	0	0	－	－	－	－	－	－
	Taiwan	Legal representative : Yan Rui-Quan	Male	2017.06.16	3	2013.10.21	0	0	244,000	0.23	0	0	0	0	Master of Science and Technology Management, National Chengchi University Wistron business specialist	Assistant general manager in the Company Supervisor of subsidiaries of Global PMX Co., Ltd.(in Zhejiang), Seamax Manufacturing Pte., Ltd.(in Dongguan), Global PMX Co., Ltd. (in Jiaxing)	－	－	－	－
Director	Taiwan	He Rui-Zheng (Note 2)	Male	2017.06.16	3	2009.5.20	763,000	0.72	416,000	0.39	0	0	5,376,700	5.08	Master of Management of National Cheng Kung Engineering and Science University	Director of Elno Technology Co., Ltd.	－	－	－	－
Director	Taiwan	Han Guang-Xian g (Note 3)	Male	2017.06.16	3	2009.5.20	520,000	0.49	500,000	0.47	2,000	0	5,376,700	5.08	Department of Mechanical Engineering of Tatung University	Director of Elmer Limited	－	－	－	－
Director	Taiwan	Lu Jing-Wei (Note 4)	Male	2017.06.16	3	2011.1.19	0	0.00	10,000	0.01	0	0	4,165,700	3.93	Chien Hsin University of Science and Technology Holds an American master degree Vice chairman of Global-Thaix on Precision	Legal representative of the Company’s directors of Global PMX Co., Ltd.(in Zhejiang), Seamax Manufacturing Pte., Ltd.(in Dongguan), Global PMX Co., Ltd. (in Jiaxing).	－	－	－	－

Title	Nationality or Place of Registration	Name	Gen der	Date Elected	Term	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Current Shareholding	Spouse & Minor Current Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Re- mark
							Shares	Ratio	Shares	Ratio	Shares	Ratio	Shares	Ratio			Title	Name	Relation
															Industry Co., Ltd.	Director ofSixxon Precision Machinery Co., Ltd., Director of New Giant Limited. Vice chairman of Global-Thaixon Precision Industry Co., Ltd. Director of Sixxon Precision Machinery (Kunshan)Co.,Ltd.
Director	Taiwan	Lin Liang-Xiong (Note 5)	Male	2017.06.16	3	2013.10.21	358,000	0.34	329,000	0.31	0	0	2,666,000	2.52	Department of Engineering Machinery of Taichung Industrial High School	Director of Rich Abundant Limited	－	－	－	－
Independ- ent director	Taiwan	Gu Qing-De	Male	2017.06.16	3	2014.01.06	0	0	0	0	0	0	0	0	Master degree of Ocean Resources of National Sun Yat-sen University	Head of Dachuang Industrial Co., Ltd.	－	－	－	－
Independ- ent director	Taiwan	Yang Xiang-Yu	Male	2017.06.16	3	2014.01.06	0	0	0	0	0	0	0	0	Department of Finance and Taxation of Feng Chia University Assistant Vice President of Fubon Private Banking	Senior Vice President of Geminis Securities Limited (Hong Kong)	－	－	－	－
Independ- ent director	Taiwan	Cai Jia-Yu	Female	2017.06.16	3	2014.01.06	0	0	0	0	0	0	0	0	Graduate of Accounting Institute of Tamkang University Project manager of Accton Technology	Partner accountant of We Win CPAs Firm Independent director of North-Star Petroleum Co., Ltd.	－	－	－	－

Title	Nationality or Place of Registration	Name	Gen der	Date Elected	Term	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Current Shareholding	Spouse & Minor Current Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within Two Degrees of Kinship	Re- mark
							Shares	Ratio	Shares	Ratio	Shares	Ratio	Shares	Ratio			Title	Name	Relation
															Co.,Ltd.

Note: (1) The Company’s supervisory authority is performed by an audit committee established by independent directors.

(2) As of the book closure date, April 24, 2020, the capital of issued stock is 105,934,000 shares, while the stock capital that hasn’t completed the registration for company change is 24,000,000 shares.
Note 1: Lin Zheng-Sheng has 100% ownership of the overseas company New Alliance Group Limited, holding 5,386,600 shares of the Company, with a shareholding ratio of 5.08%.

Note 2: He Rui-Zheng has 33.33% of the overseas company ELNO TECHNOLOGY CO., LTD, holding 5,376,700shares of the Company, with a shareholding ratio of 5.08%. Note 3: Han Guang-Xiang has 30.00% of the overseas company ELMER LIMITED, holding 5,376,700 shares of the Company, with a shareholding ratio of 5.08%. Note 4: Lu Jing-Wei has 100% ownership of the overseas company NEW GIANT LIMITED, holding 4,165,700 shares of the Company, with a shareholding ratio of 3.93%. Note 5: Lin Liang-Xiong has 40.00% of the overseas company RICH ABUNDANT LIMITED, holding 2,666,000 shares of the Company, with a shareholding ratio of 2.52%. Note 6: The chairman and general manager of the Company are relatives in the first degree of kinship, which aims to improve the efficiency of decisions made by the Company and the operating performance. The chairman and general manager closely communicate with the directors and managers on the major business policies and operational implementation status of the Company. In the future, the Company will also plan to increase the seats of independent directors to enhance the function of the Board of Directors. Currently, the following measures have been implemented:

Only one director concurrently serves as the employee or manager.
It annually arranges all directors to participate in the courses opened by the Corporate Governance Association to strengthen the functions of the Board of Directors.
The three independent directors of the Company have the work experience required for commerce, finance, accounting or the business of the Company. With independence and expertise, they can provide advice to the Board of Directors timely, and can effectively supervise the Company's operations.

ii. Major Shareholders of Institutional Shareholders:

April 24, 2020

		April 24, 2020
Name of Institutional Shareholder	Major Shareholders	Ratio
Sixxon Precision Machinery Co., Ltd.	Lin Zheng-Sheng	18.18%
	Ge Zhong-Ling	9.09%
	Lin Liang-Xiong	9.09%
	Lu Jing-Wei	18.18%
	Han Guang-Xiang	18.18%
	He Rui-Zheng	9.09%
	WangJian-Zhen	9.09%
	Liu Run-Qing	9.10%

Note: Unable to obtain information in a timely manner for unlisted companies

iii. Major shareholders of the Company’s major institutional shareholders

April 24, 2020

	April 24, 2020
Name of Institutional Shareholder	Major Shareholders
None	None

iv. Professional qualifications and independence analysis of directors and supervisors

Criteria Name	Meet one of the Following Professional Qualification Requirements, together with at Least Five Years Work Experience	Meet one of the Following Professional Qualification Requirements, together with at Least Five Years Work Experience	Meet one of the Following Professional Qualification Requirements, together with at Least Five Years Work Experience	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Independence Attribute (Note)	Number of holding concurrent independent director position in other public companies
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12

Lin Zheng-Sheng	－	－	V	－	－	－	V	－	－	－	V	V	V	V	V	None
Sixxon Precision Machinery Co., Ltd. Representative :Yan Rui-Quan	－	－	V	－	－	V	V	V	V	V	V	V	V	V	－	None
He Rui-Zheng	－	－	V	V	－	－	V	－	－	－	V	V	V	V	V	None
Han Guang-Xiang	－	－	V	V	－	－	V	－	－	－	V	V	V	V	V	None
Lu Jing-Wei	－	－	V	V	－	－	V	－	－	－	V	V	V	V	V	None
Lin Liang-Xiong	－	－	V	V	－	－	V	V	－	－	V	V	V	V	V	None
GuQing-De	－	－	V	V	V	V	V	V	V	V	V	V	V	V	V	None
Yang Xiang-Yu	－	－	V	V	V	V	V	V	V	V	V	V	V	V	V	None
Cai Jia-Yu	－	V	V	V	V	V	V	V	V	V	V	V	V	V	V	1

Note:

(1) Not an employee of the Company or its affiliated companies.
(2) Not a director or supervisor of the Company’s affiliates (unless the person is an independent director of the Company, the Company’s parent company or any subsidiary of the Company)
(3) Not a shareholder whose total holdings, including those of his/her spouse and minor children, or shares held under others’ names, reach or exceed 1 percent of the total outstanding shares of the Company or rank among the top 10 individual shareholders
(4) Not a spouse, relative of second degree or closer, or direct blood relative of third degree or closer to the managers listed in (1) and persons listed in (2) or (3).
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds more than 5% of the total issued shares of the Company, a top-five shareholder, or authorized representative to be a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or 2 of the Company Act (however, this does not apply when serving concurrently and mutually asindependent director established by the Company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations).
(6) Not a director, supervisor, or employee of another company where more than half of the director positions or voting shares of that other company and the Company are controlled by the same person (however, this does not apply when serving concurrently and mutually as independent director established by the Company or its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations). (7) Not a director (managing director), supervisor (managing supervisor) or employee of another company or institution where any of its chairmen, presidents, or other equivalent positions are served by the same person or is the spouse of the Company’s chairmen, presidents, or other equivalent positions (however, this does not apply when serving concurrently and mutually as independent director established by the Company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations).
(8) Not a director (managing director), supervisor (managing supervisor), manager, or shareholder with 5% or more shareholding of a specific company or institution with which the Company has

financial or business dealings (however, this does not apply when serving concurrently and mutually as independent director established by the Company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations, if that specific company or institution holds no less than 20%, but no more than 50%, of the total issued shares of the Company).

(9) Not a professional who provides auditing to the Company or its affiliates, or a professional who provides commercial, legal, financial, accounting, or related services to the Company or its affiliates with a total remuneration of less than NT$500,000 in the past two years, nor is an owner, partner, director (managing director), supervisor (managing supervisor), or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such services to the Company or its affiliates. However, this does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee or Special Committee for Merger/Consolidation and Acquisition who perform their functions in accordance with laws relevant to the Securities and Exchange Act or the Business Mergers And Acquisitions Act.
(10) Not a spouse or relative within second degree by affinity to other directors.
(11) Not in contravention of Article 30 of the Company Act.
(12) Not an institutional shareholder or its representative pursuant to Article 27 of the Company Act

(2) Information of General Managers, Deputy General Managers, Assistant General Managers and other Department and Branch Managers:

April 24,2020；Unit: Share: %

Title	Nation- ality	Name	Gen- der	Date Elected	Shareholding	Shareholding	Spouse & Minor Current Shareholding	Spouse & Minor Current Shareholding	Current Shareholding by Nominee Arrangement	Current Shareholding by Nominee Arrangement	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship
					Share	Ratio	Share	Ratio	Share	Ratio			Title	Name	Relati- onship	Note
General Manager	Taiwan	Lin En-Dao	Male	2011.01.01	1,416,000	1.34	132,000	0.12	0	0	Department of Traffic and Administration of Feng Chia University Master of Business Administration of Chulalongkorn University Purchasingmanager of Philips	Chairman of Sixxon Precision Machinery Co., Ltd Chairman of JYT Technology Co., Ltd. Director of JYT Technology Co., Ltd.	Chairman	Lin Zheng- Sheng	Father and Son	Note 1
Assistant general manager	Taiwan	Yan Rui- Quan	Male	2011.11.01	244,000	0.23	0	0	0	0	Master of Science and Technology Management of National Chengchi University Wistron Capital Business Specialist	Supervisor of subsidiaries of Global PMX Co., Ltd.(in Zhejiang), Seamax Manufacturing Pte., Ltd.(in Dongguan), Global PMX Co.,Ltd.(in Jiaxing)	None	None	None	-
Assistant general manager	Taiwan	Lin Zhong- Yong	Male	2010.08.01	39,000	0.04	0	0	0	0	Department of Mechanical Engineering of National Yunlin University of Science and Technology Baoshun Can Engineer	Legal representative of the Company’s directors of Global PMX Co., Ltd.(in Zhejiang), Seamax Manufacturing Pte., Ltd.(in Dongguan), Global PMX Co.,Ltd.(in Jiaxing)	None	None	None	-
Assistant general manager	Taiwan	Chen Zong- Hong	Male	2014.04.01	0	0.00	0	0	0	0	Department of Machinery of Lee-Ming Institute of Technology Manufacturing Manager of AngchengTechnology	None	None	None	None	-
Assistant general manager	Taiwan	Gao Fu- Qiang	Male	2017.07.01	1,000	0.00	0	0	0	0	Department of Mechanical Engineering of Taipei University Quality Assurance Manager of Global PMX Co.,Ltd.	None	None	None	None	-

Title	Nation- ality	Name	Gen- der	Date Elected	Shareholding	Shareholding	Spouse & Minor Current Shareholding	Spouse & Minor Current Shareholding	Current Shareholding by Nominee Arrangement	Current Shareholding by Nominee Arrangement	Experience (Education)	Current Positions at the Company and Other Companies	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship	Executives, Directors or Supervisors who are Spouses or within two Degrees of Kinship
					Share	Ratio	Share	Ratio	Share	Ratio			Title	Name	Relati- onship	Note
Assistant general manager	Taiwan	Lin Ci- Qing	Female	2011.12.01	55,000	0.05	0	0	0	0	The Manchester Metropolitan University Marketing Management Marketingmanager of Drinks	None	None	None	None	-
Manager	Taiwan	Wen Zhao- Hong	Male	2011.10.12	0	0.00	0	0	0	0	Business School Netherlands MBA Director of Quality Assurance of Volkswagen	None	None	None	None	-
Financial manager	Taiwan	Xu Xue- Lian	Female	2017.05.01	114,000	0.11	0	0	0	0	Department of International Trade of National Taipei University of Business Deputy Manager of Department of Finance	None	None	None	None	-
Accounting Manager	Taiwan	Huang Yao- Ling	Female	2017.05.01	2,000	0.00	0	0	0	0	Department of Information Management of Tutung University Deputy Manager of Department of accounting	None	None	None	None	-

Note 1: The chairman and general manager of the Company are relatives in the first degree of kinship, which aims to improve the efficiency of decisions made by the Company and the operating performance. The chairman and general manager closely communicate with the directors and managers on the major business policies and operational implementation status of the Company. In the future, the Company will also plan to increase the seats of independent directors to enhance the function of the Board of Directors. Currently, the following measures have been implemented:

Only one director concurrently serves as the employee or manager.
It annually arranges all directors to participate in the courses opened by the Corporate Governance Association to strengthen the functions of the Board of Directors.
The three independent directors of the Company have the work experience required for commerce, finance, accounting or the business of the Company. With independence and expertise, they can provide advice to the Board of Directors timely, and can effectively supervise the Company's operations.

3. Most Recent Remuneration of Directors, Supervisors, General Managers, Deputy General Managers

(1) Remunerations of Directors (including independent directors)

Unit: NT$ Thousands

Title	Name	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Relevant Remuneration Received by Directors Who are also Employees	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income	Compensation Paid from an Invested Company other than The Company’s Subsidiary
		Base Compensation （A）		Severance Pay （B）		Directors Compensation （C）(Note 1)		Allowances （D）				Salary, Bonuses and Allowances（E）		Severance Pay （F）		Employee Compensation （G）(Note 2)
		The Company	All Companies in the Con- solidated Financial Statement	The Company	All Companies in the Con- solidated Financial Statement	The Company	All Companies in the Con- solidated Financial Statement	The Com- pany	All Companies in the Con- solidated Financial Statement	The Company	All Companies in the Con- solidated Financial Statement	The Company	All Companies in the Con- solidated Financial Statement	The Company	All Companies in the Con- solidated Financial Statement	The Company		All Companies in the Con- solidated Financial Statement		The Company	All Companies in the Con- solidated Financial Statement
																Cash	Stock	Cash	Stock
Chairman	Lin Zheng-Sheng									0.29	0.29	-	-	-	-	-	-	-	-	0.29	0.29	-
		-	-	-	-	1,797	1,797	15	15

Director	Sixxon Precision Machinery Co., Ltd.	-	-	-	-	1,797	1,797	15	15	0.29	0.29	-	-	-	-	-	-	-	-	0.29	0.29	-
	Representative
	:Yan Rui-Quan
Director	He Rui-Zheng	-	-	-	-	1,797	1,797	9	9	0.29	0.29	-	-	-	-	-	-	-	-	0.29	0.29	-
Director	Han Guang-Xiang	-	-	-	-	1,797	1,797	-	-	0.29	0.29	-	-	-	-	-	-	-	-	0.29	0.29	-
Director	Lu Jing-Wei	-	-	-	-	1,797	1,797	15	15	0.29	0.29	-	-	-	-	-	-	-	-	0.29	0.29	-
Director	Lin Liang-Xiong	-	-	-	-	1,796	1,796	15	15	0.29	0.29	-	-	-	-	-	-	-	-	0.29	0.29	-
Independent director	Gu Qing-De	360	360	-	-	-	-	18	18	0.06	0.06	-	-	-	-	-	-	-	-	0.06	0.06	-
Independent director	Yang Xiang-Yu	360	360	-	-	-	-	15	15	0.06	0.06	-	-	-	-	-	-	-	-	0.06	0.06	-
Independent director	Cai Jia-Yu	360	360	-	-	-	-	18	18	0.06	0.06	-	-	-	-	-	-	-	-	0.06	0.06	-

Please describe the policies, systems, standards and structure of independent directors' remuneration, and explain the relevance with the amount of remuneration based on their responsibilities, risks, and time investment.

The company independent directors’ remunerations are based on the board of directors' participation and the company value contribution by reference to the discretion of the board of directors. It also considers his personal attendance at the board of directors, serving on the functional committee such as the remuneration committees and the audit committees, and taking risks into account of the standard approval criteria.

Besides the figures shown in the table above, the remuneration to all the directors served for all the companies within the consolidated financial statement (such as a consultant not an employee) in the most recent fiscal year: None.

Range of Remuneration

	Range of Remuneration	Range of Remuneration	Range of Remuneration	Range of Remuneration
Range of Remuneration	Names of Directors
	Total of (A+B+C+D)		Total of ( (A+B+C+D+E+F+G)
	The Company	All Companies in the Consolidated Financial Statement	The Company	All Companies in the Consolidated Financial Statement
Under NT$ 2,000,000	Lin Zheng-Sheng, Sixxon Precision Machinery Co., Ltd., He Rui-Zheng, Han Guang-Xiang, Lu Jing-Wei, Lin Liang-Xiong, Gu Qing-De, Yang Xiang-Yu, Cai Jia-Yu	Lin Zheng-Sheng, Sixxon Precision Machinery Co., Ltd., He Rui-Zheng, Han Guang-Xiang, Lu Jing-Wei, Lin Liang-Xiong, Gu Qing-De, Yang Xiang-Yu, Cai Jia-Yu	Lin Zheng-Sheng, Sixxon Precision Machinery Co., Ltd., He Rui-Zheng, Han Guang-Xiang, Lu Jing-Wei, Lin Liang-Xiong, Gu Qing-De, Yang Xiang-Yu, Cai Jia-Yu	Lin Zheng-Sheng, Sixxon Precision Machinery Co., Ltd., He Rui-Zheng, Han Guang-Xiang, Lu Jing-Wei, Lin Liang-Xiong, Gu Qing-De, Yang Xiang-Yu, Cai Jia-Yu
NT$2,000,000 (included)～ NT$3,500,000(excluded)	－	－	－	－
NT$3,500,000 (included)～ NT$5,000,000(excluded)	－	－	－	－
NT$5,000,000 (included)～ NT$10,000,000(excluded)	－	－	－	－
NT$10,000,000 (included)～ NT$15,000,000(excluded)	－	－	－	－

NT$15,000,000 (included)～ NT$30,000,000(excluded)	－	－	－	－
NT$30,000,000 (included)～ NT$50,000,000(excluded)	－	－	－	－
NT$50,000,000 (included)～ NT$100,000,000(excluded)	－	－	－	－
Over NT$100,000,000	－	－	－	－
Total	9 persons	9 persons	9 persons	9 persons

(2) Remunerations of Supervisors: Not applicable (The auditor’s authority of the Company is acted upon by the audit committee established by the independent director).

(3) Remunerations of the General Manager and Deputy General Manager:

Unit: NT$ Thousands

Title	Name	Salary (A)	Salary (A)	Severance Pay （B）	Severance Pay （B）	Bonus and Allowances（C）	Bonus and Allowances（C）	Employee Compensation（D）(Note)	Employee Compensation（D）(Note)	Employee Compensation（D）(Note)	Employee Compensation（D）(Note)	Ratio of Total Remuneration (A+B+C+D) to Net Income(%)	Ratio of Total Remuneration (A+B+C+D) to Net Income(%)	Compensation Paid from an Iinvested Company other than The Company’s Subsidiary
		The Company	All Companies in the Consolidated Financial Statement	The Company	All Companies in the Consolidated Financial Statement	The Company	All Companies in the Consolidated Financial Statement	The Company		All Companies in the Consolidated Financial Statement		The Company	All Companies in the Consolidated Financial Statement
								Cash	Stock	Cash	Stock
General Manager	Lin En-Dao	1,440	4,200	0	0	0	6,000	6,445	0	6,445	0	1.27	2.67	-

Range of Remuneration

Range of Remuneration Paid to the General Managers and Deputy General Managers	Names of General Manager and DeputyGeneral Manager	Names of General Manager and DeputyGeneral Manager
	The Company	All Companies in the Consolidated Financial Statement
Under NT$ 2,000,000	－	－
NT$2,000,000 (included)～NT$3,500,000 (excluded)	－	－
NT$3,500,000 (included)～NT$5,000,000 (excluded)	－	－
NT$5,000,000 (included)～NT$10,000,000 (excluded)	Lin En-Dao	－
NT$10,000,000 (included)～NT$15,000,000 (excluded)	－	－
NT$15,000,000 (included)～NT$30,000,000 (excluded)	－	Lin En-Dao
NT$30,000,000 (included)～NT$50,000,000 (excluded)	－	－
NT$50,000,000 (included)～NT$100,000,000 (excluded)	－	－
Over NT$100,000,000	－	－
Total	1	1

(4) Employees’ Profit Sharing Granted to the Executive Officers Team:

Unit: NT$ Thousand

Item	Title	Name	Stock	Cash (Note1)	Total	Ratio of Total Amount to Net Profits after Tax(%)
Executive Officers	General Manager	Lin En-Dao	－	21,482	21,482	3.45%
	Deputy Assistant General Manager	Yan Rui-Quan
	Deputy Assistant General Manager	Lin Zhong-Yon g
	Deputy Assistant General Manager	Chen Zong-Hong
	Deputy Assistant General Manager	Gao Fu-Qiang
	Deputy Assistant General Manager	Lin Ci-Qing
	Manager	Wen Zhao-Hong
	Financial Manager	Xu Xue-Lian
	Accountin gManager	Huang Yao-Ling

＊It is the amount of compensation (including stocks and cash) of the employees who have been appointed by the board of directors in the most recent fiscal year. If it is not possible to estimate, the amount of this year is calculated based on the propotion of the actual distribution amount last year. After-tax net profit refers to the net profit after tax in the most recent fiscal year. The International Fianncial Reporting Standard has been adopted, the net profit after tax is the net profit of inividual or individual financial reports in the most recent fiscal year.

Note 1: Based on the amount of employee compensation distributed by the board of directors on March 23, 2020, it is estimated based on the ratio of the distribution amount in 2018.

(5) Analysis of the Proportion of the Total Remuneration of Directors, Supervisors, General Managers and Deputy General Managers of the Company Paid the Company and All Companies in the Consolidated Financial Statement to Net Profit After Tax in Individual Financial Statements of the Recent Two Years. Explanation of Remuneration Policies, Standards and Packages, the Procedure for Determining Remuneration, and Its Linkage to Operating Performance and Future Risk Exposure:
i. Analysis of the proportion of the total remuneration of directors, supervisors, general managers and deputy general managers of the Company paid the Company and all companies in the consolidated financial statement to net profit after tax in individual financial statements of the recent two years.

Title	2018	2018	2019	2019
	The Company	All Companies in the Consolidated Financial Statement	The Company	All Companies in the Consolidated Financial Statement
Director	2.09%	2.09%	1.92%	1.92%
General Manager and Deputy General Manager	1.21%	2.94%	1.27%	2.67%

ii. Explanation of remuneration policies, standards and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure: The remuneration paid by the Company to the directors and managers is based on the provisions of the Company’s Articles of Incorporation and the “Remuneration Management Measures”. The remuneration committee considers the remuneration based on the interbank market, Company’s operating performance, and contribution of the individual to the Company’s operating objectives. The committee considers the Company’s profitability through the board of directors, the expansion plan of future operations and report to the shareholders meeting.

4. The State of the Company ’ s Implementation of Corporate Governance

(1) The state of operations of the board of directors

The board of directors has held 5 meetings in the fiscal year of 2019; the attendance of directors is as shown below (A):

directors is as	shown below (A):
Title	Name	Attendance in Person(A)	By Proxy	Attendance in Person(%)	Remarks
Chairman	Lin Zheng-Sheng	5	0	100%	－
Director	Sixxon Precision Machinery Co., Ltd. Representative: Yan Rui-Quan	5	0
				100%	－

Director	He Rui-Zheng	3	0	60%	－
Director	Han Guang-Xiang	0	0	0%
Director	Lu Jing-Wei	5	0	100%
Director	Lin Liang-Xiong	5	0	100%	－
Independent director	Gu Qing-De	5	0	100%	－
Independent director	Yang Xiang-Yu	4	0	80%	－
Independent director	Cai Jia-Yu	5	0	100%	－

The board of directors has held 2 (A) meetings in the fiscal year of 2020; the attendance of directors is as shown below:

Title	Name	Attendance in Person (B)	By Proxy	Attendance in Person Rate (%) (B/A)	Remarks
Chairman	Lin Zheng-Sheng	2	0	100%	－
Director	Sixxon Precision Machinery Co., Ltd. Representative: Yan Rui-Quan	2	0
				100%	－

Director	He Rui-Zheng	2	0	100%	－
Director	Han Guang-Xiang	0	0	0%	－
Director	Lu Jing-Wei	2	0	100%	－
Director	Lin Liang-Xiong	1	0	50%	－

Independent director	Gu Qing-De	2	0	100%	－
Independent director	Yang Xiang-Yu	2	0	100%	－
Independent director	Cai Jia-Yu	2	0	100%	－

（ 2 ） TWSE/TPEx listed companies shall disclose information such as evaluation cycle and period, evaluation scope, method and content of evaluation of the self-evaluation (or peer evaluation) of the Board of Directors: (1) Evaluation implementation status of the Board of Directors:

Evaluation implementation status of the Board of Directors:

Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
Once per year	2019.1.1- 2019.12.31	Performance evaluation of the overall board of directors, individual board members, and functional committees (audit committee and remuneration committee)	1. Internal evaluation of the Board. 2. Selfevaluati on by individual Board members.	1.The criteria for Board performance evaluation cover the following six aspects: (A) The degree of participation in the Company's operations. (B) Improvement in the quality of decision making by the board of directors. (C) The composition and structure of the board of directors. (D) The election of the directors and their continuing education. (E) Internal controls. (F) Participation in corporate social responsibility (CSR). 2. The criteria for (self-)evaluating the performance of the board members cover the following six aspects: (A) Understanding of the Company’s goals and missions. (B) Knowledge about director’s duties. (C) The degree of participation in the Company's operations. (D) Internal relation buildingand

communication. (E) Directors’ professionalism and continuing education. (F) Internal controls. 3. The criteria for functional committees’ performance evaluation cover the following five aspects: (A) The degree of participation in the Company's operations. (B) Recognition of duties of the functional committees. (C) Improvement of the decision-making quality of the functional committees. (D) Composition and appointment of members of the functional committees. (E) Internal controls.

	Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the Company’s response should be specified: (1) Matters specified in Article 14.3 of Taiwan Securities and Exchange Act: Not applicable. The Company has set up an audit committee and is applicable to relevant matters of Article 14.5 of Taiwan Securities and Exchange Act. Please refer to the operation of the Audit Committee of the annual report. (2) Besides what is mentioned above, other Independent Directors who expressed opposition or qualified opinions that were recorded or declared in writing as: None. Independent directors have no objection or reservation this year. 2. To avoid conflict of interest among directors, the Director’s name, meeting content, and reason for avoiding conflict of interest and participation in the voting process must be properly recorded: Meeting Date Meeting Content Name of Directors Reason for Avoiding Conflict of Interest Voting Participation November 11, 2019 Approval for distribution of employee and Chairman Lin Zheng-Sheng. Directors Lu Persons of conflict of interest To avoid conflict of interest, the Directors aforementioned did not	Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the Company’s response should be specified: (1) Matters specified in Article 14.3 of Taiwan Securities and Exchange Act: Not applicable. The Company has set up an audit committee and is applicable to relevant matters of Article 14.5 of Taiwan Securities and Exchange Act. Please refer to the operation of the Audit Committee of the annual report. (2) Besides what is mentioned above, other Independent Directors who expressed opposition or qualified opinions that were recorded or declared in writing as: None. Independent directors have no objection or reservation this year. 2. To avoid conflict of interest among directors, the Director’s name, meeting content, and reason for avoiding conflict of interest and participation in the voting process must be properly recorded: Meeting Date Meeting Content Name of Directors Reason for Avoiding Conflict of Interest Voting Participation November 11, 2019 Approval for distribution of employee and Chairman Lin Zheng-Sheng. Directors Lu Persons of conflict of interest To avoid conflict of interest, the Directors aforementioned did not	Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the Company’s response should be specified: (1) Matters specified in Article 14.3 of Taiwan Securities and Exchange Act: Not applicable. The Company has set up an audit committee and is applicable to relevant matters of Article 14.5 of Taiwan Securities and Exchange Act. Please refer to the operation of the Audit Committee of the annual report. (2) Besides what is mentioned above, other Independent Directors who expressed opposition or qualified opinions that were recorded or declared in writing as: None. Independent directors have no objection or reservation this year. 2. To avoid conflict of interest among directors, the Director’s name, meeting content, and reason for avoiding conflict of interest and participation in the voting process must be properly recorded: Meeting Date Meeting Content Name of Directors Reason for Avoiding Conflict of Interest Voting Participation November 11, 2019 Approval for distribution of employee and Chairman Lin Zheng-Sheng. Directors Lu Persons of conflict of interest To avoid conflict of interest, the Directors aforementioned did not	Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the Company’s response should be specified: (1) Matters specified in Article 14.3 of Taiwan Securities and Exchange Act: Not applicable. The Company has set up an audit committee and is applicable to relevant matters of Article 14.5 of Taiwan Securities and Exchange Act. Please refer to the operation of the Audit Committee of the annual report. (2) Besides what is mentioned above, other Independent Directors who expressed opposition or qualified opinions that were recorded or declared in writing as: None. Independent directors have no objection or reservation this year. 2. To avoid conflict of interest among directors, the Director’s name, meeting content, and reason for avoiding conflict of interest and participation in the voting process must be properly recorded: Meeting Date Meeting Content Name of Directors Reason for Avoiding Conflict of Interest Voting Participation November 11, 2019 Approval for distribution of employee and Chairman Lin Zheng-Sheng. Directors Lu Persons of conflict of interest To avoid conflict of interest, the Directors aforementioned did not	Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the Company’s response should be specified: (1) Matters specified in Article 14.3 of Taiwan Securities and Exchange Act: Not applicable. The Company has set up an audit committee and is applicable to relevant matters of Article 14.5 of Taiwan Securities and Exchange Act. Please refer to the operation of the Audit Committee of the annual report. (2) Besides what is mentioned above, other Independent Directors who expressed opposition or qualified opinions that were recorded or declared in writing as: None. Independent directors have no objection or reservation this year. 2. To avoid conflict of interest among directors, the Director’s name, meeting content, and reason for avoiding conflict of interest and participation in the voting process must be properly recorded: Meeting Date Meeting Content Name of Directors Reason for Avoiding Conflict of Interest Voting Participation November 11, 2019 Approval for distribution of employee and Chairman Lin Zheng-Sheng. Directors Lu Persons of conflict of interest To avoid conflict of interest, the Directors aforementioned did not
	Meeting Date	Meeting Content	Name of Directors	Reason for Avoiding Conflict of Interest	Voting Participation
	November 11, 2019	Approval for distribution of employee and	Chairman Lin Zheng-Sheng. Directors Lu	Persons of conflict of interest	To avoid conflict of interest, the Directors aforementioned did not

	directors through Company in 2018.	Jing-Wei, He Rui-Zheng, Lin Liang-Xiong, Deputy Assistant General Manager Yan Rui-Quan		participate in the voting process. The remaining Directors present approved the case with no dissenting opinion.
	Approval for reviewing the implementation of various remuneration projects of 2020 to by the Company’s directors and managers.	Chairman Lin Zheng-Sheng. Directors Lu Jing-Wei, He Rui-Zheng, Lin Liang-Xiong, Deputy Assistant General Manager Yan Rui-Quan	Persons of conflict of interest	To avoid conflict of interest, the Directors aforementioned did not participate in the voting process. The remaining Directors present approved the case with no dissenting opinion.
	Approval for reviewing the year-end bonus of the Company’s 2019 executive business directors and managers.	Chairman Lin Zheng-Sheng. Deputy Assistant General Manager Yan Rui-Quan	Persons of conflict of interest	To avoid conflict of interest, the Directors aforementioned did not participate in the voting process. The remaining Directors present approved the case with no dissenting opinion.
March 23, 2020	The compensation of employees and directors of the Company of 2019.	Chairman Lin Zheng-Sheng. Directors Lu Jing-Wei, He Rui-Zheng, Deputy Assistant General Manager Yan Rui-Quan	Persons of conflict of interest	To avoid conflict of interest, the Directors aforementioned did not participate in the voting process. The remaining Directors present approved the case with no dissenting opinion.
3. Strengthening the functions of the board in the current and establishing the Audit Committee, promoting information conducting performance assessment: (1) Enhance the transparency of information

The Company has established the “Regulations on Board Meetings” in accordance with the “Regulations Governing Procedure for Board of Directors Meetings of Public Companies” and has published the attendance of Board of Directors Meetings on Public Information Observatory. The Company has set up an Internal Significant Message Management Mechanism to avoid improper disclosure of information and ensure the consistency and accuracy of the Company’s information to outside. The Company has also established an Internal Significant Information Operating Procedures which was announced within the Company, and is also incorporated into the Company’s internal control system to implement the fairness principle of information symmetry.

(2) Implementation of the Corporate Governance Act

To enhance the directors and managers’ understanding of Securities Management Act and to continue to strengthen the promotion of corporate governance of related laws and regulations, in addition to providing information on recent amendments to the Board of Directors, the Board of Supervisors actively participated in the discussions on corporate governance of the competent authorities. The Company also regularly arranges courses on Corporate Governance Act to improve the benefits of the promotion and the goal of effective corporate governance.

(3) Improve the Company’s s remuneration system

The Company has established a remuneration committee, which is responsible for implementing the recommendations, evaluating and supervising the Company’s overall remuneration policy, also the remuneration level of directors and managers, as well as the distribution of employee compensation. In the year of 2019, the Company has completed a regular review of the performance appraisal and remuneration policies, systems, standards and structures of its directors. In the future, the Company shall continue to review the improvement of relevant system to improve the remuneration system of the Company.

(2) The state of operations of the audit committee or attendance of supervisor at board meetings
i. The state of operations of the audit committee：

The Audit Committee has held 6 meetings (A) in the fiscal year of 2019; the attendance of independent directors is as follows:

Title	Name	Attendance in Person(B)	Attendance Ratio (%) (B/A) (Note)	Remarks
Independent Director	Cai Jia-Yu	6	100%	－
Independent Director	Gu Qing-De	6	100%	－

	Independent Director	Yang Xiang-Yu	5	83%	－

The Audit Committee has held 2 meetings (A) in the fiscal year of 2020; the attendance of independent directors is as shown below:

Title	Name	Attendance in Person(B)	Attendance Ratio (%) (B/A) (Note)	Remarks
Independent Director	Cai Jia-Yu	2	100%	－
Independent Director	Gu Qing-De	2	100%	－
Independent Director	Yang Xiang-Yu	2	100%	－
Other mentionable items: 1. While carrying out its operations, the Audit Committee must report the meeting date of the Board of Directors, period, content, and results of the Audit Committee’s response of the Audit Committee: (1) Matters specified in Article 14.5 of Taiwan Securities and Exchange Act: Audit Committee Meeting Date Content and Response Matters on Article 14.5 of Taiwan Securities and Exchange Act Result of the audit committee The Company’ s response March 25, 2019 1st time 1. Change of the CPA of financial statement. V Approved by all in audit committee None 2. The Company’s business report and financial statements for 2018. V Approved by all in audit committee None 3. The Company’s 2018 annual surplus distribution. V Approved by all in audit committee None 4. The new plant of the subsidiary of Jiaxing Global PMX Co., Ltd. V Approved by all in audit committee None 5. The procedures for the liquidation of the subsidiary Global Win Limited. And Dongguan Global PMX Co., Ltd for liquidation. V Approved by all in audit committee None 6. The Company’s “Internal Control System Statement” for 2018. V Approved by all in audit committee None

	7. The Company amended some of the articles of the “Articles of Association”.	V	Approved by all in audit committee	None
	8. The Company amended some of the articles in the “Operational Procedures for Acquisition and Disposal of Assets”.	V	Approved by all in audit committee	None
	9. The Company increased investment in the subsidiary of Global PMX Co., Ltd. in Zhejiang.	V	Approved by all in audit committee	None
	10. The Company amended "Operational Procedures for LendingFunds to Others".	V	Approved by all in audit committee	None
	11. The Company amended some of the articles in the “Operational Procedures for Endorsements and Guarantees”.	V	Approved by all in audit committee	None
	12. The Company and its subsidiaries applied for a comprehensive credit line from the financial institutions.	V	Approved by all in audit committee	None
	13. Internal audit report for the fourth quarter of 2018.	V	Approved by all in audit committee	None
May 10 2019 2nd time	1. The Company’s financial statements for the first quarter of 2019.	V	Approved by all in audit committee	None
	2 The 2018 annual review and assess the performance and independence of the CPA.	V	Approved by all in audit committee	None
	3. Internal audit report for the first quarter of 2019.	V	Approved by all in audit committee	None
August 9, 2019 3rd time	1. Financial report for the second quarter of 2019.	V	Approved by all in audit committee	None
	2. The Company and its subsidiaries applied for a comprehensive credit line from the financial institutions.	V	Approved by all in audit committee	None
	3. Internal audit report for the second quarter of 2019.	V	Approved by all in audit committee	None
September 18, 2019 4th time	1. The Company intends to appoint a CPA, Tasi Jin-Mei, as an independent expert advisor, to express an opinion regarding the reasonableness of the transaction price for future Merger and Acquisition.	V	Approved by all in audit committee	None

September 30, 2019 5th time	1. The audit committee reports the review result of the merger and acquisition (M&A) for the equity of SIXXON PRECISION MACHINERY CO., LTD., which is 100% owned by SIXXON PRECISION MACHINERY CO.,LTD.(Cayman Islands)	V	Approved by all in audit committee	None
	2. The Company proposes to issue new share for merging and acquiring the equity of SIXXON PRECISION MACHINERY CO., LTD., which is 100% owned by SIXXON PRECISION MACHINERY CO., LTD. (Cayman Islands).	V	Approved by all in audit committee	None
November 11, 2019 6th time	1. Financial report for the third quarter of 2019.	V	Approved by all in audit committee	None
	2. The Company’s operating plan and operating budget for 2020.	V	Approved by all in audit committee	None
	3. The Company’s audit plan for 2020.	V	Approved by all in audit committee	None
	4. The appointment and remuneration of the Company’s CPA.	V	Approved by all in audit committee	None
	5. Internal audit report for the third quarter of 2019.	V	Approved by all in audit committee	None
	6. The Company increased investment in the subsidiary of Global PMX Co., Ltd. in Zhejiang.	V	Approved by all in audit committee	None
	7. The Company and its subsidiaries applied for a comprehensive credit line from the financial institutions.	V	Approved by all in audit committee	None
March 23, 2020 1st time	1. The Company’s business report and financial statements for 2019.	V	Approved by all in audit committee	None
	2. The Company’s 2019 annual surplus distribution.	V	Approved by all in audit committee	None
	3. The Company’s “Internal Control System Statement” for 2019.	V	Approved by all in audit committee	None

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

4. The Company and its
Approved by
subsidiaries applied for a
V all in audit None
comprehensive credit line from committee
the financial institutions.
5. Internal audit report for the Approved by
fourth quarter of 2019. V all in audit None
committee
May 11, 1. The Company’s financial Approved by
2020 statements for the first quarter of V all in audit None
2nd time 2020. committee
2 The 2019 annual review and Approved by
assess the performance and V all in audit None
independence of the CPA. committee
3. Internal audit report for the first Approved by
quarter of 2020. V all in audit None
committee
4. The Company and its
Approved by
subsidiaries applied for a
V all in audit None
comprehensive credit line from committee
the financial institutions.
2. The independent directors, the content of the resolutions, the reasons for conflict
of interest, and the participation in the voting: None.
3. Communication between independent directors and internal auditors (which
should include audit materials, methods, and results pertaining to corporate
finances and/or operations, etc.): The Company invites accountant, independent
directors and audit supervisors to hold meetings to discuss the financial
statements, and to communicate and advise on the Company’s financial, business
conditions and the audit result of internal control. The internal audit supervisor
also provides audit reports on a regular basis. Each quarterly report is submitted
to the audit committee for discussion and approval.
----- End of picture text -----

(3) The state of the Company’s implementation of corporate governance, any departure of such implementation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reason for any such departure:

	Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
		Yes	No	Description

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
1. Does the Company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?	V		The Company has revised its “Corporate Governance Code” with the Board of Directors’ approval on May 11, 2020. All operations are handled in accordance with the Code. So far, there has not been any significant difference. The Code has been disclosed on the Market Observation Post System and the Company’s website.	No difference.
2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?	V V		(1) The Company has a spokesperson and a deputy spokesperson to handle matter such as shareholder suggestions, doubts, disputes and an Email on the website for investor relations, through which shareholders can contact the Company. The spokesperson and the deputy spokesperson will report back to the general manager upon approval of the reply. (2) The Company has designated specific personnel who possesses the list of its major shareholders as well as the ultimate owners of those shares and maintains close	(1) No difference. (2) No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
(3) Does the Company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the Company establish internal rules against insiders trading with undisclosed information?	V V		relationship with them. (3) The Company’s personnel, assets and financial management responsibilities are clearly and independently related to the Company, and the Company has set up the “Subsidiary Company Monitoring Operations”, monthly financial and business management reports of subsidiaries, and implementation of risk control mechanism for subsidiaries. (4) The Company has established “Procedures for Handling Material Inside Information” in order to avoid improper disclosure of information.	(3) No difference. (4) No difference.
3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members?	V		(1) The Company has established the “Corporate Governance Practices and Principles” to ensure diversity in the Board of Directors. At present the Company’s Board of Directors has 9 members (including 3 independent directors). The	(1) No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
(2) Does the Company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the Company establish a standard to measure the performance of the Board, and implement it annually? (4) Does the Company regularly evaluate the independence of CPAs?	V V V		members have professional background, professional skills and industry experiences. (Note 2) (2) The Company has established the Compensation Committee and Audit Committee. There is no plan to form other functional committees. (3) The Company has established “Rules and Procedures for the Board of Directors’ Performance Assessment” on 11 August, 2017. It conducts regularly scheduled performance assessments every year and will be reviewed by the compensation committee which will determine the distribution of annual compensation for directors and individual details. (4) The Company has approved the “Accounting Assessment and Performance Evaluation Measure” on 11 August, 2017 through the Board of Directors. The accounting department of the Company regularlyfills in the	(2)No difference other than volunteering setting the Audit Committee in advance (3)No difference. (4) No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			accountant assessment and performance appraisal form of the annual CPA service according to the “Accounting Assessment and Performance Evaluation Measure” set by the Board of Directors each year on the independence, competence and overall performance of the CPA and evaluates it to ensure of no stakeholders. It shall be submitted to the Board of Directors after the evaluation and shall be discussed on the last board of directors’ meeting each year. Based on the evaluation report in which the Board of Directors considers the CPA’s independence and eligibility and determines the CPA’s public fee for the following year to ensure the reliability of the financial statements of the Company. The annual CPA assessment and performance appraisal results of 2018 were reviewed and approved by the Audit Committee on May 11, 2020 and Board of Director on May 11, 2020.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
4. Whether TWSE/TPEx listed companies have deployed appropriate numbers of suitable corporate governance personnel, and designated corporate governance directors responsible for corporate governance-related matters (including but not limited to providing directors, supervisors with information required to perform business, assisting directors, supervisors in complying with laws, handled matters related to meetings of the board of directors and shareholders' meeting on the basis of the laws, and prepared the minutes of the board of directors and shareholders' meetings, etc?	V		The Management office has been designated by the Company to act as the corporate governance which is responsible for corporate governance and relevant matters such as providing the information required by the directors to conduct business, handling matters related to the meetings of the Board of Directors and shareholders, handling company registration and changes of registration, constructing Directors and shareholders’ meetings, safeguarding shareholders’ rights and strengthening the functions of the Board of Directors. Business implementation in 2020: (1) Assist independent directors and general directors to perform their duties, provide necessary data and arrange directors' further training: <1> It provides and regularly updates the latest amendments and developments of laws and regulations related the Company's business field and corporate governance for the directors when they are appointed. <2> It reviews the confidentiality level of relevant information, provides the company	No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			information required by the directors, and maintains effective communication between directors and business executives. <3> It arranges related meetings if the independent directors need to communicate with the internal audit supervisor or CPA individually to understand the Company's financial and business status in accordance with the Corporate Governance Best Practice Principles. <4> It formulates the annual continuing education plans and courses for the independent directors and general directors based on the Company's industrial characteristics, education and experience background of the directors. (2)Assist in meeting procedures and resolutions on regulatory compliance matters during the board meeting and shareholder’s meeting: <1> It reports to the Board of Directors independent directors, and Audit Committee on the operations

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			of the Company's corporate governance and confirms whether the shareholder's meeting and board meeting of the Company are held in compliance with relevant laws and corporate governance codes. <2> Assist and remind the directors that they should follow the laws and regulations when performing business or making a formal resolution of the Board of Directors, and propose suggestions when the Board of Directors is going to make an illegal resolution`.` <3> It reviews the matters related to release of major information upon the important resolutions of the Board of Directors after the meeting, so as to ensure the regulatory compliance and correctness of the material information. This is to ensure the trading information equivalence of investors. (3) It drafts the agenda for the board meeting and notifies the directors seven days in advance; convenes the meetingandprovides the

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			meeting information reminds the avoidance if any issue involves the conflict of interest, and completes the board meeting minutes within 20 days after the meeting. (4) It handles the registration before the shareholder's meeting under laws, prepares the meeting notice, the handbook for the meeting, and the meeting minutes within the statutory period, and handle the matters of registration changes in case of amendments on the Articles of Association or the re-election of directors. As of the publication date of the annual report, the manager of corporate governance has not yet taken the course. If the refresher course is completed, further information will be disclosed on the companywebsite immediately.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
5. Does the Company establish communication channels and dedicate section for stakeholder (including but not limited to the shareholders, employees, clients and suppliers) on its website to respond to important issues of corporate social responsibility concerns?	V		The Company has set up a stakeholder area on its website, and discloses the contact phone number and E-mail of the spokesperson and deputy spokesperson. It also provides an address for stakeholders’ complaints. The Company maintains good communication channels with its stakeholders and allows stakeholders to have sufficient information to judge and defend their rights.	No difference.
6. Does the Company appoint a professional shareholder service agency to deal with shareholder affairs?	V		The Company authorized “SinoPac” Bank as shareholder services agent.	No difference.
7. Disclosure of information (1) Does the Company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the Company have other information	V V		(1) The Company has established a website with dedicated person responsible for maintaining and updating important financial, business and corporate governance information for shareholders and stakeholders. (2) The Company has designated personnel to be responsible	(1)No difference. (2)No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
disclosure channels (e.g. building an English website, appointing designated people to handle information on collection and disclosure, creating a spokesperson system, webcasting investor conferences)? (3) Whether the Company announced and reported the annual financial report within two months after the end of the fiscal year, and announced and reported the first, second and third quarter financial reports and operation of each month in advance before the prescribed period.			for information collection and disclosure. There is also a spokesperson who is responsible for the external speeches, and the relevant information of the legal person briefing is disclosed in the investor area on the Company’s website for public to enquire. (3)On March 23, 2020, the Company has reported the 2019 Annual Financial Report, and announced the completion of the first, second and third quarter of 2019 financial reports and the operation of each month before the provided period.
8. Is there any other important information to facilitate a better understanding of the Company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training	V		As follows: (1) Interests and rights of employees and care for employees: all measures of the Company’s employees’ interest and rights and labor relations are in accordance with relevant laws and regulations, to which the implementation is sound. Any new or revised measures concerning employee rights and labor relations are agreed	(1) No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?			by both employers and employees, therefore no disputes have occurred. The Company’s employee welfare, retirement system and labor agreement implementation are described as follows: 1. Employ welfare measures and their implementation: guaranteed employee salary and employee bonus, provide labor and health insurance, issue birthday/Mid-Autumn Festival/Chinese New Year/labor monies, provide allowances for weddings and funerals as well as domestic and overseas holidays, hold end-of-year parties etc., to establish employee leave measures in accordance with the provisions of the Law of Labor, implement on-the-job training for employees, adhering to the concept of lifelong learning, provide employees with facilities for learning software and hardware which has achieved the goal of whole-person education. Establish an employee welfare committee to coordinate employee welfare measures andprovide

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			employee benefits on a monthly basis. 2. Retirement system and its implementation: The company currently has full pensions based on the Labor Standard Laws. The pension has been fully funded using the old system, and since July 1, 2005 the new system has been adopted which mean a 6% of the salary is paid into the employee’s individual retirement account according to the Labor Pension Statutes. An actuary will assess whether the proposal is adequate regarding the old system at the end of each year, if there is a shortage it shall be made up. 3. Agreement between labor and management: The rights and obligations of both employers and employees are handled in accordance with the provisions of the Company’s working rules, and labor meetings is held every quarter to enable full communication between labor and management. The Company’s labor relations are

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			harmonious, and there have no been any major disputes or loss between labor and management. 4. Implement the employee dividend system to enhance employees’ coherence. 5. Designate relevant personnel to participate in safety and health topics. The implementation of health checkups and health promotion activities for all employees will provide a safe and healthy working environment for employees. (2) Investor relations: In addition to regularly disclosing the Company’s important operating information, the Company continues to enhance the transparency of information, so that investors can grasp the Company’s business development and development plans. (3) Supplier relations: The Company maintains long-term good cooperative relations with suppliers.	(2) No difference. (3) No difference.

Evaluation Item		Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			(4) Relations with stakeholders: The Company has established various good and smooth communication channels in order to protect to interests of stakeholders, adheres to the principle of honesty, and a responsible attitude in order to fulfill corporate social responsibility. (5) Continuing education opportunities for directors and supervisors: According to the rules on “Continuing Education for Directors and Supervisors of TWSE/TPEx-listed Companies”, there will be training courses on the Securities & Exchange Act based on the required training house. (Note 3) (6) Implementation of risk management policy and risk measurement standards: Various internal regulations are created according to the law for risk management and evaluation. (7) Implementation of customer policies: The Company is	(4) No difference. (5) No difference. (6) No difference. (7) No difference.

Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
			committed to quality improvement and professional technology to provide customers with best services and products. (8) In order to implement corporate governance, the Company has established an independent director system in addition to establishing effective internal control. It relies on professional experience of independent directors, and has detailed regulations on board meetings in accordance with the regulations. Liability insurance is covered for directors and supervisors. The relevant insurance reports shall be submitted to the board of directors on May11, 2020.	(8) No difference.
9. According to the latest result of the Corporate Governance Evaluation System by the Corporate Governance Center of TWSE, explains the amendments or propose the priority measurements to the items which have not been improved (unnecessary for the excluded companies): According to the results of the 6th Corporate Governance Evaluation in 2019, the company's ranking is 21%~35%. In order to maintain the investors’ rights and interests, the website of the company has provided more detailed explanation of the company profile, financial and business information, shareholders’ meeting information, corporate governance and stakeholder information to be used as reference. The company is continuing to strengthen and enrich the operation of corporate governance.

Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
The company will continue evaluating the unsuccessful projects to pursue the best achievement plan and strengthen the corporate governance.

Note 1: Regardless of whether “Yes” or “No” is checked, it should be specified in the Description column.
Note 2: Does the Board of Directors develop and implement a diversified policy for the composition of its members.
Note 3: Continuing education opportunities for directors.

The status and policy of diversified board members

The policy of diversified board members:

The Company has adopted “Corporate Governance Best-Practice Principles” which requires a diversified manner when forming the board of directors. A director who is also a manager of a company should not exceed one-third of the board of directors. To formulate its operation, operational type and development needs, the basic qualifications and the diversification of professional knowledge and skills, the Company’s “Corporate Governance Best-Practice Principles” Article 20 on the diversity board member is listed as follows:

“The board structure of the Company shall be determined on the Company’s business development and its shareholdings of major shareholders, considering the need for practical operation, it is necessary to determine the appropriate board of directors for more than five persons. A director who is also a manager of a company should not exceed one-third of the board of directors. To formulate its operation, operational type and development needs with diversification shall include but not limited to the following two standards:

Basic qualifications and values: gender, age, nationality and culture.
Professional knowledge and skills: professional background (such as law, accounting, industry, finance, marketing or technology), professional skills and industry experience.

Board members should generally have the knowledge, skills and literacy to perform their duties. In order to achieve the ideal goal of corporate governance, the overall ability of the board of directors should be as follows.

The ability to make judgments about operations.
Accounting and financial analysis ability.
Business management ability.
Crisis management ability.
Knowledge of industry.
An International market perspective.
Leadership ability.
Decision-making ability.”

When the Company is selecting directors, it not only considers the professional background, but also the diversification of each director. The company has total 9 directors, 3 are independent directors and 1 of which is female, Currently, the proportion of female directors is 11%. The professional background of the members covers accountancy and industrial operations. As each board member has a diverse knowledge from industrial and academic backgrounds, recommendations can be given from different angles to help improve the Company’s business performance and management efficiency.

3. The formation of diversified board members:


Core Diversification Standard Director Name		Basic Information								Industry Experience					Professional Competence
	Nationality	Gender	Concurrent employee	age			Independent director tenure			Precision Metal Part	Automobile	Electric Machinery	Accounting and asset managemen	Accounting and Financial Analysis	Operating and Management	Mechanical engineering	Risk Management
				40 ~ 55	55 ~ 70	70 UP	Under 3 years	3 to 9 years	9 Years or more
Lin Zheng-Sheng	ROC	Male				V				V	V	V			V	V
Sixxon Precision Machinery Co., Ltd. Representative: Yan Rui-Quan	ROC	Male	V	V						V	V	V	V	V	V	V	V
Lu Jing-Wei	ROC	Male				V				V	V	V			V	V
He Rui-Zheng	ROC	Male				V				V	V	V				V
Han Guang-Xiang	ROC	Male				V				V	V	V				V
Lin Liang-Xiong	ROC	Male				V				V	V	V				V
Gu Qing-De	ROC	Male		V				V					V		V
Yang Xiang-Yu	ROC	Male		V				V					V	V
Cai Jia-Yu	ROC	Fe- male		V				V					V	V

3. The status of continuing education opportunities for directors in 2019

Title	Name	Date of Education	Organizer	Name of Course	Hours of Education
Chairman	Lin Zheng-Sheng	2019/05/10 2019/11/11	Taiwan Corporate Governance Association	1. Analysis of tax governance from the perspective of the Board of Directors. `2.`Potential risks and regulatory compliance related to governance.	6
Director	Yan Rui-Quan
Director	He Rui-Zheng
Director	Han Guang-Xiang
Director	Lu Jing-Wei
Director	Lin Liang-Xiong
Independent Director	Gu Qing-De
Independent Director	Yang Xiang-Yu
Independent Director	Cai Jia-Yu

(4) Composition, responsibilities and operation status of the Compensation Committee:

i. Information on members of the Compenstion Committee

==> picture [521 x 258] intentionally omitted <==

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

Meet One of the Following
Professional Qualification Independence Attribute
Requirements, Together with at Least (Note 2 )
Five Years Work Experience
An A Judge, Has Work Concurren t
Condition Instructor Public Experience compensati
or Higher Prosecutor, in the on
Position in a Attorney, Areas of
committee
Identity Department Certified Commerce,
of Public Law, position in Remarks
(Note 1 )
Commerce, Account, or Finance, or other
Law, Other Accounting,
1 2 3 4 5 6 7 8 9 10 publicly
Finance, Professional or Otherwise
listed
Name Accounting, or Technical Necessary
or Other Specialist for the Busi- companies
Academic Who has ness of the
Department Passed a Company
Related to National
the Business Examination
Needs of and been
----- End of picture text -----

		the Company in a Public or Private Junior College, College or University	Awarded a Certificate in a Profession Necessary for the Business of the Company
Convener	Yang Xiang-Yu	－	－												None	-
Member	Gu Qing-De	－	－												None	-
Member	Cai Jia-Yu	－													None	-

Note 1: Please fill in as a director, independent director or others in Identity.
Note 2: All members comply with the following conditions from two years before being elected and appointed, and during his term of office. Please tick the appropriate corresponding boxes.
(1) Not an employee of the Company or its affiliated companies
(2) Not a director or supervisor of the Company or its affiliated companies (unless the person is an independent director of the Company, the Company’s parent company or of any subsidiary in which the Company holds, directly or indirectly, more than 50 percent of the voting shares)
(3) Not a shareholder whose total holdings, including that of his/her spouse and minor children, or shares held under others’ names reach or exceed 1 percent of the total outstanding shares of the Company or rank among the top 10 individual shareholders
(4) Not a spouse, relative of second degree or closer, or direct blood relative of third degree or closer to the managers listed in (1) and persons listed in (2) or (3).
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds more than 5% of the total issued shares of the Company, a top-five shareholder, or authorized representative to be a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or 2 of the Company Act (however, this does not apply when serving concurrently and mutually as independent director established by the Company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations).
(6) Not a director, supervisor, or employee of another company where more than half of the director positions or voting shares of that other company and the Company are controlled by the same person (however, this does not apply when serving concurrently and mutually as independent director established by the Company or its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations).
(7) Not a director (managing director), supervisor (managing supervisor) or employee of another company or institution where any of its chairmen, presidents, or other equivalent positions are served by the same person or is the spouse of the Company’s chairmen, presidents, or other equivalent positions (however, this does

not apply when serving concurrently and mutually as independent director established by the Company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations).

(8) Not a director (managing director), supervisor (managing supervisor), manager, or shareholder with 5% or more shareholding of a specific company or institution with which the Company has financial or business dealings (however, this does not apply when serving concurrently and mutually as independent director established by the Company and its parent company, subsidiary, or subsidiary of the same parent company in accordance with provisions hereof or local laws and regulations, if that specific company or institution holds no less than 20%, but no more than 50%, of the total issued shares of the Company).
(9) Not a professional who provides auditing to the Company or its affiliates, or a professional who provides commercial, legal, financial, accounting, or related services to the Company or its affiliates with a total remuneration of less than NT$500,000 in the past two years, nor is an owner, partner, director (managing director), supervisor (managing supervisor), or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or organization that provides such services to the Company or its affiliates. However, this does not apply to members of the Remuneration Committee, Public Tender Offer Review Committee or Special Committee for Merger/Consolidation and Acquisition who perform their functions in accordance with laws relevant to the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
(10) Not in contravention of Article 30 of the Company Act

ii. Operation status of the Compensation Committee

A. There are 3 members in the Company’s Compensation Committee.
B. Current Term: From June 16, 2017 to June 16, 2020. The Compensation Committee held 2 meetings in the recent year
C. The qualifications and attendance of the Committee are shown as below (A):

Title	Name	Attendance in Person (B)	By Proxy	Attendance in Person Rate (%) (B/A) (Note)	Remarks
Independent Director	Yang Xiang-Yu	2	0	100%	None
Independent Director	Gu Qing-De	2	0	100%	None
Independent Director	Cai Jia-Yu	2	0	100%	None
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the

motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None.

Resolutions of the remuneration committee objected by members or to which reservation was expressed and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinions should be specified:

motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected by members or to which reservation was expressed and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinions should be specified:	motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected by members or to which reservation was expressed and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinions should be specified:	motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected by members or to which reservation was expressed and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinions should be specified:
Compensati on Committee Meeting Date	Discussion	Resolution
March 25, 2019 1st time	1. The compensation distribution of employees and directors of 2018.
	Resolution of the compensation committee meeting (March 25, 2019): All members of compensation committee have all approved.
	The Company’s response to compensation committee: All members of compensation committee have all approved,therefore it’s not applicable.
November 11, 2019 2nd time	1. The compensation of employees and directors of the Company of 2018.
	2. The compensation items to be implemented by the directors and managers of the Companyof 2020.
	3. The 2019 year-end bonus of the directors and managers.
	Resolution of the compensation committee meeting (November 11, 2019): All members of compensation committee have all approved.
	The Company’s response to compensation committee: All members of compensation committee have all approved,therefore it’s not applicable.
March 23, 2020 1st time	1. The compensation distribution of employees and directors of the Companyof 2019.
	2. The compensation of employees and directors of the Company of 2019.
	Resolution of the compensation committee meeting (March 23, 2020): All members of compensation committee have all approved.
	The Company’s response to compensation committee: All members of compensation committee have all approved,therefore it’s not applicable.

Note 1: Those who resign from the compensation committee before the end of the year shall specify the date or resignation in the Remarks column. The in-person attendance (%) is calculated based on the number of meetings compensation committee hold during their employment and their actual attendance.

Note 2: Before the end of the year, if the compensation committee is re-elected, the members

of the new and old compensation committee shall be specified whether it is old, new and date of the re-election in the Remarks column. The actual attendance rate (%) is calculated based on the number of meetings compensation committee hold during its incumbency and their actual attendance.

(5) The state of the Company’s performance of corporate social responsibilities

Evaluation items	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
1. Corporate Governance Implementation (1) Whether the Company have conducted risk assessments of environmental, social and corporate governance issues related to its operations in accordance with the materiality principles, and formulated relevant risk management policies or strategies? (2) Does the Company establish exclusively (or concurrently) dedicated first-line	V V		`(1)`The company follows the "Corporate Social Responsibility Best Practice Principles", and advocates to build a corporate culture of integrity. All of the employees have signed a Confidentiality Undertaking. The major suppliers have signed the letter of commitment for honesty and integrity, in which the supplies are required to conduct business transaction activities in a transparent, fair and honest way without corruption. For political contributions, it is subject to the related provisions of "Integrity Operation Procedures and Guidelines". In terms of environmental issues, each subsidiary has established an ISO14001 management system. It conducts environmental inspections and risk assessments in daily work, and pays close attention to and abides by the product inspection standards established by the legislation of the countries. (2) At present, the social responsibility activities are carried out by the management office	(1) No difference. (2) In the future, the board of directors will authorize the

Evaluation items	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?			part-timely. However, the board of directors has not authorized the senior management and reported to the board of directors.	senior management and report the process to the board of directors as necessary.
2. Issues of Environment (1) Does the Company establish proper environmental management systems based on the characteristics of their industries? (2) Does the Company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	V V		(1) The implementation of internal environment, safety and health inspection method and no smoking regulations have been set up. In the future, the Company will cooperate with the industry to establish relevant management systems for environmental management requirements. (2) Cardboard boxes and photocopying paper are recycled and reused to enhance paperless applications, waste sorting and resource recycling. The expired paper shall be recycled by the social associations for reuse. Personnel are assigned to check and turn off the power supplies that are not in use during the launch break and off-duty time, so as to avoid unnecessary waste of resources. The classification, management and recycling of business waste are carried out in accordance with ISO14001 operation procedures.	(1) No difference. (2) No difference.

Evaluation items	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
(3) Whether the Company have assessed the current and future potential risks and opportunities of climate change to the Company, and adopted measures to respond to climate-related issues? (4)Whether the Company counted the gas emissions of greenhouse, water consumption and total weight of waste in the past two years, and whether the Company formulated policies on energy saving and carbon reduction, reduction of greenhouse gas and water consumption or other waste management?	V		(3) The Group is replacing the light source in the offices and the factory with the LED lights with higher energy-conservation efficiency. (4) Energy-conservation and power-saving measures have been implemented and included in the management. In the future, the Company will formulate the energy saving and carbon reduction and GHG emission reduction strategies as needed.	(3) No difference. (4)No difference.
4. Issuse of Social (1) Does the Company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	V		(1) The Company follows the relevant national laws and regulations, including the Labor Standard Laws, the Employment Service Law and the Gender Equality in Employment Law. There is no employment discrimination within the Company. The Company provides work rules, performance evaluation methods according to the Company’s rules and regulations to ensure employees understand the	(1) No difference.

Evaluation items	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
(2) Whether the Company have formulated and implemented reasonable employee benefits measures (including salary, leave and other benefits, etc.), and appropriately reflect the operating performance or results on the compensation of employees?	V		relevant labor laws and basic rights. (2) The Company formulates employee work rules, various systems of compensation, vacation, retirement and welfare measures in accordance with laws and regulations. Moreover, it regularly sets reasonable and competitive compensation levels based on the labor market in the overseas production base and the compensation situation of the industry, plus the operating performance of the Company, which serves as the reference for the formulation of various remuneration systems. The remuneration of directors, supervisors and managers shall be paid after it is reviewed by the Remuneration Committee and approved by the Board of Directors. The distribution standards are closely correlated to the Company's operating performance. The Staff Welfare Committee of the Company plans various welfare measures based on the appropriation status of the welfare funds. The Administration Division also plans various welfare activities for employees, which are delivered to all employees.	(2) No difference.

Evaluation items	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
(3) Does the Company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (4) Does the Company provide its employees with career development and training sessions? (5) Whether the Company has complied with relevant laws and regulations and international standards for the	V V V		(3) The Company building holds a fire drill regularly to ensure the safety of the work environment. Labor Safety and Health Independent Inspection and Treatment regulations have been formulated. The Company are planning to implement health education of regular health checkup as well as group insurance. The office environment is entrusted to the property management of the building. Special personnel are assigned to clean up and conduct fire protection equipment inspections regularly. The office environment is entrusted to the property management of the building. Special personnel are assigned to clean up and conduct fire protection equipment inspections regularly. (4) Company regularly implements competency education and training for general employees, and supervisors at medium and high levels, please refer to P.69. (5) The Company provides customers with contact Email addresses and stakeholder complaint mailboxes on the website,	(3) No difference. (4) No difference. (5) No difference.

Evaluation items	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
health and safety of customers, customer privacy, marketing and labeling of products and services, and formulated relevant consumer protection policies and complaint procedures? (6) Whether the Company have formulated a supplier management policy which requires suppliers to comply with the relevant regulations on issues such as environmental protection, occupational safety and health, or labor rights, and how their implementation is.	V		which makes adequate channels for customers’ suggestions and petitions to protect the rights and interests of customers. (6) The Company’s major suppliers are evaluated each year. If not necessary, the Company shall not corporate with suppliers who are involved in violation of corporate social responsibility	(6) No difference.
5. Whether the Company referred to the reporting standards or guidelines which are accepted internationally for compiling reports which disclosed the non-financial information of the Company, such as the corporate social responsibility report. Whether the previous report obtained the assurance or verification statement of a verification unit from the third party. The Company has not yet prepared a CSR report, but will evaluate the impact and benefit function of the report that discloses the non-financial information on the corporate social responsibility, and further prepare a CSR report.
6. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”, please describe any discrepancy between the Principles and their implementation: The Company has established the corporate social responsibility principles, and has implemented according to the principles.
7. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices:

Deviations from “the Implementation Status (Note 1) Corporate Social Responsibility Best-Practice Evaluation items Principles for Yes No Abstract Explanation (Note 2) TWSE/TPEx Listed Companies” and Reasons When hiring, the Company adopts appropriate methods regardless of race, gender, age, political view or regions, but consider the individual’s professional knowledge and skills to provide fair employment opportunities for the applicant and making sure the work they do is voluntary. The Company actively participates in works with various social services and help underprivileged groups in order to help the community who are in need, have a caring heart to give back to the society. For example, the Company regularly donate to Mingxin University of Science and Technology's disadvantaged bursaries and scholarships for some departments, and offer employment opportunities for the disabled. While striving to operate the industry and provide a stable and exceptional working environment, the Company also seeks maximum benefits for the shareholders and related stakeholders. In the future, in addition to improving product quality, strengthening competiveness and cultivating professional talents, the Company actively demonstrates corporate responsibility and implements its core values.

Note 1: If "Yes" is selected for the operation status, please explain the important policies, strategies, measures and implementation status. If "No" is selected for the operation status, please explain the reason and the related policies, strategies and measures to the implemented in the future.
Note 2: The Company has compiled a corporate social responsibility report, and the Description indicates the method of reviewing the CSR report and the replacement of index page.
Note 3：The materiality principle refers to those related to environmental, social and corporate governance issues that have significant influence on the Company's investors and other interested parties.
(6) Circumstances of the company fulfilling ethical corporate management and the differences with the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and the reasons thereof.

Evaluation	Implementation Status (Note 1)	Deviations from “the Ethical

	Yes	No	Description	Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
1. Establishment of ethical corporate management policies and programs (1) Did the company develop ethical corporate management policies approved by the board of directors and clearly state its policies and practices of ethical corporate management in the regulations and external documents? Are the Board of Directors and the senior management implementing the commitment to business policies? (2) Did the company establish the assessment system for the risks of unethical behaviors and regularly analyze and assess the business activities with higher risks of unethical behaviors within its business scope? Furthermore, did the company establish	V V		(1) The Company has formulated 「Procedures for Ethical Management and Guidelines for Conduct」that approved by the Board of Directors in accordance with「Corporate Social Responsibility Best Practice Principles」, and the Company’s stipulate that employees shall not accept hospitalities, gifts, kickbacks, or other unlawful interests due to their duties or violations of their duties. These operations have been disclosed on the company website and Market Observation Post System (MOPS) to implement corporate governance and integrity management policies. (2) The Company’s “Integrity Operations Code” and “Procedures for Ethical Management and Guidelines for Conduct” clearly states the prohibition of giving bribery or taking bribery, offering illegal political contributions, improper charitable donations or sponsorship, unreasonable gifts, hospitality or other improper benefits. The	(1)No difference. (2)No difference.

Evaluation	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
prevention programs against unethical behaviors, which at least covered the prevention measures for the behaviors in Article 7, Paragraph 2 of “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”? (3) Has the Company clearly established and implemented operating procedures, code of conduct, penalties for violation and complaint system in the prevention programs against unethical behaviors as well as reviewed and revised the aforementioned programs regularly?	V		Company also regularly issues notices and information of relevant regulations to enhance integrity and self-discipline. (3) The Company has established an effective accounting system and internal control system for business activities with high risk of unethical conducts, and reviews it on a regular basis to ensure that the design and implementation of the system is effective. The Company also carries out internal audit plans on a regular basis to effectively prevent violations.	(3)No difference.
2. Fulfill operations integrity policy (1) Does the Company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Has the company	V		(1) The Company avoids dealing with those who have records of unethical conducts when engaging in business, and stipulates the terms of integrity in the relevant business contract.	(1)No difference.

Evaluation	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
established units exclusive for the promotion of ethical corporate management, which are affiliated under board of directors and will report regularly (at least once a year) to board of directors about the programs, supervision and execution situations for the ethical corporate management policies and the prevention against unethical behaviors? (3) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Has the Company established effective	V V V		(2) The Company's Administration Division is the dedicated unit that promotes business integrity. According to the job responsibilities and scope of eachdepartment, it is responsible for assisting the Board of Directors and the management to formulate and supervise the implementation of integrity operation policies and prevention programs, and ensuring the implementation of the Integrity Operations Code. Its implementation shall be reported to the Board of Directors regularly every year. The situation of integrity operations will be reported to the Board of Directors and disclosed on the Company website in the third quarter of this year. (3) The Company has established a policy to prevent conflicts of interest in the Integrity Operations Code, it shall report to the audit committee, managers, and internal audit supervisors if there are violations. (4) The management of the Company has established an	(2)No difference. (3)No difference. (4)No difference.

Evaluation	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
accounting systems and internal control systems for implementing Ethical Corporate Management and has its internal audit unit developed relevant audit programs according to the assessment results for the risks of unethical behaviors as well as reviewed compliance to prevention against unethical behaviors or entrusted accountants to conduct the review ? (5) Does the Company regularly hold internal and external educations trainings on operational integrity?	V		effective accounting system and internal control system. The internal auditors have planned the audit according to the risk levels and carried out the evaluation. So as to reasonably ensure the implementation of integrity operations. (5) The Company promotes the Integrity Operations Code from time to time in various meetings. In the future, the Company will offer regular educational trainings on integrity management as necessary.	(5)No difference.
3. Operation of the integrity channel (1) Does the Company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up?	V		(1) The Company’s “Procedures for the Management of Fraudulent Conduct” has provided proper reporting channel and the whistleblower’s identity and the content of the report shall be kept confidential. If violations of laws and	(1)No difference.

Evaluation	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Deviations from “the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Description
(2) Has the Company established standard operating procedures for the investigation on complaints and the follow-up measures to be adopted after the investigation is completed as well as the relevant confidentiality mechanisms? (3) Does the Company provide proper whistleblower protection?	V V		regulations or ethical conduct are found, they may be reported to an internal audit supervisor or other appropriate person. (2) In order to encourage employees to report violations, the Company has established the “Procedures for the Management of Fraudulent Conduct”, of which employees know that the Company will do its utmost to protect the privacy of the whistleblower and keep it confidential. (3) The Company shall be responsible for the confidentiality and protection of the whistleblower.	(2)No difference. (3)No difference.
4. Strengthening information disclosure (1) Does the Company disclose its ethical corporate management policies and the results of its implementation on the Company’s website and MOPS?		V	The Company has a website that discloses relevant information of the Company and has designated people who are responsible for data maintenance and updates. At present, there is no disclose of the ethical corporate management topromote results.	The Company will gradually strengthen the disclosure of information.
5. If the Company has established the ethical corporate management policies based on the “Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed

Evaluation	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)
	Yes	No	Description
Companies”, please describe any discrepancy between the policies and their implementation: The Company has established “Ethical Corporate Management Best-Practice Principles”, which have been implemented according to the principles, therefore, there is no difference.。
6. Other important information to facilitate a better understanding of the Company’s ethical corporate management policies (such as review and revision of regulations): None

(7) If the Company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched:

The Company has established the integrity operation rules according to the “Integrity Operation Best Practice Principles”, “Corporate Social Responsibility Policy”, “Integrity Operations Code”, “Procedures for Ethical Management and Guidelines for Conduct” and “Material Inside Information Procedures” for TWSE/GTSM-Listed Companies”, as well as setting up the audit committee and remuneration committee, related guidelines and regulations can be found on MOPS or it’s the Company’s official website (http://www.global.com.tw/).

(8) Other significant information that will provide a better understanding of the state of the Company’s implementation of corporate governance may also be disclosed:

The Company has established procedures for handling material inside information, and all relevant documents required for the disclosure of important information shall comply with the Company’s internal procedures.
The disclosure of material inside information shall be handled with by the spokesperson. Other than the Company’s Chairman, spokesperson and deputy spokesperson, the personnel of the Company shall not disclose the internal important information without authorization.

3. The status of manager and employee educational training of 2019:

The status of manager educational training

Title	Name	Date of Education	Organizer	Name of Course	House of Education
Corporate Governance supervisor	Yan Rui-Quan	2019.07.30 ~07.31	Securities and Futures Institute	Board of Directors and Supervisors Operational Practice and Corporate Governance Seminar	`12`
		2019.10.22 ~10.23	The Institute of Internal Auditors-Chine se	Pre-employment operational practice for enterprise's internal auditors	`18`
Accounting supervisor	Huang Yao-Ling	2019.07.25 2019.07.26	Accounting Research and Development Foundation	Continuous education of Issuer’s Securities and Stock Exchange for accounting supervisors	12

The status of employee educational training

Title	Name	Date of education	Organizer	Name of course	House of education
Representative of Accounting supervisor	Wu Zheng- Fen	2019.6.20 2019.6.21	Accounting Research and Development Foundation	Continuous education of Issuer’s Securities and Stock Exchange for accounting supervisors	12
Audit supervisor	Kao Xun- Feng	2019.7.17	The Institute of Internal Auditors-Chine se	How internal auditors interpret operating performance from IFRS financial statements	6
		2019.7.19	Accounting Research and Development Foundation	Internal audit and internal control practice of employee incentive systems in the enterprises	6
Representative of Audit supervisor	Yang Shu-Juan	2019.7.15	The Institute of Internal Auditors-Chine se	Discussion on auditing practice and ethics	6
		2019.8.15		Brief introduction and verification operation focus of IFRS leasing and financial instruments	6

(9) Status of implementation of internal control system:

i. Statement of Internal Control System

Global PMX Co., LTD.

Statement of Internal Control System

Date: March 23, 2020

Based on the findings of a self-assessment, Global PMX Co., Ltd. states the following with regard to its internal control system during the year 2019:

The Company’s board of directors and managements are responsible for establishing, implementing, and maintaining an adequate internal control system and have already established it. Its purpose is: i. to provide reasonable assurance over the effectiveness and efficiency of our operations (including profitability, performance and safeguarding of assets); ii. The report has reliability, timeliness, transparency; iii. It is compliance with applicable rulings, laws and regulations.
An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its three stated objectives above. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies.
The Company evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of an Internal Control System by Public Companies (herein below, the Regulations). The criteria adopted by the Regulations identify five key components of managerial internal control: i. control environment, ii. Risk assessment, iii. Control activities, iv. Information and communication, and v. monitoring activities.
The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.
Based on the findings of such evaluation, the Company believes that, on December 31, 2019, it has maintained, in all material respects, an effective internal control

system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations.

This Statement is an integral part of the Company’s annual report and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Law.
This Statement was approved by the board of directors in their meeting held on March 23, 2020, with none of the 7 attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

Global PMX Co., LTD.

Chairman: Lin Zheng-Sheng

General Manager: Lin En-Dao

ii. If CPA was engaged to conduct a Special Audit of Internal Control System, provide its audit report: None.

(10) For the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, disclose any sanctions imposed in accordance with the law upon the Company or its internal personnel, any sanctions imposed by the Company upon its internal personnel for violations of internal control system provisions, principal deficiencies, and the state of any efforts to make improvements:
i. Sanctions imposed in accoraance with the law upon the Company or its internal personnel: None.
ii. Any sanctions imposed by the Company upon its internal personnel for violations of internal control system provisions, principal deficiencies, and the state of any efforts to make improvments: None.
(11) Material resolutions of a shareholders meeting or a board of directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report:

i. The Shareholders Meeting

1. Important resolutions made by the Shareholders Meeting of 2019

The Company held a shareholders’ meeting on June 14, 2019. Important resolutions and implementations made by the shareholders’ meeting


Major Resolutions	Resolution Result	Implementation Status

Approval of the 2018 Business Report and Financial Statements	Approved the board’s proposal by voting	Not available.
Approval of the 2018 Surplus Earnings Distribution	Approved the board’s proposal by voting	(1) The cash dividend of shareholders was NT$253,995,400, and the cash dividend per share was NT$3.1. (2) The ex-dividend date was August 3, 2019, and was issued on August 23,2019.

Discussion and approval of the amendment to the provision company’s “Incorporation Artical”	Approved the board’s proposal by voting	It was registered and announced on the website of the Company upon the approval of the Ministry of Economic Affairs on July 01, 2019.
Discussion and approval of the amendment to the provision company’s “Operational Procedure for Acquisition and Disposal of Assets	Approved the board’s proposal by voting	After the resolution of the shareholders’ meeting, it was uploaded onto MOPS as well as the Company’s website, and follows the revised procedures.
Discussion and approval of the amendment to the provision company’s “Operational Procedures for Loaning Funds to Others ”	Approved the board’s proposal by voting	After the resolution of the shareholders’ meeting, it was uploaded onto MOPS as well as the Company’s website, and follows the revised procedures.
Discussion and approval of the amendment to the provision company’s “Operational Procedures for Endorsement and Guarantee”	Approved the board’s proposal by voting	After the resolution of the shareholders’ meeting, it was uploaded onto MOPS as well as the Company’s website, and follows the revised procedures.

(2)Important resolutions made by the First Special Shareholders Meeting of 2019

The Company held the First Special Shareholders’ Meeting on November 19, 2019. Important resolutions and implementations made by the shareholders’ meeting:


Major Resolutions	Resolution Result	Implementation Status

Discussion and approval the Company proposes to issue new share for merging and acquiring the equity of SIXXON PRECISION MACHINERY CO., LTD., which is 100% owned by SIXXON PRECISION MACHINERY CO., LTD.(Cayman Islands)	Approved the board’s proposal by voting	The stock conversion is completed on the stock conversion reference date April 13, 2020, since then SIXXON PRECISION MACHINERY CO., LTD. becomes a 100% shareholding subsidiary of the Company.

ii. Important resolutions made by the board of directors’ Meeting during 2019 and up to the date of publication of the annual report:

Meeting Date	Important Resolutions	Implementation Status
March 25, 2019 1st time	1. Change of the financial statement CPA. 2. The business report and financial report of 2018. 3. The earnings distribution of 2018. 4. The distribution of compensation for employees and directors of 2018. 5. The new plant of the subsidiary of Jiaxing Global PMX Co., Ltd. 6. The procedures for the liquidation of the subsidiary Global Win Limited. And Global PMX Co.,Ltd (In Dongguan). 7. The Internal Control System Statement of 2018. 8. Amending certain parts of the provisions of “Regulations Governing Procedure for Board of Directors. 9. Amending certain parts of the provisions of “Articles of Incorporation”. 10. Amending certain parts of the provisions of the “Operational Procedures for the Acquisition and Disposal of Assets". 11. Amending certain parts of the provisions of the “Corporate Governance Best Practice Principles”. 12.The Company increased investment in its subsidiary	1. All attending directors have approved. 2. All attending directors have approved. 3. All attending directors have approved. 4. All attending directors have approved. 5.All attending directors have approved. 6. All attending directors have approved. 7. All attending directors have approved. 8. All attending directors have approved. 9. All attending directors have approved. 10. All attending directors have approved. 11.All attending directors have approved. 12. All attending directors have approved.

Meeting Date	Important Resolutions	Implementation Status
	Global PMX Co., Ltd. in Zhejiang. 13. Amending certain parts of the provisions of the “Operational Procedures for Lending Funds to Others". 14. Amending certain parts of the provisions of the “Operational Procedures for Endorsements and Guaranteess". 15. The Company and its subsidiaries proposed to apply for a comprehensive credit limit from financial institutions.	13. All attending directors have approved. 14 All attending directors have approved. 15. All attending directors have approved.
May 10, 2019 2ndtime	1.The report of Company financial statements of the first quarter of 2019. 2. The 2018 annual review and assess the performance and independence of the CPA.	1. All attending directors have approved. 2. All attending directors have approved.
August 9, 2019 3rdtime	1. The report of Company financial statements of the second quarter of 2019. 2. The Company and its subsidiaries proposed to apply for a comprehensive credit limit from financial institutions.	1. All attending directors have approved. 2. All attending directors have approved.
Sepember 30, 2019 4thtime	`1.`The Company proposes to issue new share for merging and acquiring the equity of SIXXON PRECISION MACHINERY CO., LTD., which is 100% owned by SIXXON PRECISION MACHINERY CO., LTD. (Cayman Islands).	1. All attending directors have approved

Meeting Date	Important Resolutions	Implementation Status
	`2.`Matters related to the Convening of 2019 the First Special Shareholders’ Meeting.	2. All attending directors have approved.
November 11, 2019 5thtime	1. The report of Company financial statements of the third quarter of 2019. 2. The Company’s operating plans and budget of 2020. 3. The Company’s audit plans of 2020. 4. The appointment and remuneration of the Company CPA of 2020. 5. The distribution for the Company’s employee and director remuneration of 2018. 6. Proposed the implementations of various remuneration projects by the directors and managers of 2020. 7. The Company’s directors and managers’ year-end bonus of 2019. 8. The Company increased investment in its subsidiary Global PMX Co., Ltd. in Zhejiang. 9. The Company and its subsidiaries proposed to apply for a comprehensive credit limit from financial institutions.	1. All attending directors have approved. 2. All attending directors have approved. 3. All attending directors have approved. 4. All attending directors have approved. 5. All attending directors have approved. 6. All attending directors have approved. 7. All attending directors have approved. 8. All attending directors have approved. 9. All attending directors have approved.
March 23, 2020 1sttime	1. The business report and financial report of 2019. 2. The earnings distribution of 2019. 3. The distribution of	1. All attending directors have approved. 2. All attending directors have approved. 3. All attending directors have

Meeting Date	Important Resolutions	Implementation Status
	compensation for employees and directors of 2019. 4. The distribution for the Company’s employee and director remuneration of 2019. 5. The Internal Control System Statement of 2019. 6. Amending certain parts of the provisions of“Articles of Incorporation”. 7. Amending certain parts of the provisions of “Regulations Governing Procedure for Board of Directors. 8. Amendment to the Rules of Procedure for Shareholders’ Meeting. 9. Amendment to Corporate Social Responsibility Best Practice Principles. 10. Formulate Procedures for Ethical Management and Guidelines for Conduct. 11. Matters related to the convening of the 2020 shareholders’ general meeting. 12. Matters concerning the rights of shareholders to propose agendas for the 2020 Annual General Meeting of Shareholders. 13. To elect nine Directors (including six directors and three independent directors). 14. The nomination for the candidates of directors. 15. The directors (independent director) candidates nominated and reviewed by Board of Directors.	approved. 4. All attending directors have approved. 5. All attending directors have approved. 6. All attending directors have approved. 7. All attending directors have approved. 8. All attending directors have approved. 9. All attending directors have approved. 10. All attending directors have approved. 11. All attending directors have approved. 12. All attending directors have approved. 13. All attending directors have approved. 14. All attending directors have approved. 15. All attending directors have approved.

Meeting Date	Important Resolutions	Implementation Status
	16. Removal the Company new elected directors and their representatives from the non-compete agreement restrictions. 17. The Company and its subsidiaries proposed to apply for a comprehensive credit limit from financial institutions. 18. To schedule the Date of Share Exchange of the Company and SIXXON PRECISION MACHINERY CO., LTD.	16. All attending directors have approved. 17. All attending directors have approved. 18. All attending directors have approved.
May 11, 2020 2ndtime	1. The report of Company financial statements of the first quarter of 2020. 2. The 2019 annual review and assess the performance and independence of the CPA. 3. Amendment to Corporate Governance Best Practice Principles. 4. The Company and its subsidiaries proposed to apply for a comprehensive credit limit from financial institutions.	1. All attending directors have approved. 2. All attending directors have approved. 3. All attending directors have approved. 4. All attending directors have approved.

Implementation status: The resolutions of the board of directors have been completed according to the board of directors.

(12) Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director or supervisor has expressed a dissenting opinion with respect to a material resolution passed by the board of directors, and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof: None.
(13) A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the Company’s chairman, general manager, principal accounting officer, principal financial offer, chief internal auditor, and principal research and development officer: None.

5. Information on CPA Professional Fees:

Accounting Firm	Name of CPAs	Name of CPAs	Period Covered by CPA’s Audit	Remarks
Deloitte & Touche Taiwan	Weng, Roy	Kuo, Frida N.	January 1, 2019~December 31, 2019	-

Unit: NT$ Thousands

Fee Items Fee Range	Fee Items Fee Range	Audit fee	Non-Audit fee	Subtotal
1	Under 2,000 thousand	-	275	-
2	2,000 thousand（included）～4,000 thousand	3,100	-	3,375
3	4,000 thousand（included）～6,000 thousand	-	-	-
4	6,000 thousand（included）～8,000 thousand	-	-	-
5	8,000 thousand（included）～10,000 thousand	-	-	-
6	Over 10,000 thousand（included）	-	-	-

(1) When non-audit fees paid to the certified public accountant, to the accounting firm of the certified public accountant, and/or to any affiliated enterprise of such accounting firm are one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees are as well as details of non-audit services shall be disclosed: None.

Unit: NT$ Thousand

Accounting firm	Name of CPA	Audit Fee	Non-Audit fee	Non-Audit fee	Non-Audit fee	Non-Audit fee	Non-Audit fee	Period Covered by CPA’s Audit	Remarks
			System of Design	Com- pany Registra- tion	Human Resour ces	Others (Note)	Sub- total
Deloitte & Touche Taiwan	Weng, Roy Kuo, Frida N.	3,100	-	-	-	275	275	Covers the full financial year	TP transfer price of NT$230 thousand, and business tax of NT$45 thousand.

(2) When the Company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed: None.
(3) When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 15% or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefore shall be disclosed: None.

6. Information on Replacement of Certified Public Accountant:

(1) Regarding the former CPA:

Replacement Date	Approved by the board of directors on March 25, 2019	Approved by the board of directors on March 25, 2019	Approved by the board of directors on March 25, 2019	Approved by the board of directors on March 25, 2019	Approved by the board of directors on March 25, 2019
Replacement reasons and explanations	The Company co-operated with Deloitte Taiwan internal rotation in order to strengthen the independence of the CPA, from the fourth quarter of 2018, the CPA will be Weng, Roy and Kuo, Frida N. in place of Weng, Roy and Chen Hui-Ming.
Describe whether the company terminated or the CPA did not accept the appointment	S t a t u s ＼P a r t i e s		CPA		The Company
	Appointment terminated automatically		Not available		Not available
	Appointment rejected (discontinued)		Not available		Not available
Other issues (except for unqualified issues) in the audit reports within the last twoyears	None
Differences with the company	Yes			Accounting principles orpractices
				Disclosure of financial statement
				Audit scope or steps
				Others
	No	
	Remarks	Not available
Other revealed matters	None

(2) Regarding the successor CPAs

Name of accounting firm	Deloitte & Touche Taiwan
Name of CPA	Weng, Roy and Kuo, Frida N.
Date of appointment	Approved by the board of directors on March 25, 2019
Consultation results and opinions on accounting treatments or principles with respect to specified transactions and the Company’s financial reports that the CPA might issue prior to the engagement	None
Succeeding CPA’s written opinion of disagreement towards the former CPA	None

(3) The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the standards:

None.

7. The Statement of the Company’s Chairman, President, and Financial or Accounting Managers has in the Most Recent Year Held a Position at the Accounting Firm of Its CPA or at Affiliated Enterprise of Such Accounting Firm, the Name and Position of the Person, and the Period during which the Position was Held, shall be Disclosed: None.

8. Any Transfer of Equity Interests and/or Pledge of or Change in Equity Interests (During the Most Recent Fiscal Year or During the Current Fiscal Year up to the Date of Publication of the Annual Report) by a Director, Supervisor, Managerial Officer, or Shareholder with A Stake of More than 10 Percent during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report:

(1) Change in equity transfer and equity pledge:

Unit: Shares

				Unit: Shares	Unit: Shares
Title	Name	2019		Current year to March 31, 2020
		Shareholding Increase/ Decrease	Pledged Shares Increase/ Decrease	Shareholding Increase/ Decrease	Pledged Shares Increase/ Decrease
Chairman	Lin Zheng-Sheng	－	－	－	－
Director and Major Shareholder	Representative for Sixxon Precision Machinery Co.,f Ltd.: Yan Rui-Quan	－	－	－	－
Representative of Director and Deputy General Manager	Yan Rui-Quan	－	－	－	44,000
Director	He Rui-Zheng	(120,000)	－	－	－
Director	Han Guang-Xiang	－	－	－	－
Director	Lu Jing-Wei	(5,000)	－	－	－
Director	Lin Liang-Xiong	－	－	－	－
Independence Director	Gu Qing-De	－	－	－	－
Independence Director	Yang Xiang-Yu	－	－	－	－
Independence Director	Cai Jia-Yu	－	－	－	－
General Manager	Lin En-Gao	(10,000)	－	－	－
Deputy General Manager	Lin Zhong-Yong	－	－	－	－
Deputy General Manager	Lin Ci-Qing	－	－	－	－
Deputy General Manager	Chen Zong-Hong	－	－	－	－
Deputy General Manager	Gao Fu-Qiang	－	－	－	－

Manager	Wen Zhao-Hong	－	－	－	－
Financial Manager	Xu Xue-Lian	(25,000)	－	－	－
Accounting Manager	Huang Yao-Ling	－	－	－	－

(2) Information on equity transfer: The counterparties of equity transfer are not related parties.

(3) Information on equity pledge: The counterparties of share pledges are not related parties.

9. Relationship Information, if among the Company’s 10 Largest Shareholders any One is a Related Party or a Relative within the Second Degree of Kinship of Another:

							April 24,2020,Unit: Share	April 24,2020,Unit: Share	April 24,2020,Unit: Share
Name	Shareholding		Spouse & Minor Current Shareholding		Shareholding by Nominee Arrangement		Names and the Relationship among the Top Ten Shareholders in the Relationship of Related Parties or Spouses, Blood Relatives wWithin the Second Degree of Kinship		Re- marks
	Share	%	Share	%	Share	%	Name	Relations
Sixxon Precision Machinery Co., Ltd. (Cayman Islands) Chairman :Lin En-Dao	24,000,000	22.66%	0	0	0	0	Sixxon Precision Machinery Co., Ltd. NEW ALLIANCE GROUP LIMITED	The Chairman is Farhter-son.	－
Sixxon Precision Machinery Co., Ltd. Chairman Lin Zheng-Sheng	12,256,900	11.57%	0	0	0	0	NEW ALLIANCE GROUP LIMITED	The Chairman is the same person.	－
							Sixxon Precision Machinery Co., Ltd. (Cayman Islands)	The Chairman is Farhter-son.
NEW ALLIANCE GROUP LIMITED Representative: Lin Zheng-Sheng	5,386,600	5.08%	0	0	0	0	Sixxon Precision Machinery Co., Ltd.	The Chairman is the same person.	－
							Sixxon Precision Machinery Co., Ltd. (Cayman Islands)	The Chairman is Farhter-son.
ELMER LIMITED Representative: Han Guang-Xiang			0	0	0	0	None	None	－
	5,376,700	5.08%

ELNO TECHNOLOGY CO., LTD Representative: He Rui-Zheng			0	0	0	0	None	None	－
	5,376,700	5.08%

TMK Co., Ltd Representative: Wang Jian-Zhen			0	0	0	0	None	None	－
	4,576,700	4.32%

Cathay Life Insurance Co., Ltd. Chairman：Cai Hong-Tu			0	0	0	0	None	None	－
	4,175,000	3.94%

NEW GIANT LIMITED Representative: Lu Jing-Wei			0	0	0	0	None	None	－
	4,165,700	3.93%

Fubon Life Insurances Co., Limited Chairman: Cai Ming-Xing	3,726,000		0	0	0	0	None	None	－
		3.52%

RICH ABUNDANT LIMITED Representative: Lin Liang-Xiong	2,666,000		0	0	0	0	None	None	－
		2.52%

10. The Total Number of Shares and Total Equity Stake Held in any Single Enterprise by The Company, Its Directors and Supervisors, Managers, and any Companies Controlled either Directly or Indirectly by the Company:

December 31, 2019 Unit: USD/Thousands: %

Affiliated Enterprises (Note)	Ownership by the Company	Ownership by the Company	Directors, Supervisors, Managers, and Directly/Indirectly Controlled Businesses	Directors, Supervisors, Managers, and Directly/Indirectly Controlled Businesses	Total Ownership	Total Ownership
	Shares	%	Shares	%	Shares	%
Fortune Tower HoldingCO., Ltd.	100,750	100%	0	0	100,750	100%
Seamax International Ltd.	1,000	100%	0	0	1,000	100%
Ace Plus Technology Limited.	50	100%	0	0	50	100%
Seamax Manufacturing Pte. Limited.	12,200	100%	0	0	12,200	100%
Global Win Limited.	10,000	100%	0	0	10,000	100%
Global Advance Technology Limited.		100%	0	0
						100%
	72,750				72,750

Seamax Manufacturing Pte., Ltd.(In Dongguan)	(Note)	100%	0	0	(Note)	100%
Global PMX Co., Ltd.(In Dongguan)	(Note)	100%	0	0	(Note)	100%
Global PMX Co., Ltd.(In Zhejiang).	(Note)	100%	0	0	(Note)	100%
Global PMX Co., Ltd.( In Jiaxing)	(Note)	100%	0	0	(Note)	100%

Note: Shares of non-limited companies are not issued; the Company’s investment is expressed in proportion to equity.

IV. Capital Overview

1. Capital and Shares

(1) Sources of Capital

i. The formation of capital

Unit: Thousand Shares: NT$

						Unit: Thousand Shares: NT$	Unit: Thousand Shares: NT$	Unit: Thousand Shares: NT$
Year/ Month	Par Value (NT$)	Authorized Capital		Paid-In Capital		Remarks
		Shares	Amount	Shares	Amount	Source of Capitals	Capital Increased by Assets Other than Cash	Other (Date of Approval, Preference Number)
February 1987	10	1,000	10,000	1,000	10,000	Establish- ment of share capital	None	Note 1
April 1995	10	5,000	50,000	5,000	50,000	Cash increase	None	Note 2
November 1997	10	10,000	100,000	10,000	100,000	Cash increase	None	Note 3
November 2011	20	65,000	1,500,000	65,000	650,000	Cash increase	None	Note 4
September 2013	25	150,000	1,500,000	75,000	750,000	Cash increase	None	Note 5
August 2015	63	150,000	1,500,000	83,000	830,000	Cash increase	None	Note 6
May 2016	-	150,000	1,500,000	81,934	819,340	Treasure stock retired	None	Note 7
April 2020	-	150,000	1,500,000	105,934	1,059,340	Issue new shares for share exchange	None	Note 8

Note 1：Approved by Municipal Government of Taipei government built No. 121418. Note 2：Cash increased by 40,000 thousand, Taipei Municipal Government Construction Bureau approved the case of 969317.

Note 3：Cash increased by 50,000 thousand, government built No. (86)126037 was approved.

Note 4：Cash increased by 550,000 thousand, government built No. 10001279430 was approved on December 13, 2011.
Note 5：Cash increased by 100,000 thousand, government built No. 10201209350 was approved on October 14, 2013.
Note 6：Cash increased by 80,000 thousand, government built No. 10401178660 was approved on August 31, 2015.
Note 7：Treasure stock retired by 1,066 thousand, case of 10501098320 was approved on May 11, 2016.

Note 8：Issue new shares by 24,000 thousand, case of 10901068070 was approved on May 25, 2020.

ii. Type of stock

As of April 24, 2020, Unit: Thousands

Type of Stock	Authorized Capital	Authorized Capital	Authorized Capital	Remarks
	Issued Share	Un-Issued Shares	Total
Registered common stock	105,934	44,066	150,000	15,000 thousand shares
				were reserved for the
				issuance of stock options.

iii. Information on shelf registration system: None.

(2) Shareholder Structure

As of April 24, 2020, Unit: Person: Shares: %

			Oh		Foreign Iii
Shareholder Structure Quantity	Government Agencies	Financial Institutions	ter Juridical Person	Individuals	nsttutons and Foreign Persons	Total
Number of shareholders	1	15	39	3,309	72	3,436
Shareholding	25,000	10,881,000	15,692,910	15,947,231	63,387,859	105,934,000
Holding percentage (%)	0.02	10.27	14.82	15.05	59.84	100.00

(3) Shareholding Distribution Status

i. Common stock

NT$10 Per Share

As of April 24, 2020

Class of Shareholding	Number of Shareholders	Shareholding	Percentage (%)
1 ~ 999	170	11,175	0.01
1,000 ~ 5,000	2,875	4,720,660	4.45
5,001 ~ 10,000	163	1,293,439	1.22
10,001 ~ 15,000	51	664,000	0.63
15,001 ~ 20,000	27	513,000	0.48
20,001 ~ 30,000	32	823,000	0.78
30,001 ~ 50,000	30	1,205,000	1.14
50,001 ~ 100,000	25	1,776,000	1.68
100,001 ~ 200,000	26	3,621,000	3.42
200,001 ~ 400,000	12	3,314,776	3.13
400,001 ~ 600,000	5	2,520,000	2.38
600,001 ~ 800,000	4	2,768,000	2.61
800,001 ~ 1,000,000	1	830,000	0.78
Over 1,000,001	15	81,873,950	77.29
Total	3,436	105,934,000	100.00

ii. Preferred stock: None

(4) Major Shareholders:

List all shareholders with a stake of 5 percent or greater, or the names of the top ten shareholders, specifying the number of shares and takes held by each shareholder on the list.

List all shareholders with a stake of 5 percent or greater, or the names of the top ten shareholders, specifying the number of shares and takes held by each shareholder on the list.	List all shareholders with a stake of 5 percent or greater, or the names of the top ten shareholders, specifying the number of shares and takes held by each shareholder on the list.	List all shareholders with a stake of 5 percent or greater, or the names of the top ten shareholders, specifying the number of shares and takes held by each shareholder on the list.
April 24,2020
Name of Major Shareholders	Shareholding	Percentage(%)
SIXXION PRECISION MACHINERY CO.,LTD. (Cayman Islands)	24,000,000	22.66
SIXXION PRECISION MACHINERY CO.,LTD.	12,256,900	11.57
NEW ALLIANCE GROUP LIMITED	5,386,600	5.08
ELMER LIMITED	5,376,700	5.08
ELNO TECHNOLOGY CO.,LTD	5,376,700	5.08
TMK Co.,Ltd	4,576,700	4.32
CATHAY LIFE INSURANCE CO.,LTD.	4,175,000	3.94
NEW GIANT LIMITED	4,165,700	3.93
FUBON LIFE INSURANCE CO.,LTD.	3,726,000	3.52
RICH ABUNDANT LIMITED	2,666,000	2.52

(5) Provide Share Prices for the Past 2 Fiscal Years, Together with the Company’s Net Worth Per Share, Earnings Per Share, Dividends Per Share, and Related Information

Unit: NT$, Share

Item	Year	Year	2018	2019	March 31, 2020
Market Price Per Share (Note1)	Highest		193.50	195.50	194.00
	Lowest		67.00	95.50	77.40
	Average		133.63		145.78
				137.83

Net Worth Per Share (Note 2)	Before distribution		35.35	37.97	38.59
	After distribution		32.25	(Note 8)	(Note 8)
Earnings Per Share	Weighted average shares		81,934,000 shares	81,934,000 shares	81,934,000 shares
	Net profit per share after tax(Note3)		6.10	7.6	0.88
Dividends Per Share	Cash dividends		3.10	(Note 8)	－
	Stock divid ends	Stock dividends appropriated from retained earnings	-	(Note 8)	－

		-	(Note 8)	－
	Accumulated undistributed dividends (Note 4)	-	(Note 8)	－
Return On Investment	Price / Earnings ratio (Note5)	21.91	18.14	－
	Price / Dividend ratio (Note 6)	43.11	(Note 8)	－
	Cash dividend yield rate (Note 7)	2.32	(Note 8)	－

＊If there is a surplus or additional paid-in capital to increase the capital allotment, the market price and cash dividend information adjusted retrospectively based on the number of shares to be issued shall be disclosed.
Note 1: The highest and lowest market prices of common stocks for each year are listed, and are calculated on the basis of the annual transaction value and volume.
Note 2: Please fill in the number of shares issued at the end of the year and the distribution according to the resolution of the shareholders’ meeting of next year.
Note 3: If there is a retroactive adjustment from stock dividends, the pre-adjustment and adjusted surplus per share shall be listed.
Note 4: Dividends that have not been issued in the current year are accrued to the issuer of the annual surplus; the accumulated undistributed dividends of the current year should be disclosed separately.
Note 5: Price / Earnings ratio = current year average closing price per share / earnings per share
Note 6: Price / Dividend ratio = current year average closing price per share / cash dividend per share
Note 7: Cash dividend yield rate = cash dividend per share/ current year average closing price per share
Note 8: The Company distributes cash dividends of NT$2.50 which is decided after the resolution of the shareholders’ meeting
Note 9: The net value per share and the earnings per share shall be filed in with the information of the account audited (reviewed) by the CPA in the most recent quarter of the annual report. The remaining fields shall be filled up to the date of publication of the annual report

(6) Company’s Dividend Policy and Implementation Status

i. Dividend policy provided in the Articles of Incorporation

Article 18 of the Company’s Association

If there is a surplus in the final accounts of the Company, the tax shall be paid to make up for the losses first, and second, 10 percent shall be reserved as statutory surplus reserve, but this is no longer necessary when the statutory surplus reserve has reached the total amount of capital of the Company, and in accordance with the law and the competent authorities, the special surplus reserve shall be increased or rotated. If there is a surplus still, the BOD shall prepare the Surplus distribution case with the previous annual accumulation of undistributed surplus to present in the shareholders’ meeting for resolution of distribution of shareholders' dividends and shareholder bonus. The company may authorize the distributable dividends and bonuses in whole or in part may be paid in cash after a resolution has been adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting.

The Company’s dividend policy is based on the Company’s future annual operating plan and the demand for funds. When the dividends are distributed, no less than 50% of the remaining amount of the net profit after tax of the current year, after covering the accumulative losses and setting aside the legal reserve and the special reserve. However, when the shareholder dividends is than NT$0.5, the surplus available for distribution may be retained and not distributed. The dividends shall be distributed in cash or sotcks, and cash dividends shall not be less than 50% of the total dividends. The amount shall be distributed after the resolution of shareholders’ meeting.

ii. Distribution of dividends at this fiscal year:

The proposed dividend of 2019 earning was NT$2.50 per share (Proposed cash dividend of NT$2.50 per share). After the approval of the shareholders’ meeting, the authorized chairman is to set a separate interest-bearing base date, which will be distributed by the number of shares held by shareholders on the base date.

(7) Effect upon Business Performance and Earnings Per Share of any Stock Dividend Distribution Proposed or Adopted at the Most Recent Shareholder’ Meeting:

The shareholders’ meeting approved the Earning Distribution of 2019 on March 23, 2020, which has no stock dividend, therefore there is not effect.

(8) Compensation of Employees, Directors, and Supervisors

i. Ratio or scope of compensation for employees, directors and supervisors, as set forth in the Company’s Articles of Incorporation:

The Company’s annual profit shall be distributed:

A. The proportion of the employees’ compensation shall not be less than 2%.
B. The proportion of the employees’ compensation shall not be higher than 2.24%.

The employee compensation aforementioned shall be a resolution made by the board of directors whether to issue shares or cash distribution. The issuance of the object contains a certain condition for the subsidiary employees.

However, when the Company still has accumulated losses, it shall retain the amount of compensation in advance, then distribute compensation to employees and directors according to the first ratio.

ii. The estimated amount of compensation for employees, directors and supervisors for the current period shall be calculated based on number of employee shares of stock considering any accounting discrepancy between the actual distributed amount and compensation for employee stock dividend and estimated figure:

The estimated amount of compensation for employees, directors and supervisors is calculated according to the Company’s Articles of Association. If there is any discrepancy between the actual distributed amount and compensation for employees, directors and supervisors, it shall be considered an accounting estimation, and shall be adjusted in the next year.

iii. Information on the amount of compensation for distribution and calculation of earnings per share as approved by the Board of Directors:

Information on the amount of compensation for distribution and calculation of earnings per share as approved by the board of directors on March 23, 2020, the amount and method of issuance are as follows:

A. The compensation of employees: NT$21,482,919, is issued in cash.
B. The compensation of directors: NT$10,781,390, is issued in cash.

C. The compensation of employees, directors and supervisors is distributed in the form of cash dividend or stock dividend. If there is any discrepancy between the actual distributed amount and figure, the difference, reason and response should be

disclosed: No difference.

D. The amount of stock dividend and ratio of the total net profit after-tax and individual employee compensation or separate financial report for the current period: None.
iv. The actual distribution of compensation for employees, directors and supervisors in the previous fiscal year (including number of shares, monetary amount, stock price, shares distributed) and any discrepancy between the actual distributed amount and amount of compensation for employees, directors, or supervisors. The discrepancy, cause, and response shall be stated:

The amount of compensation distributed in the previous fiscal year (2018) to employees was NT$18,463,189, and NT$9,265,913 to directors. There is no difference to the actual distribution of compensation.

(9) Share Repurchases: None.

2. Corporate Bonds:

Corporate Bonds

	Corporate Bonds
Corporate Bond Type	First Series Domestic Unsecured Convertible Corporate Bonds
Issue Date	February 5, 2018
Denomination	NT$ 100,000
Issuing and Transaction Location	TPEx
Issue Price	NT$100.5
Total Price	NT$1,500,000,000
Coupon Rate	0 %
Tenor	Three years Date of expiry: February5, 2021
Guarantee Agency	Not applicable
Consignee	Taipei Fubon bank
Underwriting Institution	Mega Securities
Certified Lawyer	Far East Law Offices Lawyer: Qiu Ya-Wen
Certified Public Accountant	Deloitte & Touche Taiwan CPAs: Weng, Roy& Chen Hui-Ming
Repayment Method	Except for the holder of convertible corporate bonds converting into common stocks of the Company in accordance with Article 10 of the measures, or redeem them before maturity in accordance with Article 18, or the Company is bought back by the securities firm’s business office and cancelled, when the Company’s convertible corporate bonds expires, the Company shall pay the bondholders the denomination of the bonds, plus interest compensation (100.75% of the denomination and 0.25% of the real rate of return) in cash.
Outstanding Principal	NT$1,500,000,000
Terms of Redemption or Advance Repayment	Please see the Company’s First Series Domestic Unsecured Convertible Corporate Bonds Issuance and conversion methods.
Restrictive Clause	None
Name of Credit Rating Agency, RatingDate, Ratingof	None

Corporate Bonds.	Corporate Bonds.
Other Rights Attached	As of the Printing Date of This Annual Report, Converted Amount of (Exchanged or Subscribed) Ordinary Shares, Gdrs or Other Securities	None
	Issuance and Conversion Method	Please see the Company’s First Series Domestic Unsecured Convertible Corporate Bonds Issuance and conversion methods.
Issuance and Conversion Exchange or Subscription Method, Issuing Condition Dilution, and Impact on ExistingShareholders’ Equity		The full conversion into the Company’s common stock based on the current conversion price of NT$158.20 which makes its maximum dilution ratio 8.95%, the impact on existing shareholders rights is limited.
Transfer Agent		Not available.

Information on Convertible Corporate Bond

Corporate Bond Type (Note 1)	Corporate Bond Type (Note 1)	First Series Domestic Unsecured Convertible Corporate Bonds	First Series Domestic Unsecured Convertible Corporate Bonds
Year	Item	2019	As of April 24, 2020
Market Price of the Convertible Bond Corporate Bond(Note 2)	Highest	119	124
	Lowest	96	99.05
	Average	107.69	109.76
Convertible Price		179	158.2
Issue Date and Conversion Price at Issuance		Issue date: February 5, 2018 Conversionprice at issuance: NT$193
Fulfilling the Conversion Obligation		By issuing of new shares

Note: The Company has been trading in TPEx since February 5, 2018.

3. Preferred Shares: None.

4. Global Depository Receipts (GDR): None.

5. Employee Stock Warrants: None.

6. New Restricted Employee Shares: None.

7. Status of New Shares Issuance in Connection with Mergers and

Acquisitions:

Status of share transfer and new shares issuance in connection with mergers acquisitions completed in the year and as of the date of publishing the Annual Report:

The Company has performed stock conversion and issued new shares with SIXXON PRECISION MACHINERY CO., LTD. on April 13, 2020, which was approved by the MOPS and effective on January 14, 2020, along with the document of Jin-Guan-Zheng No.1080342105. Moreover, it has completed the change registration as approved by the Ministry of Economic Affairs and effective on May 25, 2020, along with the document No.10901068070.

Unit: NT$ Thousands

No.10901068070.	No.10901068070.	Unit: NT$ Thousands
CompanyName		SIXXON PRECISION MACHINERY CO., LTD.,
Company Address		No. 6, Yu 3 Road, Youth Industrial District Taoyuan 326 Taiwan(R.O.C)
responsible persons		Lin Zheng-sheng
Capital stock		NT $ 300 million
Main business items		Automobile and related component manufacturing Electronic parts manufacturing Other mechanics manufacturing International trade
Main Produdts		Auto parts gearbox torque converters The High-end parts for shock absorbers of heavy motorcycles and bicycles Others
Financial information for the most recent fiscal year	Total assets	3,048,187
	Total liabilities	1,683,007
	Total equity	1,365,180
	Gross profit from operations	2,836,417
	Gross profit from operations	598,096
	Net operating income	386,055
	Profit	285,863
	Earnings per share (NT$)	9.53

8. The Status of Implementation of Capital Allocations Plans:

The Company’s first series domestic unsecured convertible corporate bond replenishment plan is as follows:

(1) Content of the Plan

i. The date and reference number of the authority approval: FSC No. 1060051431 was approved on January 17, 2018.
ii. Total funds required: NT$1,507,500 thousand.
iii. Source of funds for the fundraising plan: 15,000 domestic first series unsecured convertible corporate bonds were issued with a denomination of a hundred thousand each. The total issued amount was NT$1,500,000 thousand and was issued at 100.5% of the face value. The duration of issuance is three years.
iv. Progress on the use of planned projects and scheduled funds.

Unit: NT$ Thousands

			Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands
Planned Project	Expected Date of Completion	Total Funds Required	Progress on the Use of Scheduled Funds
			2018			2019
			Q2	Q3	Q4	Q1	Q2
Overseas Re-Investment	2019 Q2	1,507,500	807,500	60,000	210,000	360,000	70,000

(2) Execution

Unit: NT$ Thousands

Planned Project	Execution	Execution	2019 Q4	As of 2019 Q4
Overseas re-investment	Amount	Scheduled	0	1,507,500
		Actual	0	1,208,680
	Progress	Scheduled	0%	100.00%
		Actual	0%	80.18%
Total	Amount	Scheduled	0	1,507,500
		Actual	0	1,208,680
	Progress	Scheduled	0%	100.00%
		Actual	0%	80.18%

The Company raised NT$1,507,500 thousand from the first series domestic unsecured convertible corporate bond, and cumulated a total of NT$1,208,,680 thousand in the fourth quarter of 2019 of which paid for the bank loan of NT$607,500 thousand according to the execution plan. By paying the bank loans, it could increase long-term financial stability and improve financial flexibility as well as reducing the financial burden to improve the financial structure. It also reduces the dependence on banks, improve the flexibility of fund scheduling and reduce operational risks. Based on the original schedule, the plant is expected to be completed in the second quarter of the year 2019, but the plant is still under construction and the progress of its construction has not been completed as scheduled. Therefore, the acceptance and payment of the plant are expected to be completed in the fourth quarter of the year 2020, therefore the execution of the re-investment plan on Jiaxing Zhixing has fallen slightly behind, but the project is still in progress and there is no major event after evaluation.

(3) Execution Assessment

At present, the project has not been completed, and it is expected that the benefits will be apparent after the completion of execution of the funds.

V. Operational Highlights

1. Business Activities

(1) Business Scope

i. The main operational categories of the Company
CA01030 Iron and Steel Casting
CA01050 Iron and Steel Rolling, Drawing, and Extruding
CA01100 Aluminum Material Rolls over Extends and Crowding
CA01120 Copper Casting
CA01990 Other Non-ferrous Metal Basic Industries
CA02010 Metal Architectural Components Manufacturing
CA02050 Metal Valves Manufacturing
CC01080 Electronic Parts and Components Manufacturing
CD01030 Automotive and accessories manufacturing
CP01010 Hand Tool Manufacturing
CQ01010 Die Manufacturing
F106010 Wholesale of Ironware
F106030 Wholesale of Die
F113010 Wholesale of Machinery
F113030 Wholesale of Precision Instruments
F114030 Wholesale of Motor Vehicle Parts and Supplies
F119010 Wholesale of Electronic Materials
F206010 Retail Sale of Ironware
F206030 Retail Sale of Die
F213040 Retail Sale of Precision Instruments
F214030 Retail Sale of Motor Vehicle Parts and Supplies
F219010 Retail Sale of Electronic Materials
F401010 International Trade
ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

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ii. Operational proportion

Unit: NT$ Thousands, %

~~A~~ Year Item	2018	2018	2019	2019	2020 Q1	2020 Q1
	Amount	%	Amount	%	Amount	%
Automobile	3,234,327	73.09	3,585,934	71.52	626,027	63.78
~~.~~ Electronics	492,489	11.13	652,533	13.01	183,835	18.73
T Medical	561,802	12.70	682,695	13.62	143,953	14.67
h Other	136,221	3.08	92,936	1.85	27,731	2.82
e Total	4,424,839	100.00	5,014,098	100.00	981,546	100.00

Company’s current product (service) collections

B. New product (services) development projects

(a) Short-term plan: Continue with the top priority of the new production capacity verification of core components from customers, including dual-clutch parts, automotive power systems, safety systems, and etc., in the automotive industry. Along with the increase in mass production capacity.
(b) Medium-term plan: Research and develop the precision machinery components for hybrid electric vehicles with customers, which do not only continue to develop the diversity elements but also integrate high value-added processes, including multi-axis machining with the multi-station processing operation. To provide integrated processing service modules, including front-end stamping, forging, casting, injection molding, machined car, milling,

101

multi-axis and back-end surface treatment and assembly and other integrated service products. Which all of the above mentioned are all important development indicators of the Group.

(c) Long-term plan: To get into the important supply of electric vehicle precision components, integrate the new and different machine performances, develop more processing and assembly capabilities, and hope to provide more high value-added products for customers, and and the goal is to become a “World-class precision machinery leading factory”.

(2) Industry Overview

i. Industry status and development

The Group is mainly engaged in the manufacture and processing of precision metal components for automotive industry, hard disk drive, medical equipment industry and various industrial products. The Company has a diverse line of products which includes automotive brake safety systems, diesel fuel components, high-pressure pumps, hard disk precision parts, surgical-related medical parts, and semiconductor equipment flow controller systems. At present, the higher proportion of the business is in the automotive industry and hard disk drives. The medical equipment industry is one of the Group’s key development targets in the future, and the Group’s medical components account for an increasing proportion of business. The industry overview of the automotive industry, hard disk drives and medical equipment industry is as follows:

(a) Automotive industry

The automotive industry is the pillar industry of the national economy of United States, Japan, Germany and France, etc., and is one of the largest and most important industries in the world that accounts for a large proportion in the manufacturing industry. Automotive industry has great influence on industrial structure upgrade and development of related industries. The automotive industry can be divided into the automotive industry and the automobile parts industry, which can be divided into the following ten categories according to the industrial production

102

statistical classification (See Figure 1). The Group’s products are mainly automobile brake system, automotive engines and parts, steering systems and parts, and other automotive parts.

The automotive industry is a comprehensive industry of high precision, technology and high integration. The cycle of the development is long from initial market research, product development, manufacturing to final sales feedback, and the manufacturing process is complicated that involves various of extremely wide ranges, therefore the relevant components manufacturers need a variety of industries to cooperate with each other. Automotive parts are used by automotive manufacturers and automotive repairers to replace parts. The materials of automotive parts, such metal components and non-metal components supply various industries, including petrochemical, glass, steel, rubber, motor and electronics. Components are manufactured in a way which includes casting, stamping, forging, machining and heat treatment procedures, and it is required for the completed components to pass the quality inspection.

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Figure 1: Statistical classification of Industrial production in the automotive industry

==> picture [805 x 295] intentionally omitted <==

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

Automotive Industry
Whole automotive industry
Automotive component industry
Passenger Commercial
vehicle vehicle
Auto Car Automot Automot Automoti Car Bodywork Bodywork o Other
meter engine ive ive ve braking of buses and others automot
and suspensi steering electrical system ive parts
compon on system componen and parts
Comp Large Pick- Dual Medium ents transmis and parts ts
act cars up purpose to large sion
car truck car car systems
and
parts
----- End of picture text -----

Note: According to the classification of industrial production statistics; Source: Industrial Technology Research Institute (2017/04)

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Automotive component suppliers can be divided into OEM (Original Equipment Manufacturing) parts and AM (Aftermarket) parts, and in general, the aftermarket can be further divided into OES (Original Equipment Service) parts and IAM (Independent Aftermarket) parts. The former is the original parts used when returning to the car factory for repairing, whereas the latter is mostly the aftermarket spare parts for repairing or modifying (Figure 2). The original component markets changes are positively correlated with the overall production; the parts market of the after-sale service will be affected by total number of the cars and the age of the cars. The Group’s main target is the overseas automotive market, as well as cooperate with major automobile parts suppliers (Tier 1).

Figure 2: Classification of automotive components by sales market

==> picture [305 x 219] intentionally omitted <==

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

Automotive
Components
OEM OES After Market
Components Components (AM)
Tier 1
Components
Tier 2
Components
OBM ODM
Tier 3
Components Components
Components
----- End of picture text -----

Source: Industrial Technology Research Institute IEK, 2018

Global automotive industry

The automobile has become one of the indispensable products in our life and work, but the sales growth rate of global car has declined due to the impact of the China-US trade war. The situation of Taiwan’s market and the global market is detailed as below. In terms of Taiwan’s market, as

105

analyzed by the Industrial Technology Research Institute (IEK), due to the uncertainties of the global political and economic environment in 2018, such as the China-US trade war and the Brexit issue, the export orders of Taiwan showed weak demands. In addition, the export of the overall automotive industry in Taiwan was affected by the global layout strategies adjusted by the global parent factories. In the part of domestic sales, it was continuously suppressed by the imported cars. However, as the government continuously implemented the subsidy policies to promote the renewal of old cars, and major automobile manufacturers offered preferential schemes for car purchasing, the sales of new cars in the whole year was slightly declined by 2.14% only, which was estimated to decline dramatically. In 2019, Driven by the continuous launch of new car series of new car series and the increase in Electric vehicle sales in Taiwan’s automobile market, the total automobile sales will be about the same as the number in 2018 (refer to table 1).

Table 1. Taiwan’s Automobile Sales in Recent Years

Unit：unit、%

Year Sales	2015	2016	2017	2018	2019
Sales	420,775	439,585	444,626	435,131	439,836
Annual growth rate	—	4.47	1.15	(2.14)	1.08

Source: ARTC, Industrial Technology Research Institute IEK, 2019

According to MarkLines data center , the global automobile sales in 2018 reached approximately 95.6 million units, increased by 0.2% compared to 2017. In terms of the regional markets, the top 3 were China, Europe and the US, which accounted for 32.6%, 26.4% and 24.3% respectively. Although the demands in Europe and the US have declined, the automobile sales has still increased slightly. The sales in China was decreased by nearly 3%, which was the first time over the past 20 years. In the emerging markets such as South America and other regions in Asia, the sales keep ~~g~~ rowing continuously (refer to Table 3). The automobile markets in China and the US were affected by the

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China-US trade war in 2018, which led to a decline in overall sales if compared with previous year. In China's automobile market, it showed weak demands in the second half of the year due to the factors such as the adjustments to automobile subsidy policies, hot sales of second-hand cars, and increasingly stringent exhaust emission regulations. In the U.S. market, it showed lower demands on the whole due to the higher interest rate of automobile loans and higher tariff costs due to the trade war. In other growing markets including Brazil, Russia, and India, under the support of economic growth and the large number of population, the demands in 2018 were greatly increased, with the growth rate higher than 9%. In other major automobile markets in the Asia-Pacific region, such as Japan and South Korea, it showed slight growth (refer to Figure 3).

On the whole, as estimated by Fitch Ratings for the globally main automobile markets including China, Europe, the US, and etc., it wouldn’t show a great change in 2019 in each regional market under the slow growth of driving force. However, the overall automobile sales will be slightly reduced by about 3% as the main automobile markets of China and the US were affected by the China-US trade war, and the increasingly stringent trend of the global environmental protection policies (Refer to Figure 4).

Figure 3. Development trend of major countries in the global automotive market in 2018

Unit: 10,000 units

The US 1,783(1.0%) Canada 204(1.7%) France 268(3.4%) Spain 156(6.9%) England 273(6.1%) Brazil 257(14.6%)

==> picture [74 x 91] intentionally omitted <==

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

Germany
376(0.3%)
Italy 208(3.2%)
India 440(9.5%)
Russia 180(2.8%)
Mainland China
2,810(2.8%)
South Korea
181(1.1%)
----- End of picture text -----

Source: MarkLines , 2019; sorted by ARTC

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Figure 4. Estimation of global automotive market development trend

==> picture [321 x 176] intentionally omitted <==

Source: Fitch Ratings, OICA, Haver Analytics, 2019

b. Global automotive parts industry

The OE parts require relatively high quality and strict quality control. Plus the problem of transportation, the automobile parts manufacturers in Taiwan take up a high market share in the AM market, which supplies about 85%~90% of the parts in the global AM market. Among the main automobile parts produced in Taiwan, the automotive lights and components take up the largest proportion, accounting for 18.0%, followed by automotive transmission and suspension systems, accounting for 12.0%. The automotive electrical components take up the third place, accounting for 9.4% (Refer to Figure 5).

Figure 5: Amount and proportion of the automobile parts produced in Taiwan

==> picture [309 x 227] intentionally omitted <==

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

Automotive rim Large passenger Automotive
parts 6.4% car body 1.0% electrical equipment
and parts 9.4%
Automotive
steering system Truck and other
and parts 1.3%
car body 1.3%
Car engine and
components
Automotive 5.9%
lights and parts
18.0%
Automotive
transmission and
suspension
system 12.0%
Car braking
system and
parts 3.2%
Other automotive
parts 41.5%
----- End of picture text -----

108

Source: Accounting Office of Ministry of Economic Affairs, Industrial Technology Research Institute IEK, 2018

There are nearly 3,000 automobile parts manufacturers in Taiwan , with a complete of the industrial supply chain. This industry has the advantages of small quantity, great variety and flexible manufacturing. It has already gained international competitiveness after the manufacturers continuously make investment in research and development and improve production technology. It was estimated that the output of Taiwan’s automobile parts production would reach approximately NT $ 206.2 billion in 2018. However, in 2019, due to the slowdown in the sales growth of China’s automobile market and the restricted orders from the US and European markets, the annual growth rate was estimated to be slightly decreased by 1.5% compared with 2018. (Refer to Figure 6).

Figure 6: Overview and forecast of the value of automotive parts production in Taiwan

==> picture [364 x 184] intentionally omitted <==

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

Automobile parts production
(NT$ in million)
Growth rate (%)
Automobile parts production
Growth rate (%)
(NT$ in million)
----- End of picture text -----

Source: Statistics Department of Ministry of Economic Affairs,

Industrial Technology Research Institute IEK, 2018

Overall, the global automobile parts industry changes with the global market demand. The automobile sales in 2019 only declined slightly. Moreover, the increased sales in the second-hand car market year by year lead the possibility in need of repair will be increased accordingly. It is estimated that there will be more consumers to replace or repair cars, which will further promote the demands of for automotive components. In summary, the growth of the automotive components manufacturing industry will increase slightly in 2019 compared to

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(b) Hard disk drive industry

Hard Disk Drive (HDD) is one of the mediums for storing digital data. It is being widely used in recording devices and storage systems such as desktop computers, laptops, and external hard disk drive and PVR.

In the recent years, the hard disk drives have undergone frequent industrial consolidation. West Digital (WD) merged with Hitachi Global Storage Technologies (HGST), Seagate merged with the hard drive department of Samsung. And when Toshiba merged with the hard drive department of Fujitsu, resulting in WD, Seagate and Toshiba being the biggest suppliers in hard drive disk market. The hard drive disk components produced by Global PMX Company are mainly for Seagate. Seagate took up about 40% market share of the HDD market in the first three quarters of 2019, which was about 4% higher than WD ranked in the second place.

The development of hard disk drives originated from people’s need for storing data. With the increased storage technology of hard drives and the emergence of Solid-State Disk (SSD), HDD’s price per bit quickly fell, In terms of performance, SSD that emphasizes on high speed and high performance is superior to HDD. However, HDD featured by large capacity and high cost performance is still the standard equipment for traditional computers. According to the statistics released by Statista in 2019, the number of HDD shipments in 2018 was approximately 375.6 million units, a 6.96% decline compared to 2017 (Refer to Table 2). Although the number of HDD shipments has declined, the total Hard drive capacity has increased. According to Forbes statistics for 2018, the shipment of HDD is 763 million units, the prediction of Forbes suggests that the total amount of shipments in 2019 is 1,033 million units (Table 2), which shows a certain demand for HDD in the market. the fact that the shipment decreased in previous years. However, according to Forbes’s prediction, the total shipments capacity will reach 3,500 EB by 2024 (Figure 7) Based on Elinfor’s prediction, SSD’s shipments would not surpass HDD until the year of 2023 (Figure 8).

Table 2. HDD shipments and total capacity of the shipments 110

`Year` `Item`	2017	2018	2019 (e)	2019~2024 CAGR
Shipments (million units)	403.7	375.6	320.04	(5.5)%
Total capacity of shipments(EB)	689	763	1033	22.6%

Source: Statista, Forbes, 2019

Figure 7. Estimation of HDD and SSD shipments

==> picture [329 x 185] intentionally omitted <==

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

Shipments (million Total capacity of shipments
units) (EB)
(EB)
shipments
Total capacity of shipments
----- End of picture text -----

Source ： Statista, Forbes, 2019

Figure 8. Estimation of HDD and SSD shipments

==> picture [342 x 203] intentionally omitted <==

Source: Elinfor, 2019

In the recent years, many emerging services require the support

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of hard disk drives, including Cloud services, digital monitoring, medical imaging, transmission systems, log analysis and vast amount of data which all demand large amount of storage space. Hard disk drives have the advantages of low storage unit price and large storage capacity compared to SSD. The continuous growth of aforementioned industries is the source of sustaining the growth momentum of hard drive disks. However, the hard disk drive market has only grown very little due to the decline in bit price and the emergence of SSD.。

(c) Medical equipment industry overview

The medical equipment industry is crucial to our health. It is a necessary industry to help prevent, diagnose, slow down and treat people’s illness; as a result the fluctuations have very little effect on the industry. The global ageing population has increased with the coming of ageing society, and chronic diseases and people in emerging countries are in greater need of medical equipment which initiates many medical care and health care demands.

Based on the BMI Research market report, the medical equipment sub-field is divided into six categories: medical consumable products, diagnostic imaging products, dental products, orthopedics and implant products, auxiliary equipment and other medical equipment. The proportion of 2018 each field is detailed in Figure 7. Medical equipment are subject to inspection or be registered in accordance with the law by health authorities in order to fulfill the safety, reliability and efficiency of the products. Research and development of the medical equipment take a great length of time and requires product certification as well as clinical testing. Since the products are protected by having patents and certifications as well as the benefit of their long cycle of life after being successfully introduced into the market, they are of better profit than other industries. Therefore, medical equipment has become a target industry for domestic and foreign manufacturers.

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Figure 9. Overview of the Global distribution of medical equipment

==> picture [352 x 173] intentionally omitted <==

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

Medical
consumable
Other medical
devices s
Medical consumables
Diagnostic imaging
Dental products
Orthopedics and implant products
Diagnostic Auxiliary equipment
imaging Other medical devices
Auxiliary
equipment
Dental
Orthopedics and
products
implant products
----- End of picture text -----

Source: BMI 2018

According to the results of Trendforce survey (Figure 10), the global medical equipment market is predicted to grow by 5.3% in 2019, and the market would reach US$468 billion which shows that the market of medical equipment will maintain expanding. In terms of regions, the top three are the United States, Western Europe and the Asia-Pacific (Figure 11). The Americas has been the leader in medical equipment market for years and years which accounts for 48.7% of the global market, the reason of which being its mature medical insurance system and the fact that the majority of leading medical manufacturers are from the Americas. Europe regions accounts for 28.2% of the global market, with the topic of ageing society being an issue, it is expected to drive the growth of relevant medical care products. Asia-Pacific accounts for 20.6% of the global market and the mature market is leading by Japan but its growth is gradually slowing down. The future growth of Asia-Pacific market would depend on China or other emerging countries.

Figure 10. The market scale of global medical equipment

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==> picture [357 x 202] intentionally omitted <==

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

2018-2023 market scale and growth rate of
global medical equipment
Market scale Growth rate
----- End of picture text -----

Source: Trendforce, 2019

Figure 11. Global distribution of medical equipment In the region

==> picture [254 x 178] intentionally omitted <==

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

Europe
The Americas
Asia-Pacific region
Africa
----- End of picture text -----

Source: BMI Research, 2018

When China State Council proposed the manufacturing policies in "Made in China 2025", it clearly stated taking high-performance medical devices as one of the ten key development fields. In recent years, China’s government has also successively planned a series of supplementary policies such as the industrial preferential programs and guidance measures, so as to promote the healthy development of the medical device industry. Benefiting from the economic development and the steady increase of the elderly population, the Chinese show increasingly high demands for health. According to the statistics of Qianzhan Industrial Research Institute (Refer to Figure

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12), China's medical device market scale had reached RMB530 billion in 2018, which was expected to exceed RMB600 billion in 2019. During the next five years

(2019-2023), the CAGR will reach 14.4%. It is predicted that the China's medical device market scale will exceed trillion in RMB in 2023, and will account for about 25% of the global medical device market.

Figure 12. Prediction of China’s Medical Device Market Scale

Market scale (RMB 100 million)

Source: Qianzhan Industrial Research Institute, 2019

ii. Industrial relevance of upstream, midstream and downstream companies

The raw materials and related production equipment purchased by the Group to produce relevant products belong in the upstream of the industrial supply chain who mainly purchases various metal bars, including stainless steel bars, carbon steel bars, aluminum bars, copper bars and other metal bars. The midstream of industrial supply chain produces automobile parts, medical equipment components, semiconductor equipment flow controller systems, Cloud and high-capacity hard disk precision parts and metal parts for industrial and optical products. The components produced by Group are the key components for downstream companies and are used in a wide range of applications including automobiles, medical, semiconductor, and consumer electronics, industrial and optical products. The relevance of the industrial supply chain of upstream, midstream, and downstream

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companies is as follows

==> picture [365 x 215] intentionally omitted <==

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

Upstream Midstream Downstream
Raw materials:
Stainless steel bar
Carbon steel bar
Aluminum bar Automotive industry
Copper bar Medical industry
Other metal bars Precision metal Semiconductor
component industry
manufacturer Consumer electronics
industry
Industrial application
Optical industry
Equipment:
Lathe, milling
machine, machine
tools
----- End of picture text -----

iii. Various product development trends

A. High-precision automated production equipment

With the increasing requirements of product precision, the future of metal processing equipment will develop in ways towards high precision and automation. Rather than being high precision, high output, small footprint and lower manpower requirements, it shall also improve the quality and stability. In response to such trend, in recent years not only did the Group introduce dozens of precision milling machines of high horizontal and vertical rotary tables from Japan to fully save the waiting time on loading and unloading, the Group also imported high precision five-axis CNC milling machine from Germany DMG for the production of high-precision molds and high-precision medical products, which also helps the competition with European manufacturers.

B. Product quality development trends

Products such as automobiles, medical and electronics will develop towards high-tech and new-precision technologies which will make processing more difficult when selecting materials and the processing procedures will be more complex, such as milling/lathe/grinding/gear processing/heat treating/surface treatment etc. In the future, only

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manufacturers with comprehensive processing capabilities and high equipment investment shall be able to meet such requirements.

C. Development and application of new technologies

In recent years, many high-end equipment have been introduced into the market, including Swiss Tornos multi-axis (simultaneous processing of six-axis and eight-axis), German Mikron multi-station modular five-axis machines, Valve Piston automatic inspection machines, French BMI heat treatment equipment, German Dürr vacuum cleaners that adapt environmental-friendly solvents, Japanese robotic automated precision hard lathe. The equipment help improve production efficiency and product accuracy , but apart from having professional technicians and customer’s long-term support, high-end equipment also increases the entry threshold for high investment in equipment.

iv. Product competition

At present, a large number of companies are engaged in the production of precision metal parts whose products are being used in a vast range of industries like electronics, automotive and machinery. With the different products each industry develops and produces, it is difficult to get hold of relevant information of market share. By far, the Group’s main competitors in processing precision metal parts market are more or less using the same production procedures (lathe/milling, electroplating), and the market positioning and the customer bases are also different due to the fact that the machining process is extensive. Product quality varies depending on the main technologies (know how) and experiences, and the customers who are very demanding in terms of quality stability tend to trust qualified and cooperative suppliers. Most of the Group’s major customers are well-known large manufacturers, whose products and technologies are highly recognized, the Group has excellent advantage in comparison with other competitors.

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(3) Technology and R&D overview

i. Technical level and R&D status

A. Technical level

The Group is a manufacturer that makes various industrial precision metal parts such as automobiles, medical, hard drive disks, of which the main technology lie in the research and development of milling machines, turning and milling lathes, automatic lathes, grinding machines, etc. The main technical resources are based on engineering capabilities and years and years of experiences of the R&D team who actively establish technology development capabilities to implement technological autonomy. The team cultivates their own R&D talents to enhance their technical capabilities.

B. R&D status

(a) Continuously improve the production technology and process optimization of processed products to boost production efficiency and shorten the delivery time and reduce costs.
(b) Increase value to high-added value high-tech industries and eco-friendly green energy industrial products such as automobiles, medical supplies, semiconductors in order to reduce the proportion of auto parts with low traditional added value.
(c) To vertically integrate with important processes to enhance the capabilities and equipment inputs of front-end materials and back-end surface treatment to reduce the risk of external failure costs and significantly increase profitability.
(d) In addition to continuous precision processing technologies in the development of automation equipment and commitment to participate in the large-scale development of automobile manufacturers. The front-end design is settle to consider the needs of the process in order to achieve double the results with half the effort, and also contributes to self-development and the 118

improvement of design capabilities. Accordingly, in the future, the Company will gradually invest in R&D talents and automation equipment and fixtures according to the needs of customers.

(e) Work with the customer’s R&D center to develop high value-added process integration of disposable products for medical surgery, enhanced stamping, forging and multi-axis machining processes.

ii. R&D expense and the accomplishment in the product or technology development in the recent fiscal years

A. R&D expenses invested in the recent fiscal years

A. R&D expenses invested in the recent fiscal years	A. R&D expenses invested in the recent fiscal years	A. R&D expenses invested in the recent fiscal years
Unit: NT$ Thousands Year Item 2019 2020 till 31 of March R&D expenses 169,928 38,953
Year Item	2019	2020 till 31 of March
R&D expenses	169,928	38,953

B. Product and technology accomplishments in the recent fiscal

years

Year	Item or Accomplishment
2017	◎Products for customers automotive dual clutch transmission (DCT) was approved.
2018	◎Products for customers automotive Gasoline Direct Injection (GDI) Pump body part was approved. ◎Products for customers medical Powered Stapler was approved. ◎Products for customers medical Surgical Knife was approved.
2019	◎completed the mass production plan for GDI in-cylinder body of cars and hybrid vehicles

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(4) Long and short-term business development plans

i. Short-term business development plans

A. Fulfill the demands of current customers, actively strive for new orders, work hard on potential customers and fully cooperate with the required resources for the development of new customers.
B. Pursue the goal of zero customer complaints.

ii. Long-term business development plans

A. Reduce the proportion of traditional low Value-added auto parts, and increase high value-added industrial products such as automobiles (sensors), medical supplies, semiconductor, aerospace industry, high-tech industries and environmental green energy.
B. Reorganize the resources within the Group, reduce repeated personnel expenditures, and replace human-intensive processes and inspection with automation.
C. To vertically integrate with important processes to enhance the capabilities and equipment inputs of front-end materials and back-end surface treatment to reduce the risk of external failure cost and significantly increase profitability.
D. Strengthen the identification of employees and enhance the efficiency of decision-making and output.

All the cultivated talents ultimately require recognition of the Company; therefore, the Company shall continue to focus on the coherence of the employees to enhance their recognition of the Company’s future development and cultivate common values so that each employee can develop their own strengths that makes the Company’s decision-making and output more efficient.

E. Promote transparency and enhance external supervision

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Implement the Company’s internal supervision system, and by the disclosure of the Company’s information and financial statements, the market and investors will have a better understanding on the Company’s business philosophy, operation direction and financial quality. As a result the Company is able to gather feedback from the market and investors, which will enhance external supervision and strengthen the structure as well as improve the business development of the Company.

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2. Market and Sales Overview

(1) Market Analysis

i. Sales (Provided) region of the main product (Service)

			Unit: NT$ Thousands, %	Unit: NT$ Thousands, %	Unit: NT$ Thousands, %	Unit: NT$ Thousands, %
Sales Region
	2018		2019		2020 Q1

	Sales	Sales	Sales	Sales	Sales	Sales
	Amount	Proportion	Amount	Proportion	Amount	Proportion
Asia	2,883,336	65.17	3,407,055	67.95	599,966	61.12
The Americas	872,758	19.72	923,094	18.41	207,373	21.13
Europe	668,745	15.11	683,949	13.64	174,207	17.75
Total	4,424,839	100.00	5,014,098	100.00	981,546	100.00

ii. Market share

The Group is a manufacturer of precision metal components. Since the processed products produces by the Company are mostly the internal components that are used in industrial products such as automotive, medical equipment, semiconductor and industrial sectors, the market share is difficult to calculate. However, the Group’s philosophy has been serving the customers since establishment and the turnover has shown growth each year. As a result, the market share of the Company will target on the continuous growth of the Company business. It is estimated that the Group’s turnover will continue to grow as long as the demand for products in the automotive industry and the medical equipment industry continue to grow.

iii. Market supply and demand situation and future growth

A. Automotive industry

After the re-integration of the international auto industry and the merger of the alliance, the global auto supply chain is to face reorganization, reshuffle and other issues. It is foreseeable that

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international automakers will shift their purchasing focus to countries and regions with growing demand such as China and Asia Pacific.

Development trend of major countries in the global automotive market in 2018

Source: Marklines, 2019; sorted by ARTC

==> picture [313 x 163] intentionally omitted <==

In terms of regional markets, the regions such as Europe and the US achieved slight growth, while China declined slightly. In other growing markets including Brazil, Russia, and India, under the support of economic growth and the large number of population, the demands in 2018 were greatly increased, with the growth rate higher than 9%. In other major automobile markets in the Asia-Pacific region, such as Japan and South Korea, it showed slight growth (refer to the figure above). On the whole, as estimated by Fitch Ratings for the regional markets, it wouldn’t show a great change in 2019 in each regional market under the slow growth of the driving force. However, the overall automobile sales will be slightly reduced by about 3% as the main automobile markets of China and the US were affected by the China-US trade war, and the increasingly stringent trend of the global environmental protection policies.

Estimation of global automotive market development trend in 2018

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==> picture [369 x 200] intentionally omitted <==

Source: Fitch Ratings, OICA, Haver Analytics, 2019

B. Hard disk industry

The 2018 shipment of HDD is 375.6 million units, which is a 6.96% decline from 2017. Although the quantity of HDD shipment has decreased, but the hard drive capacity has increased reversely. According to Forbes statistics, the total hard disk drives capacity shipped in 2018 was 763 EB approximately, whereas 1,033 EB in 2019, which shows a certain demand for HDD in the market. According to Forbes prediction, the statistics showed that the capacity of shipments will reach 3,500 EB by 2024 even though the number of shipments have decreased.

In the recent years, many emerging services require the support of hard disk drives, including Cloud services, digital monitoring, medical imaging, transmission systems, log analysis and vast amount of data which all demand large amount of storage space. Compared with SSD, the HDD still has the advantages of low price for unit storage and high capacity. The continuous growth of aforementioned industries is the source of sustaining the growth momentum of hard drive disks. However, the hard disk drive market has only grown very little due to the decline in bit Unit price and the emergence of SSD.

C. Medical equipment industry

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According to the Trendforce survey, the global medical equipment market was expected to grow by 5.30% in 2019, with a market size of US$468 billion which indicates that the global medical equipment market shall continue to expand. Regarding the top three regions, there are Americas, Western Europe, and Asia Pacific.

With the steady growth of the global economy, the United States and countries with better economy in Western Europe which are Germany and France require continuous demand in the medical equipment market. In addition, the demand for medical materials in emerging markets countries such as China, Russia, Brazil, India and ASEAN continues to grow. China’s medical device market owns the greatest potential for growth. According to the statistics of Qianzhan Industrial Research Institute China's medical device market scale had reached RMB530 billion in 2018, which was expected to exceed RMB600 billion in 2019. During the next five years (2019-2023), the CAGR will reach 14.4%.

iv. Competitive niche

A. Independent research and development capabilities and complete line of after-sales (AM) products

The Company has gathered a wealth of process precision technologies and expertise while developing various ranges of components for customers for a long period of time. The company has been working for a long time with world’s leading automotive satellite factories, including Bosch, Continental, Delphi and Seagate which is a data storage equipment manufacturer. The Company has exceptional understanding of the key components and meets the needs of customers while cooperating with OEMs in order to complete the product line of the future AM market and invest in molds, fixtures and equipment to achieve economies of scale. The Group’s positive reputation for quality in the industries of automotive, medical, equipment, hard drive disks and other related products has been recognized, which not only enhances the product image but also improves the growth momentum of the Group’s revenue.

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B. Advantages and machining technology to shorten the time of development

The Group has always had close and good cooperative relationship with the suppliers and has formed an important supply system. Due to the large number of products the Group produces, other than considering the production equipment and production capacity of the Group, it also carries out comprehensive evaluations on the production capacity, production equipment and technology of all the subcontractors, and supplements the processing technology with the manufacturers through independent technological advantages. As a result, it will effectively shorten the product development schedule and increase the advantages of the listings of customers’ products, and the Group will have even closer relationship with customers and increase the advantages of competition.

C. The product quality has passed various certifications and has good reputation who customers trust

The Group has been certified with quality assurance certification such as ISO9002, QS9000, ISO/TS16949, ISO14001 and ISO13485. There are relevant procedures and operating standards to follow at all stages of development, manufacturing, quality inspection and sales. The quality system is audited by many international manufacturers and has positive achievements. The Group has been certified by numerous domestic and foreign auto parts manufacturers and has established long-term stable cooperative relations with internationally well-known brands. The quality of products is deeply trusted by customers, which is beneficial to the Group’s cross-industry business development.

D. Quality R&D team

The Group produces and processes precision metal components and the issue of having the lowest process cost, and the development of production quality optimization and stable process is one of the industry’s competitive niches. The Group has quality R&D team with a wealth of experience and achievements in designing and

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strengthening production processes, processing procedures and improving product yield. Therefore, the products have gained recognition and trust from customers in various industries internationally. At the present, approximately 80% of the Group’s current R&D team’s seniority has exceeded 10 years, and has a vast of relevant and complete experiences; therefore it’s one of the Group’s important competitive niches.

v. Favorable development prospects, unfavorable factors and countermeasures

Favorable factors

A. The application market demand of main products continue to grow

The situation with global economy is likely to last due to the European debt crisis, and the US credit rating being unstable. Europe and the United States are no longer the only major consumer markets in the world. The domestic demand markets in developing countries such as China and India are a source of global growth momentum, which makes a difference in the global automotive market. The auto market that had always been dominated by Europe and the United States has shown a sign of slow growth, and has been replaced with the development of demand in emerging markets, among which China has the best growth. With the increase of the average income of the Chinese, reduced car prices by car dealers in order to sell, the urbanization policy and the expected growth of car demand in China’s fourth-tier and fifth-tier cities, it is foreseeable that the demand for China’s auto market in the future will continue to grow, and the global auto market shall maintain at growth which will increase the demand in the automotive component market.

In addition to the growth of the automotive industry, the Group’s main product applications in the medical equipment market has grown steadily with the global economy. According to Trendforce estimation, the global market would reach US$468 billion in 2019, and medical equipment market shall maintain at growth.。It is also estimated that the

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global medical equipment market’s growth rate will reach 5.4% by 2023. Related to the HDD market industry, the HDD market appears to be pretty stable even though the shipments have decreased as the data presented by Forbes. The statistics showed that the capacity of shipments will reach 3,500 EB in 2024, and the overall demands are still gradually increasing. In summary, the expected demand of the Group’s industries is showing at growth which shall help the Group’s future plan of operational expansion.

B. Auto industry reduces the cost in response to competition and accelerates the release of orders

Due to the external environmental factors, automakers have gradually turned into a customer-oriented business style which will focus on product design and customer relationship management in the future, and that also suggests increase of outsourcing ratio. The chances for component suppliers undertaking automotive manufacturing are relatively high and it shall be beneficial to the future development of the Group.

C. Major customers are dispersed in various industries to reduce the impact of specific industries

The Group’s goal is cross-industry development, and customers in the same industry are being separated by components of different products in order to achieve the purposes of diversifying product portfolio and reducing risks. The main customers are dispersed in the automotive industry, semiconductor industry, medical industry, electronics industry and industrial applications, and the Group is capable of producing the key components required by any of the industries mentioned above. The Group has a good ability to adapt to specific industries owing to the dispersion of industries, and chances of turnover being affected by a single industry are lower, which is beneficial to the Group’s stable development.

D. Become a strategic supplier to world-class customers

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Continental, Bosch, Seagate, Delphi and BorgWarner are the Group’s major customers who have selected their long-term strategic suppliers under strict demands. The long-term strategic partnership with major customers is the biggest niche for Group growth. The Group has become a qualified supplier for many leading industrial manufacturers with long accumulated production technology and expertise (know how) which will help gain access to the supply chain of other leading manufacturers.

E. Increase of energy-saving demand

With the increase demand of energy-saving, the introduction of high-pressure pump and gasoline direct injection (GDI) of related products is the trend of new vehicles in the future. Because high-pressure pumping through gasoline improves dynamic response and increases intake efficiency, while GDI increases the instantaneous kinetic energy that can precisely control the gasoline injection, help the engine performance and improve the gasoline inefficiency problem which will lead to the goal of reducing carbon emission and saving energy. According to Markets Watch’s July 2019 estimation, the global GDI market scale had reached US $ 6 billion in 2018 and will reach US $ 14.5 billion in 2025, with the CAGR of 12.56%. Wherein, our new products including gasoline high-pressure pumps that are important GDI modules, will be increased with the global GDI demands which is beneficial to the future development of the Group.

Unfavorable factors and countermeasures

A. China’s processing level in the automotive industry is gradually improving

China’s manufacturers have successively purchased a large number of machinery and equipment in the auto parts industry, resulting in a rapid growth of relevant production capacity. In order to digest such amount of production capacity, the Chinese industry have adopted the strategy of selling for low prices which poses certain threats and pressures on the industry. The industry projects invested by China’s manufacturers

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mostly require lower processing level of production technology. Owing to the fact that automotive parts industry requires low level of technology, large-scale of equipment and large-scale production seems necessary in order to reduce the production cost. As a result, the excess of supply over demand leads the market to face an oversupply price competition.

Countermeasures:

The Group’s manufacturing technologies are brake systems, fuel injection nozzle systems and temperature control systems, and is continuing to innovate to avoid falling into price competition market. The Group has been in automotive parts industry for many years, with a wealth of experiences in production technology and excellent quality. The downstream customers are mostly well-known international automobile manufacturers or car satellite suppliers, and based on the brand reputation and the strict safety requirements of automotive industry, it is unlikely for the customers to change their suppliers. The Group is dedicated to the optimization of various products and the improvement of product quality, therefore the Group is different from the current positioning of the competitors in the markets and products. The Group also avoids the price competition of low-level products.

B. Raised wages in China and the cost of production increases

In recent years, the basic wages in China have noticeably risen, making the proportion of labor cost is gradually increased to the manufacturing cost, which has a direct impact on the gross profit of existing products.

Countermeasures:

The Group continuously improves the production process to enhance the pre-process yield, and through the Quick Response Quality Control (QRQC) to reduce the use of unnecessary manpower such as repeated inspection and heavy work as to improve the efficiency of production process and eliminate the pressure of rising wages. On the other hand, the Group has also increased the ratio of automated production by

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introducing automatic inspection machines, automatic feeding of centerless grinding machines, robotic arms and other equipment. By introducing automated production machinery to replace the manpower-intensive process, the product quality is stabilized to reduce labor and production costs.

C. Vicious price competition of general products

Industries with general products of low technical content are easier to enter and will finally fall into low price competition, which has a negative impact on the Company’s technical capabilities and positioning.

Countermeasures:

Reduce the proportion of traditional Low added value value automotive parts, and increase industrial products such as automobiles, medical supplies, semiconductors, aerospace industry, high-tech industries with high added value and eco green energy. In order to establish a high entry threshold, the Group keep developing new processes, such as research and development of new processes for hydrocarbon cleaning lines and vacuum carbonitriding heat treatment and purchase of high-end equipment, hoping to develop High added value products with high technical content that compete with European and American manufacturers.

(2) Usage and manufacturing processes for the company's main products

i. Usage for the company’s main products

The Group mainly manufactures and assembles products such as surgical, orthopedic and other related medical parts, automotive brake safety systems, fuel injection nozzle systems, temperature control systems, semiconductor equipment flow controller systems, Cloud and

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high-capacity hard disk precision parts, industrial and optical precision metal parts.

ii. Manufacturing processes for the company’s main products/services

==> picture [161 x 243] intentionally omitted <==

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

Feeding
Lathe
Milling
Surface treatment
Inspection
Packaging
----- End of picture text -----

(3) Supply situation for the company's major raw materials

Major Raw Materials	Supply Situation
Carbon steel bar	Good
Stainless steel bar	Good
Aluminum bar	Good
Brass bar	Good

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(4) A list of any suppliers and clients accounting for 10 percent or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each, and an explanation of the reason for increases or decreases as follows:

i. A list of any suppliers accounting for 10 percent or more of the company's total procurement amount in either of the 2 most recent

Unit: NT$ Thousands

									Unit: NT$Thousands	Unit: NT$Thousands	Unit: NT$Thousands	Unit: NT$Thousands
	2018				2019				2020Q1
Item	Company	Amount	Annual Net Purchase (%)	Relationship with Issuer							Annual Net Purchase (%)
							Annual Net	Relationship				Relationship
					Company	Amount			Company	Amount
							Purchase (%)	with Issuer				with Issuer


1	Sixxon	159,619	15.90	Other related parties	Dongguan Cogne	309,066	25.27	None	Sixxon	63,990	26.00	Other related parties
2	Deensheng	110,677	11.03	None	Sixxon	216,192	17.68	Other related parties	ZS Advanced	48,758	19.81	None
3					ZS Advanced	143,712	11.75	None	Dongguan Cogne	46,430	18.86	None
	Other	733,385	73.07		Other	554,061	45.30		Other	86,952	35.33
Total	Net purchase	1,003,681	100.00		Net purchase	1,223,031	100.00		Net purchase	246,130	100.00

Reason for changes：The 2019 results showed total number of suppliers with ten percent or more of the total number of purchases increased by two: ZS Advanced and Dongguan Cogne are our main supplier due to the increasing demand of raw materials.

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ii. A list of any clients accounting for 10 percent or more of the company's total sales amount in:

Unit: NT$ Thousands

	2018	2018	2018	2018		2019	2019	2019	2020Q1	2020Q1	2020Q1
Item	Company	Amount	Annual Net Purchase (%)	Relation- ship with Issuer			Annual Net	Relation-			Annual Net	Relation-
					Company	Amount	Purchase	ship with	Company	Amount	Purchase	ship with
							(%)	Issuer			(%)	Issuer
1	Bosch	862,209	19.49	None	Continental	958,894	19.12	None	Seagate	183,835	18.73	None
2	BorgWarner	809,281	18.29	None	BorgWarner	846,160	16.88	None	Bosch	171,403	17.46	None
3	Continental	702,679	15.88	None	Bosch	769,453	15.35	None	Continental	152,689	15.56	None
4	Seagate	492,489	11.13	None	Seagate	652,533	13.01	None	Delphi	124,757	12.71	None
5	Covidien	445,337	10.06	None	Delphi	609,309	12.15	None	Covidien	117,326	11.95	None
6					Covidien	527,487	10.52	None	BorgWarner	99,298	10.12	None
	Other	1,112,844	25.15		Other	650,262	12.97		Other	132,238	13.47
Total	Net sales	4,424,839	100.00		Net sales	5,014,098	100.00		Net sales	981,546	100.00

Reason for changes：Delphi automotive gasoline high-pressure pump products were produced in large quantities, mass-produced, which led to increased sales quantities in 2019.

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(5) An indication of the production volume for the 2 most recent fiscal years

Unit: NT$ Thousands, Thousands PCS

Year Output Major Products	2018	2018	2018	2019	2019	2019
	Capacity	Quantity	Amount
				Capacity	Quantity	Amount

Automotive	Note	136,671	2,556,082	Note	152,994	2,635,002
Electronics	Note	102,244	393,035	Note	95,248	510,166
Medical	Note	4,685	352,566	Note	3,837	267,069
Other	Note	456	52,658	Note	232	22,943
Total	Note	244,056	3,354,341	Note	252,311	3,435,180

Note：Since the products are all non-standard, only out and output valued is provided.

(6) An indication of the volume of units sold for the 2 most recent fiscal years

Unit: NT$ Thousands, Thousands PCS

Year Production Key products	2018	2018	2018	2018	2019	2019	2019	2019
	Domestic		Foreign		Domestic		Foreign
	Quan- tity	Amount	Quantity	Amount	Quan-
						Amount	Quantity	Amount
					tity

Automotive	－	－	134,867	3,234,327	－	－	140,719	3,585,934
Electronics	－	－	94,130	492,489	－	－	91,593	652,533
Medical	－	－	4,582	561,802	－	－	4,898	682,695
Other	－	－	498	136,221	－	－	491	92,936
Total	－	－	234,077	4,424,839	－	－	237,701	5,014,098

Reason for changes：The company continues to grow as many products for automotive components are entering into the mass production phase.

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3. The Number of Employees Employed for the 2 Most Recent Fiscal Years, and during the Current Fiscal Year up to the Date of Publication of the Annual Report, Their Average Years of Service, Average Age, and Educational Levels:

The numbers, average years of serivce, average age and educational levels of employees employed for the 2 most recent fiscal years

Unit: Persons, Age, Years

Year	Year	2018	2019	Ending 31 March, 2020
Number of Employees	Direct Staff	1,054	935	976
	Indirect Staff	821	932	891
	Total	1,875	1,867	1,867
Average Age		31.73	32.69	32.97
Average Years Of Service		3.88	4.02	4.12
Education Level Distribution Ratio	Ph.D	0%	0%	0%
	Masters	1%	1%	1%
	Bachelor’s Degree	23%	26%	24%
	Senior High School	42%	38%	38%
	Below Senior High School	34%	35%	37%

4. Disbursements for Environmental Protection

(1) Total losses (including damage awards) and fines for environmental pollution for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report, and an explanation of the measures (including corrective measures) and possible disbursements to be made in the future (including an estimate of losses, fines, and compensation resulting from any failure to adopt responsive measures, or if it is not possible to provide such an estimate, an explanation of the reason why it is not possible)

5. Labor Relations

(1) List any employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements

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and measures for preserving employees' rights and interests.

i. Employee welfare measures

With the intention to fully look after employees and protect their living condition, the Company provides or sponsors various welfare programs, and has established a staff welfare committee according to the law. The welfare committee is selected to manage various welfare measures, such as annual welfare budget and plans in order to use the employees’ benefits in a reasonable and effective manner. Staff welfare measures are also implemented for the subsidiaries overseas on a regular or irregular basis.

The main benefits of the Company’s internal welfare measures are as follows:

A. Birthday vouchers
B. Diverse activities organized by the welfare committee (employee trips / employee meals)
C. Allowance for weddings and funerals
D. Regular health check-ups
E. Employee group insurance and travel insurance
F. Holiday system in accordance with the law
G. Year-end bonuses
H. Dividends for those who have achieved excellent performance to share profit.
I. External training subsidy

ii. Continuing education and training

The Company and its subsidiaries regard their employees as important assets, value each of their talent and arrange professional on-the-job training courses and management courses for employees according to their functional needs which include: internal classes and occasional external training, integrating internal and external resources, and cultivating skills in a planned manner and train talents who will ultimately have abundant professional, yet challenging skills.

iii. Retirement system and the status of its implementation

A. For employees who are subject to the provisions of the Labor Standards Act, the Company deposits a 4% of their wages on a monthly basis to

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the Labor Pension Reserve Supervision Committee in a special account at the Bank of Taiwan.

B. Continuing to take to the Labor Standards Act pension provisions in accordance with the Labor Pension Statutes or retain the working years before the applicable Labor Pension Statutes, and the payment of the pension is based on the service years and the average wages for the six months prior to the approved retirement date.
C. For employees who are subject to the provisions of the Labor Pension Statutes, the Company shall deposit a 6% of the employee’s monthly wages to their pension account.
D. Subsidiaries are required to provide relevant retirement benefits in accordance with the laws and regulations of their countries and shall be acknowledged as current year expenses.

iv. Labor agreements

The Company and its subsidiaries value a great deal of internal communication. Other than organizing labor meetings and employee communication meetings, the internal of the Company also has various communication channels. The management and employees respect each other and provide suggestions for improvements who all work together for the Company’s growth. So far, labor relations have been harmonious, trust has been mutual and interaction has been exceptional. There has not been any need to coordinate due to labor disputes.

v. Maintenance of employee rights and interests

The requirements the Company and its subsidiaries have established are in accordance with the Government’s various labor laws and regulations. The-well established system sets out various managements practices, specifies the rights and obligations of employees and welfare projects, and regularly revises the contents of the system in order to protect employees’ rights.

(2) List any loss sustained as a result of labor disputes in the most recent fiscal year, and during the current fiscal year up to the date of publication of the annual report, disclose an estimate of losses incurred to date or likely to be incurred in the future, and indicate mitigation measures being or to be taken. If the loss cannot be reasonably estimated, make a statement to that effect. : The Group has always kept good relations

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with employees in the last 2 years and up to the date of publication of the annual report, there have not been any disputes

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6. Important Contracts:

Up to the date of publication of the annual report, the Company is still in good standing and holds supply and marketing contract due in the most recent year, technical cooperation contract, engineering contract, long-term loan contract and other important contracts that affect shareholders’ rights:

(1) Global PMX CO., Ltd.：

Type Of Contract	Party	Contract Duration	Contract Content	Restrictions
Building Lease Contract	Sixxon Precision Machinery Co.,Ltd.	September 1, 2018~August 31,2021	Lease	None
Share Exchange Agreement	Sixxon Precision Machinery Co Ltd. Cayman Islands)	September 30, 2019~ September 30, 2019	Share Exchange Agreement	None

(2) Global Advance Technology Limited：

(2) Globa	lAdvanceTechnolo	gy Limited：
Type Of Contract	Party	Contract Duration	Contract Content	Restrictions
Medium- Term Loan	E.Sun Commercial Bank	December 20, 2018 ~ December 20, 2021	Medium-term loan	None

3. Global PMX Co.,Ltd. (in Zhejiang)

Type Of Contract	Party	Contract Duration	Contract Content	Restrictions
Lease Contract	Shandong Rongtai Construction Engineering Group Co.,Ltd.	June 9, 2003 ~ June 8, 2053	Land Lease	None
Lease Contract	Shandong Rongtai Construction Engineering Group Co.,Ltd.	April 17, 2014 ~ April 16, 2064	Land Lease	None
Lease Contract	Shandong Rongtai Construction Engineering Group Co.,Ltd.	February 26, 2019 ~ February 25, 2069	Land Lease	None

Global PMX Co., Ltd. (in Jiaxing)

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Type Of Contract	Party	Contract Duration	Contract Content	Restrictions
Lease Contract	Jiaxing Bureau of Land and Resources	April 20, 2018 ~ April 19,2068	Land Lease	None
Construction contract	Shandong Rongtai Construction Engineering Group Co.,Ltd.	March 26, 2019 ~ September 16, 2020	Plant Construction	None
5. Seamax Manufacturing Pte., Ltd.(in Dongguan)
Type Of Contract	Party	Contract Duration	Contract Content	Restrictions
Lease Contract	Dongguan Bureau of Land and Resources	`August 4, 1997 ~` `August 3, 2047`	Land Lease	None

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VI. Financial Overview

1. Condensed Balance Sheets and Statements of Comprehensive Income for the Past 5 Fiscal Years, Showing the Name of the Certified Public Account Aand the Auditor’s Opinion Given Thereby

(1) Condensed Balance Sheets

i. Consolidated condensed balance sheet – Based on IFRS

Unit: NT$ Thousands

Year Item	Year Item						Current
		Financial Information in the Past 5 Year (Note 1)
							Financial


							Information
							Ending
		2015	2016	2017	2018	2019	March 31,
							2020
							(Note 3)
Current Assets					3,824,368	5,008,749	4,851,672
		2,515,281	2,498,974	2,686,797

Property, Plant and Equipment					3,386,168	3,489,369	3,454,751
		1,734,542	1,851,425	2,531,364

Intangible Assets		2,761	2,391	8,715	15,490	13,885	18,586
Other Assets		463,044	516,673	615,302	586,315	377,182	381,563
Total Assets		4,715,628	4,869,463	5,842,178	7,812,341	8,889,185	8,706,572
Current Liabilities	Before Distribu- tion	1,997,560	2,051,506	2,765,434	3,104,980	3,977,029	5,231,597
	After Distribu -tion	2,263,845	2,428,402	3,285,715	3,358,975	Note 4	Note 4
Non-Current Liabilities		84,839	113,047	169,263	1,810,872	1,800,838	313,053
Total Liabilities	Before Distribu- tion	2,082,399	2,164,553	2,934,697	4,915,852	5,777,867	5,544,650
	After Distribu -tion	2,348,684	2,541,449	3,454,978	5,169,847	Note 4	Note 4
Equity Attributable to Shareholders of the Parent		2,633,229	2,704,910	2,907,481	2,896,489	3,111,318	3,161,922
Capital Stock		830,000	819,340	819,340	819,340	819,340	819,340
Capital Surplus		1,124,255	1,064,002	1,064,002	1,107,664	1,107,664	1,107,664

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Retained Earnings	Before Distribu- tion	664,944	885,878	1,108,382	1,087,895	1,455,682	1,527,377
	After Distribu -tion	398,659	508,982	588,101	833,900	Note 4	Note 4
Other Equity Interest		84,943	(64,310)	(84,243)	(118,410)	(271,368)	(292,459)
Treasury Stock		(70,913)	－	－	－	－	－
Non-Controlling Interests		－	－	－	－	－	－
Total Equity	Before Distribu- tion	2,633,229	2,704,910	2,907,481	2,896,489	3,111,318	3,161,922
	After Distribu -tion	2,366,944	2,328,014	2,387,200	2,642,494	－	－

Note 1: Financial information for the last 5 years have been signed and checked by certified accountants.
Note 2: No revaluation has been processed in each year.
Note 3: As of the publication date of the annual report, the consolidated financial information was reviewed by the independent auditor in the previous quarter was the financial information on March 31, 2020.
Note 4: The annual surplus distribution of 2019 has not been resolved by the shareholders’ meeting, so the amount after the distribution is not listed.

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ii. Independent condensed balance sheet – Based on IFRS

Unit: NT$ Thousands

		Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands	Unit: NT$ Thousands
Year Item		Financial Information in the Past 5 Year (Note 1)
		2015	2016	2017	2018	2019
Current Assets		1,053,233	1,141,903	1,426,891	2,295,693	2,159,985
Investments Accounted for Using Equity Method		1,921,633	2,019,896	2,372,146	3,716,521	4,177,851
Property, Plant and Equipment		27,206	25,347	24,593	24,130	23,897
Intangible Assets		890	0	265	38	160
Other Assets		359	17,068	23,929	31,044	77,966
Total Assets		3,003,321	3,204,214	3,847,824	6,067,426	6,439,859
Current Liabilities	Before Distribution	296,205	399,408	776,192	1,459,671	1,534,090
	After Distribution	562,490	776,304	1,296,473	1,713,666	Note 4
Non-Current Liabilities		73,887	99,896	164,151	1,711,266	1,794,451
Total Liabilities	Before Distribution	370,092	499,304	940,343	3,170,937	3,328,541
	After Distribution	636,377	876,200	1,460,624	3,424,932	Note 4
Equity Attributable to Shareholders of the Parent		2,633,229	2,704,910	2,907,481	2,896,489	3,111,318
Capital Stock		830,000	819,340	819,340	819,340	819,340
Capital	Surplus	1,124,255	1,064,002	1,064,002	1,107,664	1,107,664
Retained Earnings	Before Distribution	664,944	885,878	1,108,382	1,087,895	1,455,682
	After Distribution	398,659	508,982	588,101	833,900	Note 4
Other	Equity	84,943	(64,310)	(84,243)	(118,410)	(271,368)
Treasury Stock		(70,913)	－	－	－	－
Non-Controlling Interests		－	－	－	－	－
Total Equity	Before Distribution	2,633,229	2,704,910	2,907,481	2,896,489	3,111,318
	After Distribution	2,366,944	2,328,014	2,387,200	2,642,494	Note 4

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Note 1: Financial information for the last 5 years have been signed and checked by certified accountants.
Note 2: No revaluation has been processed in each year.
Note 3: As of the publication date of the annual report, the consolidated financial information was reviewed by the independent auditor in the previous quarter was the financial information on March 31, 2020.
Note 4: The annual surplus distribution of 2019 has not been resolved by the shareholders’ meeting, so the amount after the distribution is not listed.

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(2) Condensed Statement of Comprehensive Income

i. Consolidated Condensed Statement of Comprehensive Income – Based on IFRS – International Financial Reporting Standards (Consolidated)

Unit: NT$ Thousands, Except for Earnings Per Share

Year Item						Current Financial Information Ending March 31, 2020 (Note 2)
	Financial Information in the Past 5 Year (Note 1)

	2015	2016	2017	2018
					2019

Operating Revenues	3,066,201	3,527,332	4,048,921		5,014,098	981,546
				4,424,839

Gross Profit	701,274	1,036,332	1,290,758	1,286,270	1,380,375	225,993
Income from Operations	403,547	716,934	876,958	819,064	898,134	101,853
Non-Operating Income and Expenses	(25,477)	(33,165)	(48,852)	(92,395)	(39,553)	(13,567)
Income Before Tax, Net	378,070	683,769	828,106	726,669	858,581	88,286
Continuing Operations Profit	291,548	487,746	599,673	499,709	622,427	71,695
Loss from Discontinued Operations	－	－	－	－	－	－
Net Income (Loss)	291,548	487,746	599,673	499,709	622,427	71,695
Other Comprehensive Income Profit After Income, Tax,Net	(47,589)	(149,780)	(20,206)	(34,082)	(153,603)	(21,091)
Total Comprehensive Income	243,959	337,966	579,467	465,627	468,824	50,604
Net Income Attributable to Shareholders of the Parent	291,548	487,746	599,673	499,709	622,427	71,695
Net Profit Attributable to Non-Controlling Interests	－	－	－	－	－	－
Comprehensive Income Attributable to Shareholders of the Parent	243,959	337,966	579,467	465,627	468,824	50,604
Comprehensive Income Attributable to Non-Controlling Interests	－	－	－	－	－	－
Earnings Per Share	3.74	5.96	7.32	6.10	7.60	0.88

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Note 1: Financial information for the last 5 years have been signed and checked by certified accountants.
Note 2: Financial information for the first quarter of 2020 has been checked by certified accountants.

ii. Independent condensed statement of comprehensive income – Based on IFRS

Unit: NT$ Thousands, Except for Earnings Per Share

	Unit: NT$ Thousands, Except for Earnings Per Share	Unit: NT$ Thousands, Except for Earnings Per Share	Unit: NT$ Thousands, Except for Earnings Per Share	Unit: NT$ Thousands, Except for Earnings Per Share	Unit: NT$ Thousands, Except for Earnings Per Share
Year Item	Financial Information in the Past 5 Year(Note 1,2)
	2015	2016	2017	2018	2019
OperatingRevenues	1,991,873	2,100,035	2,239,076	2,322,005	2,414,853
Gross Profit	400,947	467,490	548,291	566,855	623,709
Income from Operations	242,952	311,482	392,297	411,194	489,163
Non-Operating Income and Expenses	108,306	276,023	334,180	249,730	301,826
Income Before Tax,Net	351,258	587,505	726,477	660,924	790,989
Continuing Operation Profit	291,548	487,746	599,673	499,709	622,427
Loss from Discontinued Operations	－	－	－	－	－
Net Income(Loss)	291,548	487,746	599,673	499,709	622,427
Other Comprehensive Income Profit After Income, Tax, Net	(47,589)	(149,780)	(20,206)	(34,082)	(153,603)
Total Comprehensive Income	243,959	337,966	579,467	465,627	468,824
Net Income Attributable to Shareholders of the Parent	291,548	487,746	599,673	499,709	622,427
Net Profit Attributable to Non-Controlling Interests	－	－	－	－	－
Comprehensive Income Attributable to Shareholders of the Parent	243,959	337,966	579,467	465,627	468,824
Comprehensive Income Attributable to Non-Controlling Interests	－	－	－	－	－
Earnings Per Share	3.74	5.96	7.32	6.10	7.60

Note 1: Financial information for the last 5 years have been signed and checked by

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certified accountants.

Note 2: There is no financial report (independent) for the first quarter of 2020, therefore it is not available.

(3) The names of appointed certified public accounts and their audit opinions in the last 5 years

i. appointed Certified public accounts and their audit opinions in the last 5 years

Year	Name of accountingfirm	Name of CPA	Audit opinion
2019	Deloitte & Touche Taiwan	Weng, Roy Kuo, Frida N.	Unqualified opinion
2018 (Note 1)		Weng, Roy	Unqualified opinion
	Deloitte & Touche Taiwan
		Kuo,Frida N.

2017 (Note 1)		Weng, Roy	Unqualified opinion
	Deloitte & Touche Taiwan
		Chen Hui-Ming

2016		Li Li-Feng,	Unqualified opinion
	Deloitte & Touche Taiwan
		Chen Hui-Ming

2015		Li Li-Feng,	Unqualified opinion
	Deloitte & Touche Taiwan
		Chen Hui-Ming

Note 1: The reason for the Company’s accountant change was mainly due to the internal adjustment of the accounting firm.

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2. Financial Information in the Past 5 Years

(1) Financial analyses for the past five fiscal years and reasons for changes in financial ratios in the last two years

i. Consolidated financial analysis – Based on IFRS

Item	Year	Financial Information in the Past Five Years	Financial Information in the Past Five Years	Financial Information in the Past Five Years	Financial Information in the Past Five Years	Financial Information in the Past Five Years	Current Financial Infor- mation Ending March 31, 2020 (Note 3)
			(Note 1)
		2015	2016	2017	2018
						2019

Financial Structure (%)	Debt Ratio(%)	44.16	44.45	50.23	62.92	65.00	63.68
	Long-Term Capital to Property, Plant and Equipment Ratio(%)	151.81	146.10	114.86	131.75	140.77	100.59
Solvency (%)	Current Ratio(%)	125.92	121.81	97.16	123.17	125.94	92.74
	Quick Ratio(%)	88.95	94.34	70.15	91.92	103.18	76.47
	Interest Earned Ratio (Times)	33.50	38.22	59.68	18.70	17.30	8.28
Operating Performance	Average Collection Period	3.61	3.59	3.40	3.14	3.04	2.24
	Average Number of Days	101.10	101.67	107.35	116.24	120.06	162.94
	Inventory Turnover (Times)	4.06	5.07	5.60	4.76	5.02	4.56
	Average Accounts Payable Turnover	9.73	15.29	10.90	9.39	9.32	8.12
	Average Days in Sales	89.90	71.99	65.17	76.68	72.70	80.04
	Property, Plant and Equipment Turnover (Times)	1.80	1.97	1.85	1.50	1.46	1.13
	Total Assets Turnover (Times)	0.69	0.74	0.76	0.65	0.60	0.44
Profitability	Return on Total Assets (%)	6.79	10.50	11.42	7.80	7.96	3.70
	Return on Stockholders' Equity (%)	11.95	18.27	21.37	17.22	20.72	9.14
	Pre-Tax Income to Paid-In Capital(%)	45.55	83.45	101.07	88.69	104.79	10.78
	Profit Ratio(%)	9.51	13.83	14.81	11.29	12.41	7.30
	Earnings Per Share (NT$)	3.74	5.96	7.32	6.10	7.60	0.88
Cash Flow	Cash Flow Ratio(%)	11.74	41.83	25.97	20.27	21.84	2.26
	Cash Flow Adequacy Ratio(%)	65.33	79.33	64.07	50.66	57.69	61.05

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	Cash Flow Reinvestment Ratio(%)	-1.50	14.18	7.45	1.70	9.05	0.55
Leverage	OperatingLeverage	1.69	1.35	1.30	1.42	1.45	1.98
	Financial Leverage	1.03	1.03	1.02	1.05	1.06	1.14
Analysis of significant changes in financial ratios over the last two years (20% change): 1. Profitability Analysis: In the year 2019, the substantial increase in revenue and the reduction in foreign currency losses mainly caused the increase in profitability, which led to an increase in Return on Equity and Earnings per Share ratios. 2. Cash Flow Analysis: An increase of cash flow reinvestment ratio resulted from a decrease in the cash dividend.

Note 1: Financial information for the last 5 years have been signed and checked by certified accountants.
Note 2: Financial information for the first quarter of 2020 has been checked by certified accountants.

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ii. Independent Financial Analysis – Based on IFRS

Item	Year	Financial Information in the Past Five Years (Note 1,2)	Financial Information in the Past Five Years (Note 1,2)	Financial Information in the Past Five Years (Note 1,2)	Financial Information in the Past Five Years (Note 1,2)	Financial Information in the Past Five Years (Note 1,2)
		2015	2016	2017	2018	2019
Financial Structure (%)	Debt Ratio (%)	12.32	15.58	24.44	52.26	51.69
	Long-Term Capital to Property, Plant and Equipment Ratio (%)	9,678.85	10,671.52	11,822.39	18,106.79	20,528.81
Solvency (%)	Current Ratio (%)	355.58	285.90	183.83	157.27	140.80
	Quick Ratio (%)	320.54	252.49	158.96	149.59	134.44
	Interest Earned Ratio (Times)	2,929.15	1,559.37	601.89	42.11	39.49
Operating Performance	Average Collection Period (Times)	3.81	3.65	2.77	1.94	2.16
	Average Collection Days	96.05	100.00	131.76	188.14	168.98
	InventoryTurnover (Times)	16.47	26.09	40.67	34.21	24.21
	Average Accounts Payable Turnover (Times)	6.83	6.60	4.60	3.75	3.31
	Average Days in Sales	22.16	13.99	8.97	10.66	15.07
	Property, Plant and Equipment Turnover (Times)	64.12	79.92	89.67	95.31	100.56
	Total Assets Turnover (Times)	0.70	0.68	0.64	0.47	0.39
Profitability	Return on Total Assets (%)	10.24	15.72	17.04	10.34	10.22
	Return on Stockholders' Equity(%)	11.95	18.27	21.37	17.22	20.72
	Pre-Tax Income to Paid-In Capital (%)	42.32	71.70	88.67	80.67	96.54
	Profit Ratio (%)	14.64	23.23	26.78	21.52	25.77
	Earnings Per Share (NT$)	3.74	5.96	7.32	6.10	7.60
Cash Flow	Cash Flow Ratio (%)	7.44	81.93	0	17.15	55.59
	Cash Flow Adequacy Ratio (%)	100.67	112.62	64.29	41.68	82.73
	Cash Flow Reinvestment Ratio (%)	-9.79	2.17	-12.30	-5.87	12.36
Leverage	Operating Leverage	1.02	1.01	1.00	1.00	1.00
	Financial Leverage	1.00	1.00	1.00	1.04	1.04
Analysis of significant changes in financial ratios over the last two years (20% change): 1. Operating Performance Analysis: The customer order and the required amount of external

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warehouses were increased, the increase in inventory level led to a decreasing inventory turnover rate.
Profitability Analysis: The results from 2019 showed the growth of revenue and increased profits mainly caused the increase in Return on Equity and Earnings per Share ratios.
Cash Flow Analysis: the cash flow from operating activities increased and finding a rebound in cash flow ratio. The increase in cash flow ratio mainly due to the increase in cash from operating activity. The increase in cash flow reinvestment ratio resulted from an increase in cash from the operating activity and the distribution of cash dividend decreased.
- Note 1: Financial information for the last 5 years have been signed and checked by certified accountants.
- Note 2: There is no financial report (independent) for the first quarter of 2020, therefore it is not available.

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Note 3: The formula is as follows:

Financial Structure
(1) Debts Ratio = Total Liabilities / Total Assets.
(2) Long-Term Capital to Property, Plant and Equipment Ratio =
- (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment
Solvency
(1) Current Ratio = Current Assets / Current Liabilities.
(2) Quick Ratio = (Current Assets – Inventories – Prepaid Expenses) / Current Liabilities.
(3) Interest Earned Ratio (Times) = Earnings before Interest and Taxes / Interest Expenses.
Operating Performances
(1) Average Collection Period (Times) = Net Sales / Average Trade Receivables.
(2) Average Collection Days = 365 / Average Collection Turnover
(3) Inventory Turnover = Cost of Sales / Average Inventory.
(4) Average Accounts Payable Turnover = Cost of Sales / Average Trade Payables
(5) Average Days in Sales = 365 / Average Inventory Turnover
(6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment.
(7) Total Assets Turnover = Net Sales / Average Total Assets
Profitability
(1) Return on Total Assets = (Net income + Interest Expenses * (1 – Effective Tax Rate)) / Average Total Assets.
(2) Return on Stockholders’ Equity = Net Income / Average Total Shareholders’ Equity
(3) Pre-Tax Income to Paid-In Capital = Income before tax, net / Capital Stock
(4) Profit Ratio = Net Income / Net Sales
(5) Earnings Per Share = (Net Income Attributable to Shareholders of the Parent – Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding (Note4)
Cash Flow
(1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities
(2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend
(3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities – Cash Dividends) / (Gross Property Plant and Equipment – Long-term Investments + Other Noncurrent Assets + Working Capital) (Note 5)
Leverage
(1) Operating Leverage = (Net Sales – Variable Cost) / Income from Operations. (Note 6)
(2) Financial Leverage = Income from Operations / (Income from Operations – Interest Expenses).

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Note 4: The calculation of the earnings per share of the preceding paragraph shall pay special attention to the following:
Based on the weighted average number of ordinary shares, rather than the numbers of shares issued at the end of the year.
Where there is a cash replenishment or treasury stock trading, the weighted average number of shares shall be calculated during the period of circulation.
Where there is a surplus to capital increase or capital surplus to capital increase, the calculation of the earnings per share for the precious year and half-year should be adjusted by the proportion of capital increase, rather than the period the capital increase is issued.
If the preferred shares are non-convertible accumulative shares, its annual dividend (whether or not it is issued) shall be deductible from the net income or increased to net loss after tax. If the preferred shares are non-cumulative, then in case of having a net profit after tax, the preferred dividend should be deducted from the net profit after tax; in the case of having a net loss after tax, no adjustments are required.

Note 5: Cash flow analysis should pay special attention to the following:

Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.
Capital expenditure refers to the annual cash outflow of capital flows.
The increase in inventories shall only be credited when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory is reduced at the end of the year, then the inventory amount should be accounted at zero.
Cash dividends include cash dividends for common stock and special shares.
Net plant property and equipment means the total amount of property, plant and equipment before deducting accumulated depreciation.
Note 6: The issuer shall distinguish between the operating costs and operating expenses being fixed or variables. When involved in the estimation or subjective judgments, one should pay attention to its rationality and consistency.
Note 7: If the Company’s shares are no par or not in the denomination of NT$10, the calculation of the ratio of the paid-in capital shall be calculated based on the equity ratio of the balance sheet attributable to the owners of the parent company.

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3. Audit Committee’s Report for the Most Recent Year’S Financial Statement

Global PMX Co., Ltd.

Inspection Report of Audit Committee

The Board of Directors has prepared the Company’s 2019 Business Report, Financial Statements (including consolidated financial statements) and proposal for allocation of earnings. Of which, the financial statements (including consolidated financial statements) have been audited by the accountants of Deloitte & Touche Taiwan, who were appointed by the Board of Directors, and issued a verification report.

The aforementioned business report, financial statements (including consolidated financial statements) and allocation proposal have been approved by the Audit Committee and deem no inappropriateness. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the company act, we hereby submit this report. Please review.

To

2020 Annual Shareholders’ Meeting of Global PMX Co., Ltd.

Global PMX Co., Ltd.

Audit Committee Convener: Cai Jia-Yu

March 23, 2020

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4. Financial Statement for the Most Recent Fiscal Year:

Please see Attachement 1.

5. A Parent Company Only Financial Statement for the Most Recent

Fiscal Year, Certified by a CPA:

Please see Attachment 2.

6. If The Company or Its Affiliates Have Experienced Financial Difficulties in the Mort Recent Fiscal Year or During the Current Fiscal Year up to the Date of Publication of the Annual Report, the Annual Report shall Explain How Said Difficulties will Affect the Company’s Financial Situation: None.

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VII. A Review and Analysis of the Company’s Financial Position and Financial Performance, and a Listing of Risks

1. Financial Position

Unit: N$ Thousands

			Unit: N$ Thousands	Unit: N$ Thousands
Year Item	2018	2019	Difference
			Amount	％
Current Assets	3,824,368	5,008,749	1,184,381	30.97
Property, Plant and Equipment	3,386,168	3,489,369	103,201	3.05
Other Assets	601,805	391,067	(210,738)	(35.02)
Total Assets	7,812,341	8,889,185	1,076,844	13.78
Current Liabilities	3,104,980	3,977,029	872,049	28.09
Non-Current Liabilities	1,810,872	1,800,838	(10,034)	(0.55)
Total Liabilities	4,915,852	5,777,867	862,015	17.54
Capital Stock	819,340	819,340	0	0.00
Capital Surplus	1,107,664	1,107,664	0	0.00
Retained Earnings	1,087,895	1,455,682	367,787	33.81
Other Interests	(118,410)	(271,368)	(152,958)	129.18
Total Shareholders’ Equity	2,896,489	3,111,318	214,829	7.42
Analysis of significant changes over 20%: 1.Increase in current assets: The substantial growth in revenue, an increase in cash in banks and account receivables are the main causes. 2.Increase in current liabilities: Due to the working capital requirement and short-term borrowings increased. 3.Decrease in other assets: Due to the pre-payments for equipment decreased. 4. Increase in retained earnings: Due to profitability increased in 2019 and the distribution of cash dividend decreased in 2018. 5. Other equity: Mainlydue to the exchange differences of foreign financial statements.

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2. Financial Performance

(1) The annual report shall list the main reasons for any material change in operating revenues, operating income, or income before tax during the past 2 fiscal years, provide a sales volume forecast and the basis therefor, and describe the effect upon the company's financial operations as well as measures to be taken in response.

Unit: NT$ Thousands

Year Item	2018	2019	Increased (Decreased) Amount	% Change
Operating Revenues	4,424,839	5,014,098	589,259	13.32
Operating Cost	3,138,569	3,633,723	495,154	15.78
Gross Profit	1,286,270	1,380,375	94,105	7.32
Operating Expenses	467,206	482,241	15,035	3.22
Income for Operations	819,064	898,134	79,070	9.65
Non-Operating Income and Expenses	(92,395)	(39,553)	52,842	(57.19)
Incomes Before Tax, Net	726,669	858,581	131,912	18.15
Income Tax Expense	(226,960)	(236,154)	(9,194)	4.05
Net Income	499,709	622,427	122,718	24.56
Other Comprehensive Incomes Profit After Income Tax,Net	(34,082)	(153,603)	(119,521)	350.69
Current Total Comprehensive Income	465,627	468,824	3,197	0.69
Analysis of significant changes over 20%:
1. Non-operating income and expenses: A decrease in the number of exchange losses.
2. Current net profits: The results from 2019 showed the growth of revenues, a
reduction in foreign currency losses led to increased profits.
3. Other comprehensive income: Due to the exchange differences of foreign financial
statements.

158

(2) Sales volume forecast and the basis therefor, and describe the effect upon the company's financial operations as well as measures to be taken in response:
Based on the overall economic environment changes, business trends and the Company’s future development direction, and also have taken into account the operating objectives set by the Company’s recent operating profile, the Company expects that the business volume in the next year will grow from 2019 which will help increase the Company’s future revenue and profit.

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3. Cash Flow

(1) The annual report shall describe and analyze any cash flow changes during the most
recent fiscal year

			Unit: NT$ Thousands	Unit: NT$ Thousands
Year Item
			Increase (Decrease)
	2018	2019

			Amount	％

Operating Activities	629,287	868,562	239,275	38.02
Investing Activities	(1,335,734)	(455,611)	880,123	(65.89)
Financing Activities	1,472,674	484,011	(988,663)	(67.13)
Fluctuations in Exchange Rate	(4,086)	(18,595)	(14,509)	355.09
Increase in Net Cash Flow	762,141	878,367	116,226	15.25
Analysis of significant changes over 20%:
1. Operating activities: Net cash flow increased due to the growth of revenues and
profits.
2. Investment activities: Net cash flow decreased due to a decrease in property,
plant, and equipment.
3. Financial activities: Net cash flow decreased due to the issuance of convertible
corporate bonds in 2018 and the distribution of cash dividend
decreased.
4. Effect of changes in exchange rate: Due to exchange rate fluctuations in this
period.

(2) The plans to address any illiquidity problems: Not available.
(3) An analysis of cash liquidity for the coming fiscal year.

Unit: NT$ Thousands

			Unit: NT$ Thousands
Beginning Cash Balance (1) Cash Flow from Operating Activities (2)	Cash Flow from Investing & Financing Activities(3)	Cash Surplus (Deficit) Balance (1)+(2)+(3)	Cash Shortage ContingencyPlan Investment Plan Financing Plan
2,203,599 1,267,799	(923,260)	2,548,138	– –
Analysis of changes:
Cash flow variance analysis:
(1) Operating activities: Estimated net cash inflow from the operating activity

160

is NT$1,267,799 thousand, which is mainly caused by the net profit.

(2) Investment activities: Estimated net cash outflow is NT$923,260 thousand resulted from the continuous acquisition of fixed assets and the issuance of cash dividends.
(3) Remedial actions for cash shortfall: Not applicable.

4. The Impact of any Material Capital Expenditures over the Most Recent Fiscal Year upon the Financial and Operating Condition:

The Company purchased machinery equipment to increase the production capacity, in order to fulfill the demand of the customer’s new project orders, and the funds used were self-owned and bank loan, which have positive benefits for the overall financial business.

5. The Policy for the Most Recent Fiscal Year on Investments in other Companies, the Main Reasons for Profit/Losses Resulting Therefrom, Improvement, and Investment Plans for the Coming Fiscal Year:

December 31, 2019; Unit: NT$ Thousands

Name Of Company		2019	Main		Investment
				Improveme
	Investment Policy	Recognized	Reasons for		Plans for
		Investment	Profits or	nt Plans	the Coming
		(Loss) Gain	Losses		Year
FORTUNE TOWER HOLDING CO., LTD.		344,261	Profits attributed from subsidiaries are fully consolidated.	－	－
	General investment

SEAMAX INTERNATIONAL LTD.		60	Only served as a between-group transaction.	－	－
	Import and export of goods

161

ACE PLUS TECHNOLOGY LIMITED		(43)	Only served as a between-group transaction.
	Import and export of goods

SEAMAX MANUFACTURING PTE. LIMITED		94,961	Profits attributed from subsidiary, Seamax Manufacturing PTE Llimited. (in Dongguan), is consolidated.	－	－
	General investment

GLOBAL WIN LIMITED	General investment	2,884	Profits attributed from subsidiary, Global PMX Co.,Ltd. (in Dongguan), is consolidated.	－	－
GLOBAL ADVANCE TECHNOLOGY LIMITED	General investment	264,947	Profits attributed from subsidiary, Global PMX Co., Ltd (in Zhejiang), is consolidated.	－	－
SEAMAX MANUFACTURING PTE., LTD.(in Dongguan)	Production and sales of computer hard disk parts, industrial control components, precision die, mold standard parts, high-grade hardware, high-grade construction hardware, plumbing, heating products and hardware components, new types of electronic components, automotive key components, anti-lock brake system.	102,592	Operating revenue growth in 2019	－	－
GLOBAL PMX CO., LTD. (in Dongguan)	Production and sales of disk drive components, new types of electronic components, plumbing, heating products and hardware components, automotive key components, anti-lock brake system	1,536	The company made a resolution on liquidation with no substance operating at present resulted in decreased profitability.	－	In March 2020, the company obtained the approval of cancellation notice letter from the local government. The liquidation was completed as of March 31, 2020.

162

GLOBAL PMX CO., LTD. (in Zhejiang.)	Development, research, production and sales of various types of large-capacity optical, disk drives and their components, semiconductor components, new types of electronic components, digital cameras, precision online measuring instruments, precision die, mold standard parts and medical precision parts, automotiveprecisionparts.	274,635	Operating revenue growth in 2019	－	－
GLOBAL PMX CO., LTD. (in Jiaxing)	Development, research, production and sales of auto parts, general components, Class 1 medical equipment, computer software/hardware, R&D of electronic components	2,610	Initial stage

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6. The Section on Risks shall Analyze and Assess the Following Matters during the Most Recent Fiscal Year and as They Stood on the Date of Publication of the Annual Report:

(1) The effect upon the Company’s profits (losses) of interest and exchange rate fluctuations and changes in the inflation rate, and response measures to be taken in the future:
i. Change in interest rate

The interest revenue of the Group in 2017~2019 were NT$14,113 thousand, NT$41,064 thousand and 52,867 thousand respectively which accounted for 0.35%, 0.93% and 1.05%of the total net profit before tax and had little effect on the overall operation of the Group. The Group has built a good relationship with the bank for many years, with the Group’s financial stability and good credit standing, it is possible to obtain preferential interest rates and reduce interest expenses by negotiating with the bank. It is expected that the interest rates in the future will have no significant impact on the overall operation on the Group.

ii. Change in exchange rate

The Company’s previous exchange rate risk management and exchange gains (losses) in the last years and the first quarter of 2020

Unit: Thousands

		Unit: Thousands
Year		2020 Q1
	2019
Item

	(52,886)	(7,199)
Exchange Gains (Loss)

	5,014,098	981,546
Net Revenue

Exchange Gains or Losses / Net	(1.05)	(0.73)
Revenue(%)
	898,134	101,853
Operating Profit

Exchange Gains or Losses /	(5.89)	(7.07)
OperatingProfit(%)

In order to effectively reduce the impact of exchange rate changes on revenue and profit based on the fact that exchange rate fluctuations are difficult to estimate, other than collecting information on exchange rate changes, the following measures are also implemented to reduce the risks of exchange rate fluctuation.

(1) The Group’s currency for collection is mainly in US dollars and RMB. The payment of raw materials is also in US dollars and RMB. Using the characteristics of natural hedging, the cash collected in foreign currency from the sales revenue of export products shall be used to cover foreign

164

currency payables upon foreign purchases. Other than adopting natural hedging, the US dollar has more net positions and is a strong currency which can meet the demand for RMB funds. Use the forward foreign exchange contract as an appropriate measure to conduct safe-haven transactions in the foreign currency pre-sales in the purpose of reducing exchange rate risks.

(2) The financial unit strengthens information on changes in international exchange rates and maintains close contact with the foreign exchange department of financial institutions. It also collects relevant information on exchange rate at any time and fully grasps the trends in international exchange rates as well as spreading the risks to actively respond to the negative impact of fluctuations caused by exchange rates.
Concrete measures against exchange rate fluctuation:

iii. Effect on inflation

The Group is constantly aware of fluctuations in market prices. The main materials are customers’ designated suppliers. The Group adjusts the material prices and sales prices according to the increase cost of purchase due to inflation, as well as strengthen inventory control to improve the turnover rate in order to reduce the adverse effects of rising raw material prices.

(2) The Company’s policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and mitigation measures to be taken in the future:

i. The Company’s policy regarding high-risk investments, highly leveraged investments; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future:

The Group focuses on the development within the industry and does not invest in other high-risk industries. The Group has always adopted a Strong and stable financial management policy, therefore has not engaged in highly leveraged investments.

ii. The Company’s policy regarding loans to other parties, endorsements, guarantees, and derivatives transactions; the main reasons for the profits/losses generated thereby; and response measures to be taken in the future:

165

The Company has established the “Operational Procedures for Lending capital to others” “Operational Procedures for Endorsements and Guarantees” and “Acquisition and Disposal of Assets Procedures” as the bases for the Company and its subsidiaries’ operations. Among which the capital lending and guarantees endorsements only occurred within the group and all are based on the above-mentioned policies and response measures. In addition, the Group has not engaged in the trading of derivatives transactions, if there is demand in the future, the purpose of the transaction will be to avoid market risks caused by exchange rate fluctuations and interest rate fluctuations, and not to engage in arbitrage and speculation. Ultimately, the Company has always focused on the operations of the industry; therefore the relevant risks are limited.

(3) Research and development work to be carried out in the future, and further expenditures expected for research and development work:

The Group is a professional precision metal component processing manufacturer. The main technology lies in the development of milling machine, turning and milling compound automatic lathe, grinding machine and surface treatment. In addition to continue the deep involvement in core machining technology, the development of automation equipment and actively strive to work with large-scale development plans of automobile manufacturers, the design of the front end is based on the needs of the process in order to achieve twice the result with half the effort that also helps enhance self research and development and design capabilities. In the future, the Company will gradually introduce R&D talents and automation equipment and fixtures according to the needs of customers.

(4) Effect on the Company’s financial operations of important policies adopted and changes in the legal environment at home and abroad, and mitigation measures to be taken in response:

The Group’s operations are carried out in accordance with the established relevant procedures, and with relevant domestic and foreign laws and regulations. The Company’s operations in recent years have not been affected by major policies and regulations changes locally and internationally. The Company pays attention to amendments in domestic and international policies and regulations in order to fully comprehend changes in the legal environment. If major domestic and international policies and legal changes affect the Company’s affairs, lawyers, accountants and relevant professional units shall be consulted to evaluate, recommend and plan the response measures that comply with the law and reduce the financial adverse effects of the business whereas necessary.

(5) Effect on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response:

166

The Group’s main business projects are automotive brake safety systems, fuel injection systems, steering systems, thermos regulator systems, medical devices, semiconductor equipment flow controller systems, cloud and high-capacity hard disk precision parts, industrial and optical products, precision metal parts, etc.

The group will continue to pay attention to the technology, the development, and the changes related to its industry field. We will control the trend of the industry rapidly and promote the ability of the development. In this stage, the company’s financial operations have no significant impact derived from the developments in science and technology along with industrial changes.

(6) Effect on the Company’s crisis management of changes in the Company’s corporate image, and mitigation measures to be taken in response:

The Company has always followed the principle of professionalism and integrity, values the importance of corporate image and risk control. There are no foreseeable corporate crisis issues.

(7) Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken:

As approved upon the resolution of the board meeting held on September 30, 2019, the Company converted the stock by issuing new shares to acquire 100% shares of SIXXON PRECISION MACHINERY CO., LTD., which is detailed as below:

The Company and SIXXON PRECISION MACHINERY CO., LTD. (Hereinafter referred to as SIXXON) held the board meeting respectively for approval resolution on September 30, 2019. Later on November 19, 2019, the interim shareholder's meeting was held to pass the proposal of converting all shares issued by SIXXON through new share issuance. After the shares are converted, the Company will continue to be listed, and SIXXON will be incorporated into the management system of the Company. The share conversion ratio is that 1.25 shares of outstanding common stock of SIXXON is converted into 1 share of common stock issued by the Company. The share conversion reference date is April 13, 2020.

Through this acquisition, the Company is expected to expand its operating scale, enrich its product lines, enhance the customer base, and increase global competitiveness. It will firstly integrate the capacity of the Company and SIXXON to expand the business scale and reduce the management costs. Since the products and customers of the Company and SIXXON are quite different, it is expected to cover more customer clusters

167

through resource sharing. At the meantime, it will optimize the production technology of both parties to improve the product portfolios, and provide more complete product lines and services for downstream customers. The main production bases of the Company and SIXXON are located in China and Taiwan respectively. The increase in production bases is expected to increase the flexibility of capacity scheduling and effectively reduce the risk of supply chain concentration. Moreover, it can also purchase the raw materials and production equipment of the same properties uniformly, so as to improve the bargaining ability of purchases. Therefore, it can not only reduce the operating costs and risks, but also maximize the benefits in terms of financial planning and manpower utilization.

The Company has fully evaluated this share conversion plan in advance. With such investment plant, it hopes to effectively integrate resources and reduce the proportion of operating expenses. Moreover, it could strengthen operating leverage, improve profitability, and generate positive benefits for shareholder’s equity, which could further minimize the investment risk.

(8) Expected benefits and possible risks associated with any plant expansion and mitigation measures being or to e taken:

In order to meet the new project order demands of new and existing customers, the Group is planning to expand the plant to increase the production capacity scale in order to meet the new order demand. The plant expansion plan is based on the customer’s long-term purchase contract. The required funds shall be acquired from the Group’s own funds, bank borrowings and capital market financing, and judging from the current revenue growth and net interest rate of the Group, the risks shall not be high.

(9) Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken:

1. Purchases

The main materials used by the Group are from qualified suppliers who customers have verified. The relevant quality, supply, finance and management are in line with customers’ requirements. The remaining suppliers are long-term stable cooperation, whose product quality and supply stability are high and also deliver on time. The main raw materials are steel bars, aluminum bars, copper bars, etc., none of which are single source suppliers with the intention of reducing the risk of centralized procurement.

2. Sales

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The net sales of the top 3 sales customers in our company accounted for 15% to 19% of the annual net sales last two years, which show little change, so centralized sales didn't exist.

In addition to continuing to focus on maintaining the relationship with existing customers and products, the Company will strive to enter the supply chain of other industry’s leading manufacturers. Other than that, the Group aims to cross –industry development as much as possible, and customers in the same industry are separated by parts of each different product to achieve the purpose of diversifying product mix and reducing risks which is beneficial to the uncertainties of economic cycle.

(10) Effect upon and risk to the Company in the event a major quantity of share belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the Company has been transferred or has otherwise changed hands, and mitigation measures belong or to be taken:

The Company has six directors and three independent directors. The shareholdings are in compliance with the regulations of the competent authorities. In the recent years up to the publication of the annual report, the directors of the Company or the majority shareholders who hold more than 10% of the Company had made no significant transfer or replacement of shares.

(11) Effect upon and risks to Company associated with any change in governance personnel or top management, and mitigation measures being or to be taken: None
(12) Litigious and non-litigious matters, the directors, supervisors, general managers and substantial principals of the Company, the majority shareholders and affiliated companies with a shareholding ratio of more than 10% have been determined or are included in the lawsuit; non-litigation or administrative litigation results may have a significant effect on the Company’s shareholders’ equity or securities prices must be fully disclosed in detail and include the cost of litigation, date of commencement of proceedings, main litigants and the current situation up the date of publication of the annual report: None.
(13) Other important risks, and mitigation measures being or to be taken:

Description of the information security risk assessment:

The company is divided information system/security into four different authority and responsibilities.

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Management

Set up the electronic information system/security related regulations to serve as basic guidance for company personnel to follow.

Information system division
(1) Comply with the information system/security related regulations to execute operational tasks. In the case of new cyber security issues, amendments along with modification methods may be proposed at any time as a reference for management.
(2) Examine information appliance at any time
- A. Evaluate whether a hardware/firmware upgrade is necessary to perform.
- B .Evaluate whether a new machine should be purchased in order to prevent damage and loss caused by vulnerability threats.
- C. Implement the necessary warranty along with any spare parts that may be needed for important assets, and supplement safety precautions measures (such as UPS, etc.).
- D. Implement the precautionary measures to assess whether all important assets are easily destroyed or lost.
(3) Data preservation

According to the information system/security-related regulations, data preservation shall be authorized by authorities concerned.

Availabilities, conduct Disaster Recovery (DR) drills exercises at regular intervals.

Data access control, implement effective and regular preventive measures of inspections in order to prevent unauthorized access.

The LOG record is activated for every important information change in order to ascertain the correct type of event and be traceable to determine rights and responsibilities correctly,

Personnel authority can be adjusted or canceled immediately according to personnel changes.

(4) External information security issue

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The information system division keeps abreast of external news and threats information, and immediately implements preventive measures (such as firewall setting changes/firmware updates/software updates), as well as publish relevant information to company personnel for further.

3. Internal and external audit

The company has a complete internal and external auditing system, which is audited by an independent auditor or company personnel. For the regulations and related methods, the management team can put forward proposals for improvement at any time and may make checks considered necessary for each department.

4. Company personnel

The company conducts security training for employees occasionally and constantly announces guidance of the latest information security measures. As a consequent, the employees become fully aware of its received information and immediately report to the information system division if there is a suspicious affair (such as unknown mail/file/link). Encourage accountability by building collaboration among the information system division and other company personnel.

The company's operating model does not rely on digital marketing or online sales model (B2C / B2B), nevertheless, the cyber information risk could be minimized by preventing, institutionalizing, maneuvering reaction and conducting disaster recovery drills exercises. The security problem will not bring any difficulties or pauses towards the business operation of the company, nor lead any losses or damages to customers.

7. Other Imporatnt Matters: None.

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VIII. Special Disclosure

1. Information Related to the Company’s Affiliates

(1) Consolidated business report of affiliate Companies

i. Organizational chart of affiliate companies

==> picture [463 x 287] intentionally omitted <==

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

GLOBAL PMX CO.,
LTD.
100% 100% 100%
ACE PLUS SEAMAX
FORTUNE TOWER
TECHNOLOGY INTERNATIONAL
LIMITED. HOLDING CO., LTD. LTD.
100% 100% 100%
SEAMAX GLOBAL ADVANCE
GLOBAL WIN
MANUFACTURING TECHNOLOGY
LIMITED.
PTE.,LIMITED. LIMITED.
100% 100% 100% 100%
SEAMAX GLOBAL PMX CO., GLOBAL GLOBAL PMX
Dongguan Haiyi Machinery Parts Co., MANUFACTURING LTD. 浙江智泓科PMX CO., 嘉興智興科CO., LTD.
PTE., LTD.(IN DONGGUAN) (IN DONGGUAN) 技有限公司LTD. 技有限公司(IN JIAXING)
(IN ZHEJIANG)
----- End of picture text -----

Note: To integrate the Group's resources, save operating costs, and streamline

the investment structure, the Board passed a resolution during the meeting on March 25, 2019 to handle the liquidation and dissolution matters.

December 31, 2019

172

(2) Basic information of affiliate companies

December 31, 2019 Unit: NT$ Thousands

				December 31, 2019 Unit: NT$Thousands
Name of Company	Date of	Address
			Paid-In Capital	Type of Business
	Incorporation

FORTUNE TOWER HOLDING CO., LTD.		Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	2,990,017
	2011/11/18			General business

SEAMAX INTERNATIONAL LTD.		Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	28,995
	2011/03/07			Import and export of goods

ACE PLUS TECHNOLOGY LIMITED.		Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	1,564
	2016/05/11			Import and export of goods

SEAMAX MANUFACTURING PTE. LIMITED.		1501 Capital Centre ,151 Gloucester Road, Wan Chai,HongKong.	363,000
	2007/11/16			General business

GLOBAL WIN LIMITED.		Vistra Corporate Services Centre, Ground Floor NPF Building,	364,103
	2006/01/03			General business

173

		Beach Road, Apia, Samoa
GLOBAL ADVANCE TECHNOLOGY LIMITED.		Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	2,235,534
	2002/02/28			General business

SEAMAX MANUFACTURING PTE., LIMITED. ( In Dongguan)		No. 11, Jinfu Road, Huanan Industrial Park, Liaobu Town, Dongguan, Guangdong, China	359,046	Production and sales of computer hard disk
				parts, industrial control components, precision
				die, mold standard parts, high-grade hardware,
	1997/01/02			high grade construction hardware, plumbing,
				heating products and hardware components,
				new types of electronic components, automotive
				keycomponents,anti-lock brake system
GLOBAL PMX CO., LTD. (In Dongguan.)		Chukengdadi Industrial Park, Dongkeng Town, Dongguan, Guangdong Province, China	294,300
				Production and sales of disk drive components,
				new types of electronic components, plumbing,
	2006/12/19			heating products and hardware components,
				automotive key components, anti-lock brake
				system

GLOBAL PMX CO., LTD. (In Zhejiang.)		368 Baoqun Road, Industrial Park, Yaozhuang Town, Jiashan County, Zhejiang Province, China	1,459,120	Development, research, production and sales of various types of large-capacity optical, disk drives and their components, semiconductor components, new types of electronic components, digital cameras, precision online measuring instruments, precision die, mold standard parts and medical precision parts, automotiveprecisionparts
	2003/04/15

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GLOBAL PMX CO., LTD. (In Jiaxing)	2017/12/7	No.3339 Linggongtang Road, Nanhu District, Jiaxing City, Zhejiang Province,China	600,700	Research and development, production and sales of automotive parts, general-purpose parts, first-class medical equipment, computer hardware and software, electronic components technologydevelopment.

(3) Shareholders presumed to have a relationship of control and subordination: None.

(4) The industries covered by the business operated by the affiliates overall:

The business enterprise is the Company’s indirect expansion of the Mainland China market to provide services to customers.

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(5) Relationship between the directors, supervisors and general manager of the enterprise:

Relationship between the directors, supervisors and general manager of the enterprise:	Relationship between the directors, supervisors and general manager of the enterprise:	Relationship between the directors, supervisors and general manager of the enterprise:
			December 31, 2019 Unit: Thousand Shares: %
Company Name	Title	Name of Representative	Shares Owned
			Capital Contribution / Share	Percentage
FORTUNE TOWER HOLDING CO., LTD	Director	Global PMX Co., Ltd.	100,750	100﹪
SEAMAX INTERNATIONAL LTD.	Director	Global PMX Co., Ltd.	1,000	100﹪
ACE PLUS TECHNOLOGY LIMITED	Director	Global PMX Co., Ltd.	50	100%
SEAMAX MANUFACTURING PTE. LIMITED	Director	FORTUNE TOWER HOLDING CO., LTD / Lin Zheng-Sheng	12,200	100﹪
GLOBAL WIN LIMITED	Director	FORTUNE TOWER HOLDING CO., LTD	10,000	100﹪
GLOBAL ADVANCE TECHNOLOGY LIMITED	Director	FORTUNE TOWER HOLDING CO., LTD	72,750	100﹪
SEAMAX MANUFACTURING PTE., LIMITED.(In Dongguan)	Director	1501 Capital Centre ,151 Gloucester Road, Wan Chai, HongKong.	Note	Note
GLOBAL PMX CO., LTD. (In Dongguan.)	Director	Lin Zheng-Sheng / Lu Jing-Wei / Lin Zhong-Yong, Supervisor: Yan Rui-Quan	Note	Note
GLOBAL PMX CO., LTD. (In Zhejiang.)	Director	Lin Zheng-Sheng / Lu Jing-Wei / Lin Zhong-Yong, Supervisor: Yan Rui-Quan	Note	Note
GLOBAL PMX CO., LTD. (In Jiaxing)	Director	Lin Zheng-Sheng / Lu Jing-Wei / Lin Zhong-Yong, Supervisor: Yan Rui-Quan	Note	Note

Note: The Company is a limited Company; there are no shares.

176

(6) Operation status of affiliate companies:

Financial status and operation results of each affiliate company

December 31, 2019 Unit: NT$ Thousands

						Income		Earnings Per
	Capital		Total		Operating		Net Income
Company Name		Total Assets		Net Worth		from		Share (NT$)
	Stock		Liabilities		Revenues		(After tax)
						Operations		(After Tax)

FORTUNE TOWER HOLDING CO.,LTD	2,990,017	4,240,408	88,788	4,151,620	-	-12,426	347,859	3.45
SEAMAX INTERNATIONAL LTD.	28,995	436,801	406,238	30,563	1,351,595	66	60	0.06
ACE PLUS TECHNOLOGY LIMITED	1,564	260,083	258,728	1,355	519,872	-41	-43	-0.86
SEAMAX MANUFACTURING PTE. LIMITED	363,000	852,647	243,162	609,485	-	-120	94,961	7.78
GLOBAL WIN LIMITED	364,103	345,130	-	345,130	-	-29	2,884	0.29
GLOBAL ADVANCE TECHNOLOGY LIMITED	2,235,534	4,811,821	1,531,634	3,280,187	-	-247	264,947	3.64
SEAMAX MANUFACTURING PTE.,LIMITED.(In Dongguan)	359,046	1,144,528	292,782	851,746	1,027,924	111,743	102,592	N/A
GLOBAL PMX CO., LTD. (In Dongguan.)	294,300	308,783	27	308,756	1,237	-2,471	1,536	N/A
GLOBAL PMX CO.,LTD.(In	1,459,120	5,222,550	2,588,577	2,633,973	3,239,820	322,116	274,635	N/A

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Zhejiang.)
GLOBAL PMX CO., LTD. (In Jiaxing)	600,700	578,077	7,595	570,482	-	-6,022	2,610	N/A

(7) Consolidated financial statements of affiliated enterprises and consolidated financial statements：Please refer to P.178~P.256

(8) Consolidated business report of affiliated enterprises: Not available.
(9) Consolidated financial statements of affiliated enterprises: Not available.

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2. Transaction about the Company Has Carried Out Private Placement of Securities during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report: None.

3. Holding or Disposal of Shares in the Company by the Company’s Subsidiaries during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report: None.

4. Other Matters that Require Additional Description: None.

5. If any of the Situations Listed in Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act, Which Might Materially Affect Shareholders’ Equity or the Price of the Company’s Securities, has Occurred during the Most Recent Fiscal Year or during the Current Fiscal Year up to the Date of Publication of the Annual Report, such Situations shall be Listed One by One: None.

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Attachment 1: The Most Recent Year ’ s Financial Statement

*** These financial statements are translated from the traditional Chinese version and are unaudited by a CPA.**

Declaration of Consolidation of Financial Statements of Affiliates

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2019 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards 10 “Consolidated and Separate Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.

GLOBAL PMX CO., LTD.

Chairman: Lin Zheng-Sheng

March 23, 2020

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Independent Auditors' Report

The Board of Directors and Shareholders

Global PMX Co., Ltd.

Opinion

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

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Report by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2019 consolidated financial statements of Global PMX Co., Ltd. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s consolidated financial statements for the year ended December 31, 2019 are stated as follows:

Revenue Recognition

Sales revenue of automotive parts represented 72% of the consolidated total revenue of the Company and its subsidiaries for the year ended December 31, 2019. As the recognition of revenue from sales of auto parts has significant influences on presentation of financial statements, we consider it a key audit matter based on the materiality along with the guidance that Statements on Auditing Standards prescribes sales revenue as significant risk. Please refer to Note 4 (11) to consolidated financial statements for information on accounting policies relating to revenue recognition.

Below are our main audit procedures performed for revenue recognition:

Understood and tested the design and operating effectiveness of the internal controls over revenue recognition from specific sales customer.
Sampled and inspected the receivable records of the specific sales customer aforementioned, selected the appropriate sample to examine the external supporting source documents, to verify whether the sales transaction actually occurred.
Inspected balance sheet to ascertain whether there have been any material sales returns or allowances in the current period and the subsequent period, and, if so, inquire about the reason and find out whether they have been adequately presented.

Other Matter

We have also audited the parent company only financial statements of Global PMX Co., Ltd. as of and for the years ended December 31, 2019 and 2018 on which we have issued an unmodified opinion.

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Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

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

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be

184

communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

*** These financial statements are translated from the traditional Chinese version and are unaudited by a CPA.**

The engagement partners on the audit resulting in this independent auditors’ report are Weng, Roy and Kuo, Frida N.

Reference number of the FSC approval letter,

Order no. Financial-Supervisory-Securities-Auditing-1010028123 of the Financial Supervisory Commission

Reference number of the FSC approval letter,

Order no. Financial-Supervisory-Securities-Auditing-1070323246 of the Financial Supervisory Commission

Deloitte & Touche

Taipei, Taiwan Republic of China March 23, 2020

185

Global PMX Co., Ltd. and Subsidiaries Consolidated Balance Sheet As of December 31, 2019 and 2018

C o d e 1100 1150 1170 1180 1200 1210 1220 130X 1410 1470 11XX 1510 1600 1755 1801 1840 1915 1920 1985 15XX 1XXX C o d e 2100 2170 2180 2219 2220 2230 2399 21XX 2530 2540 2640 2645 2570 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3XXX	Assets Current assets Cash and cash equivalents（Notes 6） Notes receivable, net（Notes 8） Accounts receivable, net（Notes 8） Accounts receivable due from related parties, net（Notes 8 and 28） Other receivables（Notes 8） Other receivables due from related parties（Notes 8 and 28） Current tax assets（Notes 23） Current inventories（Notes 9） Prepayments（Notes 14） Other current assets（Notes 14 and 29） Total current assets Non-current assets Non-current financial assets at fair value through profit or loss （Notes 7） Property, plant and equipment（Notes 11, 28 and 30） Right-of-use assets（Notes 12） Computer software, net（Notes 13） Deferred tax assets（Notes 23） Prepayments for business facilities（Notes 14） Guarantee deposits paid（Notes 14 and 28） Long-term lease prepayments（Notes 14 and 29) Total non-current assets Total assets Liabilities and equity Current liabilities Current borrowings（Notes 15） Accounts payable（Notes 17） Accounts payable to related parties（Notes 17 and 28） Other payables（Notes 18） Other payables to related parties（Notes 18 and 28） Current tax liabilities（Notes 23） Other current liabilities（Notes 18） Total current liabilities Non-current liabilities Bonds payable（Notes 16） Non-current portion of non-current borrowings（Notes 15） Net defined benefit liability, non-current（Notes 19） Guarantee deposits received（Notes 18） Deferred tax liabilities（Notes 23） Total non-current liabilities Total liabilities Equity attributable to owners of parent（Notes 20） Share capital Ordinary share Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity interest Total equity Total liabilities and equity		In Thousands of New Taiwan Dollars December31,2019 December31,2018 m o u n t ％ A m o u n t ％ $ 2,203,599 25 $ 1,325,232 17 76,886 1 14,321 - 1,735,182 20 1,458,285 19 27 - 16,330 - 32,421 - 35,279 - 8,267 - 26 - 18,185 - 1,076 - 696,050 8 750,717 10 209,260 2 219,400 3 28,872 - 3,702 - 5,008,749 56 3,824,368 49 1,050 - 600 - 3,489,369 39 3,386,168 43 157,540 2 - - 13,885 15,490 - 86,806 1 46,322 1 130,633 2 365,429 5 1,153 - 15,784 - - - 158,180 2 3,880,436 44 3,987,973 51 $ 8,889,185 100 $ 7,812,341 100 $ 2,660,798 30 $ 1,830,644 23 356,644 4 285,617 4 78,517 1 59,301 1 808,740 9 838,290 11 348 - 12,438 - 67,715 1 73,017 1 4,267 - 5,673 - 3,977,029 45 3,104,980 40 1,485,631 17 1,472,679 19 - - 92,145 1 5,425 - 4,775 - 86 - 89 - 309,696 3 241,184 3 1,800,838 20 1,810,872 23 5,777,867 65 4,915,852 63 819,340 9 819,340 11 1,107,664 13 1,107,664 14 267,650 3 217,679 3 118,410 1 84,243 1 1,069,622 12 785,973 10 1,455,682 16 1,087,895 14 271,368) ( 3) ( 118,410) ( 2) 3,111,318 35 2,896,489 37 $ 8,889,185 100 $ 7,812,341 100	In Thousands of New Taiwan Dollars December31,2019 December31,2018 m o u n t ％ A m o u n t ％ $ 2,203,599 25 $ 1,325,232 17 76,886 1 14,321 - 1,735,182 20 1,458,285 19 27 - 16,330 - 32,421 - 35,279 - 8,267 - 26 - 18,185 - 1,076 - 696,050 8 750,717 10 209,260 2 219,400 3 28,872 - 3,702 - 5,008,749 56 3,824,368 49 1,050 - 600 - 3,489,369 39 3,386,168 43 157,540 2 - - 13,885 15,490 - 86,806 1 46,322 1 130,633 2 365,429 5 1,153 - 15,784 - - - 158,180 2 3,880,436 44 3,987,973 51 $ 8,889,185 100 $ 7,812,341 100 $ 2,660,798 30 $ 1,830,644 23 356,644 4 285,617 4 78,517 1 59,301 1 808,740 9 838,290 11 348 - 12,438 - 67,715 1 73,017 1 4,267 - 5,673 - 3,977,029 45 3,104,980 40 1,485,631 17 1,472,679 19 - - 92,145 1 5,425 - 4,775 - 86 - 89 - 309,696 3 241,184 3 1,800,838 20 1,810,872 23 5,777,867 65 4,915,852 63 819,340 9 819,340 11 1,107,664 13 1,107,664 14 267,650 3 217,679 3 118,410 1 84,243 1 1,069,622 12 785,973 10 1,455,682 16 1,087,895 14 271,368) ( 3) ( 118,410) ( 2) 3,111,318 35 2,896,489 37 $ 8,889,185 100 $ 7,812,341 100	In Thousands of New Taiwan Dollars December31,2019 December31,2018 m o u n t ％ A m o u n t ％ $ 2,203,599 25 $ 1,325,232 17 76,886 1 14,321 - 1,735,182 20 1,458,285 19 27 - 16,330 - 32,421 - 35,279 - 8,267 - 26 - 18,185 - 1,076 - 696,050 8 750,717 10 209,260 2 219,400 3 28,872 - 3,702 - 5,008,749 56 3,824,368 49 1,050 - 600 - 3,489,369 39 3,386,168 43 157,540 2 - - 13,885 15,490 - 86,806 1 46,322 1 130,633 2 365,429 5 1,153 - 15,784 - - - 158,180 2 3,880,436 44 3,987,973 51 $ 8,889,185 100 $ 7,812,341 100 $ 2,660,798 30 $ 1,830,644 23 356,644 4 285,617 4 78,517 1 59,301 1 808,740 9 838,290 11 348 - 12,438 - 67,715 1 73,017 1 4,267 - 5,673 - 3,977,029 45 3,104,980 40 1,485,631 17 1,472,679 19 - - 92,145 1 5,425 - 4,775 - 86 - 89 - 309,696 3 241,184 3 1,800,838 20 1,810,872 23 5,777,867 65 4,915,852 63 819,340 9 819,340 11 1,107,664 13 1,107,664 14 267,650 3 217,679 3 118,410 1 84,243 1 1,069,622 12 785,973 10 1,455,682 16 1,087,895 14 271,368) ( 3) ( 118,410) ( 2) 3,111,318 35 2,896,489 37 $ 8,889,185 100 $ 7,812,341 100	In Thousands of New Taiwan Dollars December31,2019 December31,2018 m o u n t ％ A m o u n t ％ $ 2,203,599 25 $ 1,325,232 17 76,886 1 14,321 - 1,735,182 20 1,458,285 19 27 - 16,330 - 32,421 - 35,279 - 8,267 - 26 - 18,185 - 1,076 - 696,050 8 750,717 10 209,260 2 219,400 3 28,872 - 3,702 - 5,008,749 56 3,824,368 49 1,050 - 600 - 3,489,369 39 3,386,168 43 157,540 2 - - 13,885 15,490 - 86,806 1 46,322 1 130,633 2 365,429 5 1,153 - 15,784 - - - 158,180 2 3,880,436 44 3,987,973 51 $ 8,889,185 100 $ 7,812,341 100 $ 2,660,798 30 $ 1,830,644 23 356,644 4 285,617 4 78,517 1 59,301 1 808,740 9 838,290 11 348 - 12,438 - 67,715 1 73,017 1 4,267 - 5,673 - 3,977,029 45 3,104,980 40 1,485,631 17 1,472,679 19 - - 92,145 1 5,425 - 4,775 - 86 - 89 - 309,696 3 241,184 3 1,800,838 20 1,810,872 23 5,777,867 65 4,915,852 63 819,340 9 819,340 11 1,107,664 13 1,107,664 14 267,650 3 217,679 3 118,410 1 84,243 1 1,069,622 12 785,973 10 1,455,682 16 1,087,895 14 271,368) ( 3) ( 118,410) ( 2) 3,111,318 35 2,896,489 37 $ 8,889,185 100 $ 7,812,341 100	In Thousands of New Taiwan Dollars December31,2019 December31,2018 m o u n t ％ A m o u n t ％ $ 2,203,599 25 $ 1,325,232 17 76,886 1 14,321 - 1,735,182 20 1,458,285 19 27 - 16,330 - 32,421 - 35,279 - 8,267 - 26 - 18,185 - 1,076 - 696,050 8 750,717 10 209,260 2 219,400 3 28,872 - 3,702 - 5,008,749 56 3,824,368 49 1,050 - 600 - 3,489,369 39 3,386,168 43 157,540 2 - - 13,885 15,490 - 86,806 1 46,322 1 130,633 2 365,429 5 1,153 - 15,784 - - - 158,180 2 3,880,436 44 3,987,973 51 $ 8,889,185 100 $ 7,812,341 100 $ 2,660,798 30 $ 1,830,644 23 356,644 4 285,617 4 78,517 1 59,301 1 808,740 9 838,290 11 348 - 12,438 - 67,715 1 73,017 1 4,267 - 5,673 - 3,977,029 45 3,104,980 40 1,485,631 17 1,472,679 19 - - 92,145 1 5,425 - 4,775 - 86 - 89 - 309,696 3 241,184 3 1,800,838 20 1,810,872 23 5,777,867 65 4,915,852 63 819,340 9 819,340 11 1,107,664 13 1,107,664 14 267,650 3 217,679 3 118,410 1 84,243 1 1,069,622 12 785,973 10 1,455,682 16 1,087,895 14 271,368) ( 3) ( 118,410) ( 2) 3,111,318 35 2,896,489 37 $ 8,889,185 100 $ 7,812,341 100	In Thousands of New Taiwan Dollars December31,2019 December31,2018 m o u n t ％ A m o u n t ％ $ 2,203,599 25 $ 1,325,232 17 76,886 1 14,321 - 1,735,182 20 1,458,285 19 27 - 16,330 - 32,421 - 35,279 - 8,267 - 26 - 18,185 - 1,076 - 696,050 8 750,717 10 209,260 2 219,400 3 28,872 - 3,702 - 5,008,749 56 3,824,368 49 1,050 - 600 - 3,489,369 39 3,386,168 43 157,540 2 - - 13,885 15,490 - 86,806 1 46,322 1 130,633 2 365,429 5 1,153 - 15,784 - - - 158,180 2 3,880,436 44 3,987,973 51 $ 8,889,185 100 $ 7,812,341 100 $ 2,660,798 30 $ 1,830,644 23 356,644 4 285,617 4 78,517 1 59,301 1 808,740 9 838,290 11 348 - 12,438 - 67,715 1 73,017 1 4,267 - 5,673 - 3,977,029 45 3,104,980 40 1,485,631 17 1,472,679 19 - - 92,145 1 5,425 - 4,775 - 86 - 89 - 309,696 3 241,184 3 1,800,838 20 1,810,872 23 5,777,867 65 4,915,852 63 819,340 9 819,340 11 1,107,664 13 1,107,664 14 267,650 3 217,679 3 118,410 1 84,243 1 1,069,622 12 785,973 10 1,455,682 16 1,087,895 14 271,368) ( 3) ( 118,410) ( 2) 3,111,318 35 2,896,489 37 $ 8,889,185 100 $ 7,812,341 100
		A	m o u n t $ 2,203,599 76,886 1,735,182 27 32,421 8,267 18,185 696,050 209,260 28,872 5,008,749 1,050 3,489,369 157,540 13,885 86,806 130,633 1,153 - 3,880,436 $ 8,889,185 $ 2,660,798 356,644 78,517 808,740 348 67,715 4,267 3,977,029 1,485,631 - 5,425 86 309,696 1,800,838 5,777,867 819,340 1,107,664 267,650 118,410 1,069,622 1,455,682 271,368) 3,111,318 $ 8,889,185		A	m o u n t $ 1,325,232 14,321 1,458,285 16,330 35,279 26 1,076 750,717 219,400 3,702 3,824,368 600 3,386,168 - 15,490 46,322 365,429 15,784 158,180 3,987,973 $ 7,812,341 $ 1,830,644 285,617 59,301 838,290 12,438 73,017 5,673 3,104,980 1,472,679 92,145 4,775 89 241,184 1,810,872 4,915,852 819,340 1,107,664 217,679 84,243 785,973 1,087,895 118,410) 2,896,489 $ 7,812,341		％
		(		(	(		(	17 - 19 - - - - 10 3 - 49 - 43 - - 1 5 - 2 51 100 23 4 1 11 - 1 - 40 19 1 - - 3 23 63 11 14 3 1 10 14 2) 37 100

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

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Global PMX Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income For the Year Ended December 31, 2019 and 2018

In Thousands of New Taiwan Dollars, Except Earnings Per Share

C o d e Operating revenue (Notes 21 and 28) 4100 Sales revenue 4110 Sales revenue 4170 Sales returns 4190 Sales discounts and allowances 4000 Total operating revenue 5000 Operating costs（Notes 9, 22 and 28） 5900 Gross profit from operations Operating expenses（Notes 22 and 28） 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment loss determined in accordance with IFRS 9 6000 Total operating expenses 6900 Net operating income Non-operating income and expenses（Notes 22 and 28） 7190 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expenses（Notes 23）（continued）		Year 2019 m o u n t ％ $ 5,070,157 101 38,657 ) ( 1 ) 17,402) - 5,014,098 100 3,633,723) ( 72) 1,380,375 28 96,734 ) ( 2 ) 222,045 ) ( 5 ) 169,928 ) ( 3 ) 6,466 - 482,241) ( 10) 898,134 18 57,393 1 44,259 ) ( 1 ) 52,687) ( 1) 39,553) ( 1) 858,581 17 236,154) ( 5)		Year 2018	Year 2018
	A	m o u n t $ 5,070,157 38,657 ) 17,402) 5,014,098 3,633,723) 1,380,375 96,734 ) 222,045 ) 169,928 ) 6,466 482,241) 898,134 57,393 44,259 ) 52,687) 39,553) 858,581 236,154)	A	m o u n t $ 4,470,214 33,501 ) 11,874) 4,424,839 3,138,569) 1,286,270 93,491 ) 216,776 ) 153,717 ) 3,222) 467,206) 819,064 28,852 80,183 ) 41,064) 92,395) 726,669 226,960)	％
	( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( (		101 ( 1 ) - 100 ( 71) 29 ( 2 ) ( 5 ) ( 3 ) - ( 10) 19 1 ( 2 ) ( 1) ( 2) 17 ( 5)

187

C o d e 8200 Profit Other comprehensive income 8310 Components of other comprehensive income that will not be reclassified to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans 8360 Components of other comprehensive income that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation 8300 Total other comprehensive income 8500 Total comprehensive income Profit (loss) attributable to： 8610 owners of the parent 8620 Non-controlling interests 8600 Comprehensive income attributable to 8710 owners of the parent 8720 Non-controlling interests 8700 Earnings per share（Notes 24） From continuing operations 9710 Basic 9810 Diluted		Year 2019	Year 2019	％ 12 - ( 3 ) ( 3) 9 12 - 12 9 - 9		Year 2018	Year 2018
	A	m o u n t 622,427 645 ) 152,958 ) 153,603) $ 468,824 $ 622,427 - $ 622,427 $ 468,824 - $ 468,824 $ 7.60 $ 6.99			A	m o u n t 499,709 85 34,167) 34,082) $ 465,627 $ 499,709 - $ 499,709 $ 465,627 - $ 465,627 $ 6.10 $ 5.69		％
	( ( (				( (			12 - ( 1 ) ( 1) 11 11 - 11 11 - 11

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

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Global PMX Co., Ltd. and Subsidiaries Consolidated Statements of Changes in Equity For the Year Ended December 31, 2019 and 2018

In Thousands of New Taiwan Dollars

S C o d e S T A1 Balance,January 1, 2018 Other changes in capital surplus: C5 Due to recognition of equity components of convertible bonds issued Appropriation of 2017 earnings B1 Legal reserve appropriated B3 Special reserve appropriated B5 Cash dividends of ordinary share D1 Netprofit for 2018 D3 Other comprehensive income (loss) for 2018, net of income tax D5 Total comprehensive income (loss) for 2018 Z1 Balance,December 31, 2018 Appropriation of 2018 earnings B1 Legal reserve appropriated B3 Special reserve appropriated B5 Cash dividends of ordinary share D1 Netprofit for 2019 D3 Other comprehensive income (loss) for 2019, net of income tax D5 Total comprehensive income (loss) for 2019 Z1 Balance,December 31, 2019	h a r e C h a r e ( I n h o u s a n d s ) A 81,934 - - - - - - - 81,934 - - - - - - 81,934	a p i t a l R e t a i n e d E a r n i n g s m o u n t Capital Surplus Legal Reserve Special Reserve Unappropriated R e t a i n e d E a r n i n g s Exchange Differences on Translation of Foreign Financial Statements $ 819,340 $ 1,064,002 $ 157,712 $ 64,310 $ 886,360 ( $ 84,243 ) - 43,662 - - - - - - 59,967 - ( 59,967 ) - - - - 19,933 ( 19,933 ) - - - - - ( 520,281 ) - - - - - 499,709 - - - - - 85 ( 34,167) - - - - 499,794 ( 34,167) 819,340 1,107,664 217,679 84,243 785,973 ( 118,410 ) - - 49,971 - ( 49,971 ) - - - - 34,167 ( 34,167 ) - - - - - ( 253,995 ) - - - - - 622,427 - - - - - ( 645) ( 152,958) - - - - 621,782 ( 152,958) $ 819,340 $ 1,107,664 $ 267,650 $ 118,410 $ 1,069,622 ($ 271,368)	T o t a l E q u i t y $ 2,907,481 43,662 - - ( 520,281 ) 499,709 ( 34,082) 465,627 2,896,489 - - ( 253,995 ) 622,427 ( 153,603) 468,824 $ 3,111,318

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

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Global PMX Co., Ltd. and Subsidiaries Consolidated Statements of Cash Flows For the Year Ended December 31, 2019 and 2018

In Thousands of New Taiwan Dollars

C o d e Cash flows from (used in) operating activities A10000 Profit (loss) before tax A20010 Adjustments to reconcile profit (loss) A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit loss (gain) A20400 Net loss (gain) on financial assets or liabilities at fair value through profit or loss A20900 Finance cost A21200 Interest income A22500 Loss (gain) on disposal of property, plant and equipment A23800 Loss (gain) on inventory valuation A29900 Amortization of lease prepayment A24100 foreign exchange loss (gain) A30000 Changes in operating assets and liabilities, net A31130 Decrease (increase) in notes receivable A31150 Decrease (increase) in accounts receivable A31180 Decrease (increase) in other receivable A31200 Decrease (increase) in inventories A31230 Decrease (increase) in prepayment A31240 Decrease (increase) in other current assets A32150 Increase (decrease) in accounts payable A32180 Increase (decrease) in other payable A32230 Increase (decrease) in other current liabilities A32240 Increase (decrease) in net defined benefit liability A33000 Cash inflow (outflow) generated from operations A33300 Interest paid A33500 Income tax paid AAAA Net cash flows from (used in) operating activities （continued）	Year 2019 $ 858,581 395,336 11,784 ( 6,466 ) ( 450 ) 52,687 ( 19,298 ) ( 8,482 ) ( 715 ) - ( 19,390 ) ( 62,565 ) ( 253,408 ) 6,519 57,900 10,140 ( 25,170 ) 90,243 14,108 ( 1,406 ) 5 1,099,953 ( 38,938 ) ( 192,453) 868,562	Year 2018
		$ 726,669 333,083 7,815 3,222 1,657 41,064 ( 9,626 ) ( 2,752 ) ( 19,276 ) 2,793 14,761 1,620 ( 161,370 ) ( 1,600 ) ( 162,968 ) ( 40,007 ) ( 1,545 ) 21,262 55,061 ( 120 ) ( 20) 809,723 ( 29,690 ) ( 150,746) 629,287

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C o d e Cash flows from (used in) investing activities B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Decrease (increase) in refundable deposits B04500 Acquisition of intangible assets B05350 Acquisitionfor right-of-use assets B07300 Increase in other lease prepayments B07500 Interest received BBBB Net cash flows from (used in) investing activities Cash flows from (used in) financing activities C00100 Increase in current borrowings C01200 Proceeds from Issuing bonds C01600 Proceeds from long-term debt C03100 Decrease in guarantee deposits received C04500 Cash dividends paid CCCC Net cash flows from (used in) financing activities DDDDEffect of exchange rate changes on cash and cash equivalents EEEE Net increase (decrease) in cash and cash equivalents E00100Cash and cash equivalents at beginning of period E00200Cash and cash equivalents at end of period	Year 2019 ( $ 547,232 ) 80,380 14,631 ( 10,746 ) ( 9,655) ( - ) 17,011 ( 455,611) 830,154 - ( 92,145 ) ( 3 ) ( 253,995 ) 484,011 ( 18,595) 878,367 1,325,232 $ 2,203,599	Year 2018
		( $ 1,192,876) 12,083 ( 14,342 ) ( 14,872 ) - ( 134,794 ) 9,067 (1,335,734) 398,499 1,502,500 92,145 ( 189 ) ( 520,281) 1,472,674 ( 4,086) 762,141 563,091 $ 1,325,232

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

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Global PMX Co., Ltd. and Subsidiaries Notes to Consolidated Financial Statements For the Years Ended December 31, 2019 and 2018

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. General Information

Global PMX Co., Ltd. (“the company”), was incorporated in February 1987, formerly known as 「Global PMX Co., Ltd.」. The Company changed its name to Global PMX Co., Ltd. in October 1999. The primary business activities of the Company are manufacture, sales, imports and exports of electronic equipment, plastic components, hardware hand tools, metal parts etc. trading, import and export, industrial plastic products manufacturing, other non-metal products manufacturing, iron and steel casting, iron and steel forging, steel rework, aluminum rework, etc.

The common shares of the Company have been listed on the Taiwan Stock Exchange since August 10, 2015.

The consolidated financial statements are presented in NTD, which is the Company’s functional currency.

2. The Date of Authorization for Issuance of The Consolidated Financial Statements and Procedures for Authorization.

The consolidated financial statements were approved and authorized by the Board of Directors on March 23, 2020.

3. Application of New Standards, Amendments and Interpretations

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

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

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IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

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

The Group as lessee

The Group recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the parent company only statements of comprehensive income, The Group presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the parent company only statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities. Prior to the application of IFRS 16, payments under operating lease contracts, including property interest qualified as investment properties, were recognized as expenses on a straight-line basis. Prepaid lease payments for land use rights in China were recognized as prepayments for leases. The difference between the actual payments and the expenses, as adjusted for lease incentives, was recognized as prepayments for leases. Cash flows for operating leases were classified within operating activities on the parent company only statements of cash flows. Leased assets and finance lease payables were recognized on the parent company only balance sheets for contracts classified as finance leases.

The Group elects to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized in retained earnings on January 1, 2019. Comparative information is not restated.

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lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments, The Group applies IAS 36 to all right-of-use assets.

The Group also applies the following practical expedients:

a) The Group applies a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.

b) The Group accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.

c) The Group uses hindsight, such as in determining lease terms, to measure lease liabilities.

The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on December 31, 2018 $ 824 Less: Recognition exemption for short-term leases ( 824) Undiscounted amounts on January 1, 2019 $

Discounted amounts using the incremental borrowing rate on January 1, 2019 $ - - Lease liabilities recognized on January 1, 2019 $

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

	As	Originally	Adjustments	Adjustments
	Stated on		Arising from		Restated		on
	January 1,			Initial	January		1,
		2019	Application			2019
Right-of-use assets	$	-	$	158,180	$	158,180
Prepayments for leases -
non-current		158,180	(	158,180)			-
Total effect on assets	$	158,180	$	-	$	158,180
Total effect on liabilities	$	-	$	-	$		-
Total effect on equity	$	-	$	-	$		-

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(2) The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2020

Effective Date New IFRSs Announced by IASB Amendments to IFRS 3 “Definition of a Business” January 1, 2020 (Note 1) Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate January 1, 2020 (Note 2) Benchmark Reform” Amendments to IAS 1 and IAS 8 “Definition of Material” January 1, 2020 (Note 3)

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

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

1) Amendments to IFRS 3 “Definition of a Business”

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

2) Amendments to IAS 1 and IAS 8 “Definition of material”

The amendments are intended to make the definition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRSs. The concept of “obscuring” material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from “could influence” to “could reasonably be expected to

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influence”.

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

(3) New IFRSs in issue but not yet endorsed and issued into effect by the FSC

Effective Date Announced by IASB (Note New IFRSs 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2021 Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2022 or Non-current”

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

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, The Group shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether The Group will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, The Group must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or The Group’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of The Group’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

Except for the above impact, as of the date the consolidated financial statements

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

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

The accompanying parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of Preparation

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

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 inputs are quoted prices (unadjusted) of identical assets or liabilities that the entity can access in active markets at the measurement date.
Level 2 inputs are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 inputs are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When preparing the parent company only financial statements, The Group used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of The Group in its financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, share of profits of subsidiaries for using the equity method in the parent company only financial statements.

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(3) Classification of Current and Non-Current Assets and Liabilities

Current assets include

Assets held primarily for the purpose of trading.
Assets expected to be realized within 12 months after the reporting period; and
Cash and cash equivalents (unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period).

Current liabilities include ：

Liabilities held primarily for the purpose of trading.
Liabilities due to be settled within 12 months after the reporting period; and
Liabilities for which The Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as noncurrent.

(4) Basis of consolidation

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

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

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

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

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any

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difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

See Note 10、Table 6 and Table 7 for detailed information on subsidiaries (including percentages of ownership and main businesses).

(5) Foreign Currencies

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

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting financial statements, the assets and liabilities of The Group’s foreign operations (including the subsidiaries or associates, joint ventures or branches of the country in which the country of operation or currency is used) are translated into New Taiwan Dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

On the disposal of all the equity of a foreign operation, or disposes of the partial equity of the subsidiaries but loses control, or disposes of the joint ventures or associates. The retained equity are financial assets and are accounted for as financial instruments. All of the exchange differences accumulated in equity in respect of that operation attributable to the owners of The Group are reclassified to profit or loss.

If partial disposal of a foreign subsidiary does not result in loss of control, the cumulative exchange difference is incorporated into the equity transaction calculation on a pro rata basis, but is not recognized as profit or loss. In the case of any other part of the disposition of foreign operation, the accumulated exchange difference is reclassified to profit or loss according to the proportion of the disposition.

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(6) Inventories

Inventories including finished goods, are stated at the lower of cost or net realizable value. Inventories are recorded at standard cost and adjusted to approximate weighted-average cost at the end of the reporting period. Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. The costs of inventories sold or consumed are determined using the weighted-average method.

(7) Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment.

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

(8) Intangible Assets

1. Acquired Separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless The Group expects to dispose of the intangible asset before the end of its economic life.

Derecognition

When the intangible assets are derecognized, the net disposal price and the carrying amount of the asset is recognized in the current profit and loss.

(9) Impairment of Tangible and Intangible Assets

The Group reviews the carrying amounts of its tangible and intangible assets (excluding goodwill), to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is

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estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, The Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, The Group uses the estimated cash flows discounted by the future pre-tax discount rate, and the discount rate reflects current the market time value of money and the specific risks to the asset for estimated future cash flows not yet adjusting to the market.

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

(10) Financial Instruments

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

Financial assets and financial liabilities, those are not initially measured at fair value through profit or loss, shall be measured at fair value plus transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1. Financial Assets

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

(1) Measurement Category

The Group’s financial assets consist of the following categories: financial assets at fair value through profit or loss, financial assets at amortized cost.

A. Financial assets at fair value through profit or loss

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Financial assets at fair value through profit or loss (FVTPL) are stated at fair value, with any gains or

losses arising on remeasurement recognized in profit or loss, including The Group's investment in equity instruments that are not measured by The Group's other comprehensive gains and losses, which are measured at fair value through profit or loss and non-conforming investment in debt instruments that are measured at amortized cost or measured at fair value through other comprehensive income. Fair value is determined in the manner described in Note 26.

B. Financial assets at amortized cost

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

(a) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
(b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets (including cash and cash equivalents and accounts receivable as measured by amortized cost) carried at amortized cost should be amortized using the effective interest rate method. Under the effective interest method, the interest income recognized is calculated by applying the market interest rate to the carrying amount and the difference between the interest income so recognized and the interest income paid. Any foreign currency exchange gains and losses are recognized in profit or loss.

Except the following two approaches, interest income was calculated by effective interest rate multiplying the total carrying value of the asset:

(a) Purchased or originated credit-impaired financial assets, for which interest income is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of financial assets.

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(b) Non-purchased or originated credit impairment, but financial assets have subsequently become credit-impaired, for which interest income is calculated by multiplying the effective interest rate by the amortized cost of such financial assets starting from the following reporting period.

Cash equivalents include time deposits that are highly liquid within 3 months from the date of acquisition, can be converted into cash fund at any time, and have little risk of changes in value, to meet short-term cash commitments.

(2) Impairment of Financial Assets

The Group's impairment loss on financial assets (including accounts receivable) measured at amortized cost based on expected credit loss at the end of each reporting period.

Receivable are recognized as allowances for expected credit losses during the duration. Other financial assets are assessed whether the credit risk has increased significantly since the original recognition. If there is no significant increase, the allowance loss is recognized based on the 12-month expected credit loss. If it has increased significantly, it is recognized as the expected credit loss during the duration.

The expected credit loss is the weighted-average credit loss weighted by the risk of default. The 12-month expected credit loss represents the expected credit loss arising from the possible default of the financial instrument within 12 months following the report. The expected credit loss during the duration represents the expected credit loss arising from all possible defaults of the financial instrument during the expected duration.

For internal credit risk management purposes, The Group determines that the following situations indicate that a financial asset is in default :

i) Internal or external information show that the debtor is unlikely to pay its creditors.
ii) When a financial asset is more than 181 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

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recognized in other comprehensive gains and losses and does not reduce its carrying amount.

(3) Derecognition of Financial Assets

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

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2. Equity Instruments

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

Equity instruments issued by The Group are recognized at the proceeds received, net of direct issue costs.

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

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3. Financial Liabilities

(1) Subsequent measurement

The financial liabilities are measured at amortized cost using the effective interest method.

(2) Derecognition of financial liabilities

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

4. Convertible Bonds

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

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

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

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

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(11) Revenue Recognition

The Group recognizes revenue when performance obligations are satisfied. The transaction price is apportioned to each performance obligation and the income is recognized when each performance obligation is met.

Revenue from sale of goods

Revenue from the sale of goods comes from automotive parts, computer, communication, and consumer electronics and medical equipments. The Group recognizes revenue when the products are delivered and ownership control is transferred.

During materials processing, the control of the ownership of the processed product is not transferred, the revenue is not recognized during materials processing.

(12) Leases

2019

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basi over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

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2018

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

The Group as lessor

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

The Group as lessee

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

(13) Borrowing Cost

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

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

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

(14) Government Grants

Government grants are not recognized until there is reasonable assurance that the consolidated company will comply with the conditions attached to the grants and that the grants will be received.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the consolidated company with no future related costs are recognized in profit or loss in the period in which they become receivable.

(15) Employee Benefit
Short-term employee benefit

Liabilities recognized in respect of short-term employee benefit are measured

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at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

Retirement benefits

Payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost), and net interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represents the actual deficit (surplus) in The Group’s defined benefit plan. Net defined benefit asset shall not exceed the present value of the allocation from the plan or the reduction of future allocation.

(16) Taxation

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

1. Current tax

Pursuant to Income Tax Act, income tax on unappropriated earnings is expensed in the year the shareholders approved the appropriation of earnings which is the year subsequent to the year the earnings are generated.

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

Deferred tax

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

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

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

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets which originally not recognized is also reviewed at the end of each reporting period and recognized to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

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

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

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5. Critical Accounting Judgments and Key Sources of Estimation and Uncertainty

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

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

6. Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand and revolving funds Bank notes and demand deposits Cash equivalents （investments with original maturities of 3 months or less） Time deposits	December 31,2019 $ 759 1,516,950 685,890 $ 2,203,599	December 31,2018
			$ 788 1,036,762 287,682 $ 1,325,232

7. Financial Assets at Fair Value through Profit or Loss

December 31, 2019 December 31, 2018 － Financial assets noncurrent Mandatorily at FVTPL. Derivatives instruments （non-designated hedges）－ Redeemable convertible bond （Note 16） $ 1,050 $ 600

The Group has issued embedded derivatives that are not closely related to the host contract of convertible bonds (issuer redemption), the fair value assessed using option pricing model is provided in Note 16.

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8. Notes and Accounts Receivable and Other Receivables

Notes receivable Operating Accounts receivable － non- related parties At amortized cost Gross carrying amount Less：Allowance for doubtful accounts Accounts receivable －related parties At amortized cost Gross carrying amount Other receivables Tax refund receivable Interest receivable Other receivables－related parties Others	December 31,2019 $ 76,886 $ 1,760,914 ( 25,732) $ 1,735,182 $ 27 $ 12,794 2,846 8,267 16,781 $ 40,688	December 31,2018	December 31,2018
	(	(	$ 14,321 $ 1,491,203 32,918) $ 1,458,285 $ 16,330 $ 29,599 559 26 5,121 $ 35,305

The average credit period of sales of goods was 60 to 120 days. Due to the short average credit period of sales of goods, no interest was charged on accounts receivable. The consolidated company uses other publicly available financial information or its own trading records to rate its major customers, and to obtain sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The consolidated company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits annually.

In order to minimize credit risk, the consolidated company’s management has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue receivables. In addition, the consolidated company reviews the recoverable amount of each individual account receivable at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts.

The consolidated company applies the simplified approach to provisions for expected credit losses prescribed by IFRS 9, which permits the use of a lifetime expected losses

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provision for all accounts receivable. The expected credit losses on accounts receivable are estimated using a provision matrix by reference to past default experience with the debtor and an analysis of the debtor’s current financial position, adjusted for the general economic conditions of the industry in which the debtor operates and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for losses based on the past due status of receivables is not further distinguished according to different segments of the Group’s customer base. Expected credit loss rate on accounts receivable are estimated based on the number of days that past due.

The following table details the loss allowance of accounts receivable based on the consolidated company’s allowance matrix:

December 31, 2019

Gross carrying amount Loss allowance （Lifetime ECL） Amortized cost December 31, 2018	Not Past Due	Not Past Due	1	~ 6 0 d a y s	61～120days	61～120days	121～180days	121～180days	Over 181days	Over 181days	T o t a l
	$1,530,941 ( 5,376) $1,525,565 Not Past Due		( 1	$ 192,563 8,759) $ 183,804 ~ 6 0 d a y s	$ 30,359 ( 5,418) $ 24,941 61～120days		$ 2,041 ( 1,142) $ 899 121～180days		$ 5,037 ( 5,037) $ - Over 181days		$ 1,760,941 ( 25,732 ) $ 1,735,209 T o t a l
Gross carrying amount Loss allowance （Lifetime ECL） Amortized cost
	(	$1,266,621 3,753) $1,262,868	(	$ 205,170 13,539) $ 191,631	(	$ 23,595 6,234) $ 17,361	(	$ 7,045 4,290) $ 2,755	(	$ 5,102 5,102) $ -	$ 1,507,533 ( 32,918 ) $ 1,474,615

The loss allowance for accounts receivable is calculated by the rate of expected credit loss at each aging range, and the rate of expected credit loss was 0.01% to 100%.

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Movements of the loss allowance for accounts receivables were as follows：

Balance at January 1, 2019 Less：(Reversal)Impairment loss allowance for the period Differences arising from currency exchange Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2019 $ 32,918 ( 6,466 ) ( 720) $ 25,732		2018
		(	$ 30,047 3,222 351) $ 32,918

9. Inventories

Finished goods Work in progress Raw materials Inventory in transit	December 31,2019 $ 291,005 271,321 133,724 - $ 696,050	December 31,2018	December 31,2018
			$ 273,981 283,917 192,077 742 $ 750,717

Costs of inventories sold were NT$3,633,723 thousand and NT$3,138,569 thousand, respectively, for the years ended December 31, 2019 and 2018. Recovery benefit of net realizable value of inventories in the amount of NT$715 thousand and NT$19,276 thousand were included in the cost of sales for the years ended December 31, 2019 and 2018, respectively. Recovery of net realizable value of inventories derived mainly from disposal of inventory obsolescence.

10. Subsidiaries

Subsidiaries included in the consolidated financial statements

The consolidated entities as of December 31, 2019, and December 31, 2018 were as follows:

I n v e s t o r	I n v e s t e e	M a i n B u s i n e s s e s A c t i v i t i e s	% o f O w	n e r s h i p	R e m a r k
			December 31,2019 100% 100% 100% 100% 100%	December 31,2018 100% 100% 100% 100% 100%
Global PMX Co., Ltd. Global PMX Co., Ltd. Global PMX Co., Ltd. Fortune Tower Holding Co., Ltd. Fortune Tower Holding Co., Ltd.	Fortune Tower Holding Co., Ltd. Seamax International Ltd. Ace Plus Technology Limited Seamax Manufacturing Pte. Limited Global Advance Technology Limited	Investment holding company Import and export of goods Import and export of goods Investment holding company Investment holding company			Incorporated in January 2012 Incorporated in January 2012 Incorporated in August 2016 Acquire 100% majority stake directly or indirectly in January 2012 Acquire 100% majority stake directly or indirectly in January 2012

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Seamax	Seamax	Productions and sales of	100%	100%	Acquire	100%
Manufacturing	Manufacturing	hard-discs, industrial			majority	stake
Pte. Limited	Co.,Ltd.(in	control components,			directly or	indirectly
	Dongguan)	fine blanking die,			in January	2012
		standard parts for die
		sets, advanced
		hardware, advanced
		construction hardware,
		plumbing equipment
		and hardware, new
		electronic
		components, key auto
		parts, anti-lock
		braking system.
Global Win Limited	Global PMX Co.,	Production and sales of	100%	100%	Acquire	100%
	Ltd.(in	hard disc drive, new			majority	stake
	Dongguan)	electronic components,			directly or	indirectly
		plumbing equipment			in January	2012
		and hardware, key
		auto parts, anti-lock
		braking system.
Global Advance	Global PMX Co.,	Development, research,	100%	100%	Acquire	100%
Technology	Ltd.(in Zhejiang)	production and sales			majority	stake
Limited		of various large			directly or	indirectly
		capacity optical			in January	2012
		disc/hard disc drivers
		and parts,
		semiconductor
		devices, new
		electronic
		components, digital
		cameras, precise
		online measuring
		instruments, fine
		blanking die, standard
		parts for die sets, and
		precise medical
		equipment, precise
		auto parts.
Global Advance	Global PMX Co.,	Development, research,	100%	100%	Incorporated	in
Technology	Ltd. (in Jiaxing)	production and sales			December	2017
Limited		of auto parts, general
		components, Class
		1medical equipment,
		computer
		software/hardware,
		R&D of electronic
		components

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11. Property, Plant and Equipment

Balance at January 1, 2018 Additions Disposals Reclassification Exchange difference, net Balance at December 31, 2018 Accumulated depreciation and impairment Balance at January 1, 2018 Depreciation Disposals Reclassification Exchange difference, net Balance at December 31, 2018 Net amount at December 31, 2018 Cost Balance at January 1, 2019 Additions Disposals Reclassification Exchange difference, net Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation Disposals Exchange difference, net Balance at December 31, 2019 Net amount at December 31, 2019	L	a n d	B	u i l d i ng s	Machinery and Equ ipm e n t	S h i p p i n g Equ ipm e n t	O f f i c e Equ ipm e n t	O t h e r Equ ipm e n t	C P	onstruction in r o g r e s s	T o t a l
		$ 16,801 - - - - $ 16,801 $ - - - - - $ - $ 16,801 $ 16,801 - - - - $ 16,801 $ - - - - $ - $ 16,801		$ 483,373 - - - ( 8,505) $ 474,868 $ 130,327 22,129 - - ( 2,622) $ 149,834 $ 325,034 $ 474,868 5,213 - 18,987 ( 19,520) $ 479,548 $ 149,834 22,027 - ( 6,701) $ 165,160 $ 314,388	$ 3,239,166 809,650 ( 66,051 ) 316,659 ( 68,265) $ 4,231,159 $ 1,222,637 259,551 ( 58,011 ) 4 ( 17,282) $ 1,406,899 $ 2,824,260 $ 4,231,159 228,240 ( 160,322 ) 288,894 ( 179,979) $ 4,407,992 $ 1,406,899 313,760 ( 79,661 ) ( 62,688) $ 1,578,310 $ 2,829,682	$ 13,075 427 ( 546 ) ( 172) ( 222) $ 12,562 $ 4,629 1,987 ( 255 ) - ( 113) $ 6,248 $ 6,314 $ 12,562 87 ( 184 ) 850 ( 529) $ 12,786 $ 6,248 1,931 ( 175 ) ( 319) $ 7,685 $ 5,101	$ 39,400 949 ( 3,328 ) 27 ( 578) $ 36,470 $ 26,386 3,699 ( 3,234 ) ( 403) $ 26,448 $ 10,022 $ 36,470 215 ( 208 ) - ( 1,306) $ 35,171 $ 26,448 3,318 ( 208 ) ( 1,036) $ 28,522 $ 6,649	$ 288,159 62,975 ( 33,814 ) 9,986 ( 5,736) $ 321,570 $ 167,462 45,717 ( 32,908 ) ( 4 ) ( 3,149) $ 177,118 $ 144,452 $ 321,570 45,960 ( 20,661 ) 14,654 ( 14,425) $ 347,098 $ 177,118 50,718 ( 19,818 ) ( 8,311) $ 199,707 $ 147,391	$ 2,831 44,065 - 13,505 ( 1,116) $ 59,285 $ - - - - - $ - $ 59,285 $ 59,285 151,172 - ( 33,913 ) ( 7,187) $ 169,357 $ - - - - $ - $ 169,357		$ 4,082,805 918,066 ( 103,739 ) 340,005 ( 84,422) $ 5,152,715 $ 1,551,441 333,083 ( 94,408 ) - ( 23,569) $ 1,766,547 $ 3,386,168 $ 5,152,715 430,887 ( 181,375 ) 289,472 ( 222,946) $ 5,468,753 $ 1,766,547 391,754 ( 99,862 ) ( 79,055) $ 1,979,384 $ 3,489,369

No impairment assessment was performed for the years ended December 31, 2019 and 2018 as there was no indication of impairment.

The above items of property, plant and equipment were depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings－Taiwan	55 years
Main buildings－Mainland
China	20 years
Building improvements	3 years
Machinery and equipment	3 to 15 years
Shipping equipment	2 to 10 years
Office equipment	3 to 10 years
Miscellaneous equipment	3 to 5 years

Information on amounts of property, plant and equipment pledged to others as collaterals is provided in Note 29.

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12. LEASE ARRANGEMENTS

a. Right-of-use assets – 2019

Carrying amounts Land Additions to right-of-use assets Depreciation charge for right-of-use assets Land		December 31, 2019
		$ 157,540 For the Year Ended December 31, 2019
		$ 9,655 $ 3,582

b. Other lease information

The consolidated company 's subsdiary , Global PMX Co.,Ltd.(in Zhejiang), obtained the right-of-use assets on land , Jiashan County, Zhejiang Province , in January, 2019, paid amount to RMB$ 2,113 thousand ( approximately equivalent to NT$ 9,655 thousand) .

2019 Expenses relating to short-term leases Total cash outflow for leases		For the Year Ended December 31, 2019
		$ 7,402 $ 7,402

The consolidated company leases certain buildings and office equipment which qualify as short-term leases. The consolidated company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments are as follows:

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December 31, 2018

Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years	$ 824 - - $ 824

13. Computer Software, Net

Cost Balance at January 1 Acquired separately Derecognition Differences arising from currency exchange, net Balance at December 31 Accumulated amortization and impairment Balance at January 1, Amortization expenses Derecognition Differences arising from currency exchange, net Balance at December 31 Carrying amount at January 1 Carrying amount at December 31	2019 $ 26,850 10,746 ( 8,569 ) ( 1,151) $ 27,876 ( $ 11,360 ) ( 11,784 ) 8,569 584 ($ 13,991) $ 15,490 $ 13,885	2018
		$ 12,784 14,872 ( 322 ) ( 484) $ 26,850 ( $ 4,069 ) ( 7,815 ) 322 202 ($ 11,360) $ 8,715 $ 15,490

Amortization expenses are recognized on a straight-line basis over 2 to 5 years.

14. Other Assets

Current Prepayments Office supplies Excess business tax paid Business tax paid Prepayments to suppliers Others Other current assets Other financial assets	December 31,2019 $ 137,989 12,674 7,028 26,117 25,452 209,260 28,849 23 $ 238,132	December 31,2018	December 31,2018
			$ 122,289 32,500 12,642 29,692 22,277 219,400 3,679 23 $ 223,102

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Non-current Prepayments for business facilities Guarantee deposits paid Long-term lease prepayments (1)	$ 130,633 1,153 - $ 131,786	$ 365,429 15,784 158,180 $ 539,393

(1) Long-term lease prepayments

Long-term lease prepayment is made for a right to the use of the land in Mainland China.

15. Borrowings

(1) Current borrowings

Current borrowings
Unsecured borrowings Credit loans	December 31,2019 $ 2,660,798	December 31,2018
			$ 1,830,644

As of December 31, 2019 and 2018, the range of short-term credit loans interest rates were 0.80%～2.99% per annum and 0.80%～3.75% per annum respectively.

(2) Non-current portion of non-current borrowings

Unsecured borrowings Credit loans	December 31,2019 $ -	December 31,2018	December 31,2018
			$ 92,145

The final repayment to the loan is due on December 20, 2021, as of December 31, 2018, the effective interest rate charged on the loan was 3.7%. The consolidated company obtained a bank drawdown amounted to US$3,000 thousand (approximately equivalent to NT$92,145 thousand) in 2018, a grace period of 1 year for repayment. The consolidated company amortizes the loan over 2-year period starting from 2020. This drawdown is used for acquisitions of plants and equipment. The loan has repayed in March, 2019.

16. Bonds Payable

Domestic unsecured bonds Less：Discount on bonds payable Subtotal amount Less：Current portion	December 31,2019 $ 1,500,000 ( 14,369) 1,485,631 - $ 1,485,631	December 31,2018	December 31,2018
	(	(	$ 1,500,000 27,321) 1,472,679 - $ 1,472,679

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Domestic unsecured convertible bonds

The consolidated company issued 15 thousand shares of unsecured convertible bonds denominated in New Taiwan Dollars, with an aggregate principal amount of NT$ 1,500,000 thousand and a coupon interest rate of zero percent on February 5, 2018.

(1) Each unit of convertible bond holder has right to convert held bonds to common shares of issuing company at NT$179 per share during the conversion period starting from May 6, 2018 to February 5, 2021. (The initial conversion price of NT$ 193 were reset and amounted to NT$ 183.5 and NT$ 179 per share respectively, at ex-dividend date on August 15, 2018 and August 3, 2019)
(2) Starting from May 6, 2018 to December 27, 2020, if the closing prices of The Group’s common stocks had surpassed the conversion price in 30 consecutive business days in a row to the extent of 30% (on) or above the foresaid price, or the balance of outstanding convertible bonds had been 10% lower than original issued amount, The Group may repurchase outstanding bonds in cash at their par value.

The convertible bonds contain both liability and equity components, the equity component was presented in equity as capital surplus-share option. The effective interest rate of liability component was initially recognized at 0.073%.

Proceeds from issuing bonds（less transaction cost NT$ 5,000 thousand）

Equity component（less transaction cost allocated to equity
NT$346 thousand）
(
Convertible bond redemption

Liability component measured at issuance date (less
transaction cost allocated to liability NT$4,647 thousand)

Effective interest rate 0.073%

Liability component at December 31, 2018

Effective interest rate 0.073%

Liability component at December 31, 2019

$ 1,502,500

43,662 )
2,257
1,461,095
11,584
$ 1,472,679
12,952
$ 1,485,631

Convertible bond redemption is a financial asset measured at fair value through profit or loss. The estimated gain (loss) amount from changes in fair value from the year ended 2019 and February 5 to December 31, 2018 was NT$450 thousand and (NT$1,657)

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thousand, The fair value of the financial assets was NT$1,050 thousand NT$600 thousand as of December 31, 2019 and 2018. Please refer to Note 7.

17. Accounts Payable

Operating Accounts payable Accounts payable－related parties	December 31,2019 $ 356,644 $ 78,517	December 31,2018	December 31,2018
			$ 285,617 $ 59,301

The consolidated company has financial risk management policies in place to ensure that all payables are repaid within the pre-agreed credit terms.

18. Other Liabilities

Other payables Salaries and bonuses Social insurance premiums Utilities expense Payables on equipment Interest payable Employee compensation Remuneration of directors Professional service fee Taxes and dues Processing expenses Others Other payables－related parties Temporary credits Receipts under custody Others Non-current Guarantee deposit received	December 31,2019 $ 124,704 119,767 2,151 49,714 2,013 24,096 19,514 5,812 17,887 172,444 270,638 $ 808,740 $ 348 $ 3,335 621 311 $ 4,267 $ 86	December 31,2018	December 31,2018
			$ 111,824 107,918 2,538 106,259 1,216 23,298 18,647 5,341 17,439 166,028 277,782 $ 838,290 $ 12,438 $ 4,801 548 324 $ 5,673 $ 89

19. Retirement Benefit Plans

(1) Defined contribution plans

The consolidated company has pension plans under the R.O.C. Labor Pension Act (the “Act”), which is a state-managed defined contribution plan. Under the Act, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

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The employees of the consolidated company’s subsidiaries in China are members of retirement benefit plans operated by their respective governments. The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the consolidated company with respect to the retirement benefit plan is to make the specified contributions.

(2) Defined benefit plans

The consolidated company adopted the defined benefit plan under the R.O.C. Labor Standards Law, under which pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Group contributes amounts equal to 4% of total monthly salaries and wages to a pension fund administered by the Labor Pension Fund Supervisory Committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, The Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, The Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds (“the Bureau”) under Taiwan’s Ministry of Labor; the consolidated company has no right to influence the Bureau’s investment policy and strategy.

Amounts included in the consolidated balance sheets in respect of the defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Appropriation shortage Net defined benefit liability	December 31,2019 $ 10,882 ( 5,457) 5,425 $ 5,425	December 31,2018	December 31,2018
	(	(	$ 9,944 5,169) 4,775 $ 4,775

Movements in net defined benefit liability were as follows:：

N e t D e f i n e d Present Value of B e n e f i t Defined Benefit Fair Value of L i a b i l i t i e s O b l i g a t i o n P l a n A s s e t s ( A s s e t s )

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Remeasurement

Remeasurement
Return on plan assets (excluding amounts included in net interest) Actuarial loss (gain) － Changes in demographic assumptions －Changes in financial assumptions －Experience adjustments Recognized in other comprehensive income Contributions from the employer Balance at December 31, 2018 Interest expense (income) Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss (gain) － Changes in demographic assumptions －Changes in financial assumptions －Experience adjustments Recognized in other comprehensive income Contributions from the employer Balance at December 31, 2019	(	- ( 175 ) ( 175 ) 54 - 54 157 - 157 121) - ( 121) 90 ( 175) ( 85) - ( 85 ) ( 85) 9,944 ( 5,169) 4,775 124 ( 65) 59 124 ( 65) 59 - ( 169 ) ( 169 ) 2 - 2 636 - 636 176 - 176 814 ( 169) ( 645) - ( 54 ) ( 54) $ 10,882 ($ 5,457) $ 5,425

Through the defined benefit plans under the R.O.C. Labor Standards Law, the consolidated company is exposed to the following risks:

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Investment risk: The pension funds are invested in domestic (foreign) equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the returns generated by plan assets should not be less than the interest rate for a 2-year time deposit published by the local banks.
Interest risk: A decrease in the government/corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.
Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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

Discount rate Future salary increase rate	December 31,2019 0.750% 2.250%	December 31,2018
		1.250% 2.250%

If a reasonably possible movement in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation will increase (decrease) as follows:

Discount rate Increase 0.25% Decrease 0.25% Future salary increase rate Increase 0.25% Decrease 0.25%	December 31,2019 ($ 324) $ 337 $ 326 ($ 315)	December 31,2018	December 31,2018
	( (	( (	$ 311) $ 324 $ 315 $ 304)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in

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assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Estimated amount to be paid within 1 year Determine the average maturity of defined benefit obligation	December 31,2019 $ 60 12.0 years	December 31,2018	December 31,2018
			$ 87 12.7 years

20. Equity

(1) Share capital

Common stock Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31,2019 150,000 $ 1,500,000 81,934 $ 819,340	December 31,2018	December 31,2018
			150,000 $ 1,500,000 81,934 $ 819,340

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

(2) Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Share premium May not be used for any purpose Stock right (2)（Note 16）	December 31,2019 $ 1,064,002 43,662 $ 1,107,664	December 31,2018	December 31,2018
			$ 1,064,002 43,662 $ 1,107,664

(1) The capital surplus from shares issued in excess of par may be used to offset a deficit; in addition, when The Group has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital, but limited to a certain percentage of The Group’s paid-in capital each year.

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(2) Such capital surplus generated from recognition of convertible bonds will be adjusted upon conversion or expiration of underlying assets.
(3) Retained earnings and dividend policy

Under the earning distribution policy of The Group’s Articles, where The Group made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by The Group’s board of directors as the basis for proposing a distribution plan with due consideration of any future operating plans and fund demand, which shall be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders by cash or shares, cash dividends shall be distributed not less than 50% of profit, which was offseted losses and deducted legal reserve and special reserve. However, if The Group’s shareholder dividend is less than NT$0.5 per share, retained earnings will not be distributed. The Group can distribute the dividends by cash or shares, cash dividend is not less than 50% of the total dividend. The distribution of profit surplus shall be approved in the annual shareholders’ meeting. For the employee and directors' compensation distribution policy as stipulated in The Group's Articles, please refer to Note 22 (7) Employees' Compensation and Directors' Compensation.

The statutory surplus reserve shall be allocated until the balance reaches the total paid-in capital of The Group. The statutory surplus reserve can be used for make up losses. When The Group has no losses, the portion of the statutory surplus reserve exceeds 25% of the total paid-in capital may be transferred to capital or distributed as cash dividends.

Pursuant to Letter Number 1010012865 and Letter Number 1010047490 issued by the Financial Supervisory Commission and Adoption of International Financial Reporting Standards (IFRSs), Questions and Answers to an application for permission to capitalize its legal reserve or capital reserve” set aside and reversal special reserve in accordance with the provisions. After other shareholders' equity deductions have been reversed, the surplus shall be distributed in the reversal part.

The appropriations of 2018 and 2017 retained earnings had been approved by The Group’s shareholders in its meetings held on June 14, 2019 and June 29, 2018, respectively. The appropriations of earnings and dividends per share were as follows:

225

Legal reserve Special reserve Cash dividends Dividends Per Share(NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For Fiscal Year 2018 $ 49,971 $ 34,167 $ 253,995 $ 3.10	For Fiscal Year 2017
			$ 59,967 $ 19,933 $ 520,281 $ 6.35

The appropriations of retained earnings for 2019 had been proposed by the board of directors on March 23, 2020:

Legal reserve Special reserve Cash dividends Dividends Per Share(NT$)	Appropriation of Earnings	Appropriation of Earnings
	For Fiscal Year 2019
		$ 62,243 $ 152,958 $ 204,835 $ 2.5

The appropriations of earnings for the 2019 are to be presented for approval in the shareholders’ meeting to be held in June, 2020.

(4) Special reserve

Special reserve
Balance at January 1 Special reserve Deduction amount to other equity Balance at December 31		2019 $ 84,243 34,167 $ 118,410		2018
				$ 64,310 19,933 $ 84,243

226

(5) Other equity items
Exchange differences on translating the financial statements of foreign operations

	2019			2018
Balance at January 1	($ 118,410)		($ 84,243)
Change in tax rate		-		3,043
Recognized for the year
Exchange differences
on translating the
financial statements
of foreign
operations	( 191,198 )		(	46,513 )
Income tax effect	38,240			9,303
Other comprehensive
income for the year	(152,958)		(	34,167)
Balance at December 31	($ 271,368)		($ 118,410)
Net Revenue
	2019			2018
Revenue generated from contracts
with customers
Revenue generated from sales of
goods	$ 5,014,098		$	4,424,839

21. Net Revenue

22. Net Profit for the Year

(1) Other income

(1)	Other income
					2019			2018
	Interest income
	Bank deposits			$	19,298		$	9,626
	Rental income				-			200
	Government subsidy income				36,793			12,304
	Others				1,302			6,722
				$	57,393		$	28,852
(2)	Other gains and losses
					2019			2018
	Gains (losses) on disposal of
	property, plant and equipment			$	8,482		$	2,752
	Gains (losses) on	foreign
	exchange, net		(		52,886 )	(		81,045 )
	Gains (losses) on financial assets
	at FVTPL, net				450	(		1,657 )
	Others		(		305)	(		233)
			(	$	44,259)	(	$	80,183)

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(3) Finance cost 2019 Interest expense on bank borrowings $ 39,735 Interest expenses on convertible bonds 12,952 $ 52,687 (4) Depreciation and amortization 2019 Property, plant and equipment $ 391,754 Right-of-use assets 3,582 Intangible assets 11,784 Total $ 407,120 Depreciation categorized by function Operating costs $ 361,417 Operating expenses 33,919 $ 395,336 Amortization categorized by function Administrative expenses $ 11,784 (5) Research and development expenditure recognized as expenses 2019 Research and development expenses $ 169,928 (6) Employee benefit expenses 2019 Short-term employee benefits $ 813,966 Post-employment benefits Defined contribution plans 29,281 Defined benefit plans（Note 19） 59 Termination benefits 1,817 Other employee benefits 45,006 Total employee benefit expenses $ 890,129 Categorized by function Operating costs $ 648,671 Operating expenses 241,458 $ 890,129		2019 $ 39,735 12,952 $ 52,687 2019 $ 391,754 3,582		2018
				$ 29,480 11,584 $ 41,064 2018
				$ 333,083 -
				7,815 $ 340,898 $ 303,423 29,660 $ 333,083 $ 7,815 2018
				$ 153,717 2018
				$ 774,290 30,506 65 1,445 46,462 $ 852,768 $ 629,658 223,110 $ 852,768

(7) Employees’ compensation and directors’ remuneration

228

In accordance with the provisions of The Group’s Articles of Incorporation, The Group shall allocate its net profit before income tax as employees’ compensation and remuneration of directors at a rate of no less than 2% and no more than 2.24%. The employees’ compensation and remuneration of directors for the years ended December 31, 2019 and 2018 have been approved by The Group’s board of directors on March 23, 2020 and March 25, 2019, respectively:

Estimated rate Compensation of employees Remuneration of directors Amount Compensation of employees Remuneration of directors	2019 2.69% 1.35% 2019 I n c a s h $ 21,483 10,781	2018
		2.69% 1.35% 2018
		I n c a s h
		$ 18,463 9,266

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

There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2018 and 2017.

The information of the employees’ compensation and remuneration of directors resolved by the board of directors for 2019 and 2018 are available on the Market Observation Post System (MOPS) website of the Taiwan Stock Exchange.

(8) Foreign exchange gains and losses

oreign exchange gains and losses
Total foreign exchange gains Total foreign exchange losses Gains (losses), net		2019 $ 78,230 131,116) $ 52,886)		2018
	( (		( (	$ 128,743 209,788) $ 81,045)

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23. Income Tax

(1) Income tax recognized in profit or loss, the major components of income tax expense (profit) were as follows:

2019 2018 Current income tax expense Current tax expense recognized in the current year $ 159,725 $ 147,095 Income tax on unappropriated earnings 8,083 - Income tax adjustments on prior years 2,234 393 170,042 147,488 Deferred income tax expense Current tax expense recognized in the current year 60,264 52,482 Changes in tax rates 5,848 26,990 66,112 79,472 Income tax expenses recognized in profit or loss $ 236,154 $ 226,960 reconciliation of accounting profit and current income tax expenses was as follows: 2019 2018 Income before tax $ 858,581 $ 726,669 Income tax expense calculated at the statutory rate $ 225,857 $ 208,066 Unrecognized deductible temporary differences 417 ( 1,699 ) Unrecognized loss carryforwards ( 384 ) 5,511 Adjustments for prior year’s current tax expense 2,234 393 Income tax on unappropriated earnings 8,083 - Changes in tax rates 5,848 26,990 Others ( 5,901) ( 12,301) Income tax expenses recognized in profit or loss $ 236,154 $ 226,960		2018
	$ 726,669 $ 208,066 ( 1,699 ) 5,511 393 - 26,990 ( 12,301) $ 226,960

A reconciliation of accounting profit and current income tax expenses was as follows:

230

The Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings was reduced from 10% to 5%.

In July 2019, the President of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings.

Seamax Manufacturing Pte., Ltd.(in Dongguan) and Global PMX Co., Ltd.(in Zhejiang), both are subsidiaries in Mainland China obtained favorable tax rate of 15% applicable to high-tech enterprises, while a tax rate of 25% would apply to other subsidiaries in Mainland China.

(2) Income tax recognized in other comprehensive income

			2019			2018
Deferred income tax
Changes in tax rate		$		-	$	3,043
Current tax expense recognized in
the current year
－Translation of	foreign
operation			38,240			9,303
Income tax expenses recognized in
other comprehensive
income		$	38,240		$	12,346
rrent income tax assets and	liabilities
		December 31,2019			December 31,2018
Current income tax assets
Tax return receivable		$	18,185		$	1,076
Current income tax liabilities
Income tax payable		$	67,715		$	73,017

(3) Current income tax assets and liabilities

231

(4) Deferred income tax assets and liabilities

Movements of deferred tax assets and deferred tax liabilities:

2019

Deferred income tax assets Temporary differences Gains or losses on foreign investment accounted for using equity method Exchange differences resulting from translation of foreign operation Allowance for inventory write-downs Allowance for doubtful accounts Differences in useful lives of depreciation Differences arising from unrealized profits or losses Deferred income tax liabilities Temporary differences Gains or losses on foreign investments accounted for using equity method Differences on contribution of defined benefit retirement plan Differences arising from unrealized profits or losses	Balance at J an u a ry1 $ 438 29,590 7,248 4,622 4,109 315 $ 46,322 $ 230,867 2,945 7,372 $ 241,184	Recognized in Profit or L o s s $ 728 - ( 3,274 ) ( 2,027 ) ( 13 ) 7,245 $ 2,659 $ 69,584 ( 1 ) ( 812) $ 68,771	Recognized i n O t h e r Comprehensi ve Income $ - 38,240 - - - - $ 38,240 $ - - - $ -	Differences A r i s i n g F r o m C u r r e n c y E x c h a nge $ - - ( 153 ) ( 100 ) ( 162 ) - ($ 415) $ - - ( 259) ($ 259)	Balance at December 31	Balance at December 31
						$ 1,166 67,830 3,821 2,495 3,934 7,560 $ 86,806 $ 300,451 2,944 6,301 $ 309,696

232

2018

2018
Deferred income tax assets Temporary differences Gains or losses on foreign investment accounted for using equity method Exchange differences resulting from translation of foreign operation Allowance for inventory write-downs Allowance for doubtful accounts Differences in useful lives of depreciation Differences arising from unrealized profits or losses Deferred income tax liabilities Temporary differences Gains or losses on foreign investments accounted for using equity method Differences on contribution of defined benefit retirement plan Differences arising from unrealized profits or losses	Balance at J an u a ry1 $ 344 17,244 6,639 4,499 2,027 5,775 $ 36,528 $ 156,771 2,500 4,834 $ 164,105	Recognized in Profit or L o s s $ 94 - 738 205 2,158 ( 5,455) ($ 2,260) $ 74,096 445 2,671 $ 77,212	Recognized i n O t h e r Comprehensi ve Income $ - 12,346 - - - - $ 12,346 $ - - - $ -	Differences A r i s i n g F r o m C u r r e n c y E x c h a nge $ - - ( 129 ) ( 82 ) ( 76 ) ( 5) ($ 292) $ - - ( 133) ($ 133)	Balance at December 31
		( (				$ 438 29,590 7,248 4,622 4,109 315 $ 46,322 $ 230,867 2,945 7,372 $ 241,184

233

(5) Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Expiry in 2022 Expiry in 2023 Deductible temporary differences Allowances for inventory write-downs Allowance for doubtful accounts Other book-tax differences	December 31,2019 $ 7,027 21,634 $ 28,661 $ 35,394 820 7,840 $ 44,054	December 31,2018
		$ 9,008 21,634 $ 30,642 $ 35,107 1,150 6,839 $ 43,096

(6) Approval of income tax

The Group’s income tax has been approved by competent tax collection authorities to the year of 2017.

24. Earnings Per Share

Basic earnings per share Generated from continuing operations Diluted earnings per share Generated from continuing operations		2019 $ 7.60 $ 6.99	Unit	: NT$ Per Share 2018
				$ 6.10 $ 5.69

The earnings and weighted average number of common shares outstanding used in the computation of earnings per share were as follows:

Net income for the year ended

Net income for the year ended
Profit attributable to ordinary shareholders of the parent Effects of potentially dilutive ordinary shares: Interest on convertible bonds after tax Earnings used in the computation of diluted earnings per share		2019 $ 622,427 10,362 $ 632,789		2018
				$ 499,709 9,267 $ 508,976

234

Shares Weighted average number of ordinary shares used in computation of basic earnings per share Effects of potentially dilutive ordinary shares: Convertible bonds Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		Unit: In 2019 81,934 8,380 160 90,474	Thousands of Shares 2018	Thousands of Shares 2018
				81,934 7,368 195 89,497

If the consolidated company offered to settle compensation paid to employees in cash or shares, assumed the entire amount of the compensation will be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the shares have a dilutive effect. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

25. CASH FLOW INFORMATION

Non-cash transactions

The consolidated company obtained property、plant and equipment in faie value amount to NT$ 720,359 thousand, prepayments of equipments in amount to less NT$ 229,672 thousand, payments of equipments in amount to less NT$56,545 thousand, totally paid NT$ 547,232 thousand in 2019.( Note 11)

The consolidated company obtained property、plant and equipment in faie value amount to NT$ 1,258,071 thousand, prepayments of equipments in amount to less NT$ 188,367 thousand, payments of equipments in amount to less NT$123,172 thousand, totally paid NT$ 1,192,876 thousand in 2018.( Note 11)

26. Capital Risk Management

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

235

The capital structure of the consolidated company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the consolidated company (comprising issued share capital, capital reserves, retained earnings, and other equity). The consolidated company is not subject to any externally imposed capital requirements.

Management quarterly reviews the consolidated company’s capital structure and considers the costs and risks of different capital structures, and balances the consolidated company’s capital structure by paying dividends and issuing new shares, share repurchases, raising new debts or paying back old debts.

27. Financial Instruments

－
(1) Information on fair value Financial instruments that are not measured at fair value

When the carrying amounts of financial assets and financial liabilities that are not measured at fair value are so near their maturity or the future exit prices are equivalent to their fair values, management of the consolidated company believed that the carrying amounts approximate their fair values.

－
(2) Information on fair value Fair value of financial instruments that are measured at fair value on a recurring basis
Fair value hierarchy

December 31, 2019

L e v e l 1 L e v e l 2 L e v e l 3 T o t a l Financial assets at FVTPL Convertible bonds redemption rights $ - $ - $ 1,050 $ 1,050 December 31, 2018 L e v e l 1 L e v e l 2 L e v e l 3 T o t a l Financial assets at FVTPL Convertible bonds redemption rights $ - $ - $ 600 $ 600 There were no transfers between Level 1 and 2 for the years ended December 31, 2019 and 2018.

236

Reconciliation of Level 3 fair value measurements of financial instruments

2019

2019
F i n a n c i a l a s s e t s Balance at January 1 New addition Recognized in profit or loss（accounted for as other profit or loss） Balance at December 31 2018 F i n a n c i a l a s s e t s Balance at January 1 New addition Recognized in profit or loss（accounted for as other profit or loss） Balance at December 31	A t F V T P L
	D e r i v a t i v e s－ Convertible Bonds Redemption Rights
	A t	$ 600 - 450 $ 1,050 F V T P L
	D e r i v a t i v e s－ Convertible Bonds Redemption Rights
	(	$ - 2,257 1,657) $ 600

Valuation techniques and assumptions used in Level 3 fair value measurement

Derivatives – convertible bond redemption, were determined using the binary tree pricing to convertible bond valuation model. A significant unobservable input would include stock price volatility. An increase in stock price volatility would result in an increase in fair value of the derivatives. The stock price volatility adopted on December 31, 2019 and 2018 were 44.61% and 48.5%.

If the following input values were changed to reflect a reasonably possible alternative hypothesis, when all other inputs remain unchanged, the amount of increase (decrease) in the fair value of the redemption right would be as follows:

Volatility Increase 1% Decrease 1%	December 31,2019 $ 10 ($ -)	December 31,2018	December 31,2018
	(	(	$ 10 $ 10)

237

(3) Categories of financial instruments

December 31, 2019 December 31, 2018

Financial assets At FVTPL Mandatorily at FVTPL $ 1,050 $ 600 Financial assets at amortized cost (Note 1) 4,057,558 2,865,280 Financial liabilities At amortized cost（Note 2） 5,390,764 4,591,203

Note 1：The balances included cash and cash equivalents, notes receivable, accounts receivable, other receivables, other financial assets and refundable deposits that are financial assets measured at amortized cost.

Note 2：The balances included current borrowings, accounts payable, other payables, bond payables, non-current portion of non-current borrowings and refundable deposits that are financial liabilities measured at amortized cost.

(4) Financial risk management objectives and policies

The consolidated company’s major financial instruments include accounts receivable, borrowings and bonds payable. Financial risks relating to the operations of the consolidated company include market risks (including currency risk and interest rate risk), credit risks and liquidity risks. The consolidated company is committed to ensure the sufficiency and cost efficiency of cash to meet operational needs. The consolidated company prudentially manages the currency risk, equity instrument price risk, credit risk and liquidity risk those relating to its operations, to avoid the potential downside effects on The Group’s financial performance derived from uncertainty of market.

Market risk

(1) Foreign currency risk

Sales and purchases denominated in foreign currencies undertook by the subsidiaries of The Group, had exposed The Group to foreign currency risk. A dedicated unit of consolidated company reviews assets and liabilities’ positions affected by currency exchanges on a regular basis, and adequate hedging instruments are used to manage risks arising from foreign currency fluctuations.

238

At the consolidated company balance sheet date, the carrying amounts of monetary assets and liabilities denominated in non-functional currency was as follow.

Assets USD Liabilities USD	December 31,2019 $ 1,880,379 760,619	December 31,2018
		$ 1,831,810 1,208,938

Sensitivity analysis

The consolidated company was mainly exposed to the U.S. dollar. The sensitivity analysis of a 1% increase and decrease in the functional currency against USD was the risk of change in foreign currency reported to internal key managerial personnel, it also represents the managerial personnel’s assessment in relation to reasonably possible change in foreign currency.

The sensitivity analysis includes carrying amounts of monetary assets and liabilities denominated in nonfunctional currency on balance sheet date, and the effect of a 1% increase or decrease in foreign currency at end of year. A positive number below indicates an increase in pre-tax profit associated with the U.S. dollar strengthening against the relevant currency while other conditions held constant.

Losses and gains		2019 $ 11,198		2018
				$ 6,229

(2) Interest rate risk

Taking loans with floating interest rate had exposed the consolidated company to interest rate risk. The consolidated company adopted a policy of taking loans with floating interest rate as a means to mitigate risk arising from changes in interest rates. Therefore, the managerial personnel assessed that the effects of taking floating interest rate loans is not significant.

Interest rates applied over bank deposits the consolidated company held are relatively stable, therefore, revenue and operating cash flows of the consolidated company are not affected by changes in market rates.

Carrying amounts of financial assets and financial liabilities exposed to interest rate risk were as below:

239

Cash flow interest rate risk －Financial assets －Financial liabilities	December 31,2019 $ 2,202,863 2,660,798	December 31,2018
		$ 1,324,467 1,922,789

The sensitivity analysis described below was based on the non-derivative instruments exposed to interest rates risks at the end of the reporting period.

Sensitivity analysis

A 0.5% increase or decrease in interest rate is a reasonable risk assessment reported to managerial personnel. If all other conditions held constant and interest capitalization is not took into consideration, interest rates had increased by 0.5%, the consolidated company’s pretax profit for the years ended December 31, 2019 and 2018 would have decreased by $2,290 thousand and $2,992 thousand, respectively,

2. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to The Group. As at the end of the reporting period, the consolidated company’s maximum exposure to credit risk which will cause a financial loss to the consolidated company due to failure of counterparties to discharge an obligation derived from accounts receivable. The consolidated company will review recoverable amounts of accounts receivable item-by-item to ensure the uncollectible accounts receivable been recognized as impairment loss as appropriate. Therefore, a significant credit risk is not expected to occur. Overdues and impairments are detailed in Note 8.

3. Liquidity risk

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

The consolidated company relies on bank borrowings as a significant source of liquidity. The Group’s unutilized overdraft and bank loan facilities amounted to NT$ 1,453,957 thousand, NT$ 2,577,772 thousand as of December 31, 2019 and 2018 respectively.

240

Liquidity and interest rate risks of non-derivative liabilities

An analysis of remaining contractual maturity of the non-derivative financial liabilities is prepared based on the undiscounted cash flow (including principal and estimated interest) of financial liabilities from the earliest date on which the consolidated company can be required to pay. Therefore, bank loans with repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To extent that interest flows are floating rate, the undiscounted amount was derived from the yield curve at the end of the reporting period.

December 31, 2019

Non-derivative financial liabilities Current borrowings Accounts payable Other payables Bonds payable er 31, 2018 Non-derivative financial liabilities Current borrowings Accounts payable Other payables Non-current portion of non-current borrowings Bonds payable	Weighted- a v e r a g e e f f e c t i v e interest rate （％） 1.64 - - 0.073 Weighted- a v e r a g e e f f e c t i v e interest rate （％） 1.55 - - 3.7 0.073		Less than 1 year $ 2,660,798 435,161 809,088 - $ 3,905,047 Less than 1 year $ 1,830,644 344,918 850,728 - - $ 3,026,290		1-5 years $ - - - 1,485,631 $ 1,485,631 1-5 years $ - - - 95,554 1,472,679 $ 1,568,233		Over5 years
							$ - - - - $ - Over5 years
							$ - - - - - $ -

December 31, 2018

241

28. Related Parties Transaction

Transactions, balances, income and expenses between The Group and its subsidiaries, which are related parties of The Group, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the consolidated company and other related parties are disclosed below.

(1) Names and relationships of related parties

Related Party Name SIXXON PRECISION MACHINERY CO.,LTD. （henceforth referred to as「SIXXON」） SIXXON PRECISION MACHINERY CO.,LTD. （henceforth referred to as「SIXXON」） – GLOBAL THAIXON PRECISION INDUSTRY CO.,LTD.（henceforth referred to as「GT」）

Related Party Category Investor with significant influence Other related parties

Other related parties

(2) Operating revenue

Item Related Party Category/ Name 2019 Sales revenue Other related parties $ 21,867 Purchase Related PartyCategory/ Name 2019 SIXXON $ 216,192		2019				2018
						$ 31,477 2018
					$ 159,619

(3) Purchase
(4) Receivables from related parties（excluding loans to related parties）

Item Accounts receivable Item Other receivables	Related Party Category/ Name SIXXON GT Related Party Category/ Name SIXXON GT	December 31, 2019 $ - 27 $ 27 December 31, 2019 $ 6,482 1,785 $ 8,267	December 31, 2018	December 31, 2018
			$ 16,330 - $ 16,330 December 31, 2018
				$ 26 - $ 26

242

(5) Payables to related parties（excluding borrowings from related parties）

Item Accounts payable Other payables	Related Party Category/ Name SIXXON SIXXON	December 31, 2019 $ 78,517 $ 348	December 31, 2018	December 31, 2018
				$ 59,301 $ 12,438

Terms and conditions for sales and purchases of goods from related parties are the same as that of general transactions.

The outstanding accounts receivable from related parties and accounts payable to related parties are unsecured and are settled in cash. No guarantees are provided or received for accounts receivable from related parties, hence no bad debt expenses are recognized for years ended December 31, 2019 and 2018.

(6) Acquisitions of property, plant and equipment

Related Party Category/Name Other related parties		Purchase Price	Purchase Price	Purchase Price
		For the Year Ended		December 31
		2019		2018
		$ -		$ 18,552

(7) Disposals of property, plant and equipment

Proceeds For the Year Ended December31 2019 2018 $ 8,656 $-	Proceeds For the Year Ended December31 2019 2018 $ 8,656 $-	Gain (Loss) on Disposal	Gain (Loss) on Disposal
		For the Year Ended December31
2019 $ 8,656		2019 ($ 1,132 )	2018
	$-		$-

(8) Lease arrangements - Group is lessee

Item Rent expenses	Related Party Category/ Name Investor with significant influence		2019 $ 180		2018
					$ 180

(9) Lease arrangements - Group is lessor

The balance of operating lease receivables was as follows:

Item Rent income	Related Party Category/ Name SIXXON		2019 $ -		2018
					$ 200

243

(10) Lease arrangements - Group is lessor

Item Refundable deposit Item Professional service fees Development expenses	Related Party Category/Name SIXXON Related Party Category/Name Other related parties Other related parties	December 31, 2019 $ 200 2019 $ - $ 3,344	December 31, 2018	December 31, 2018
				$ 200 2018
				$ 383 $ 1,209

(11) Transactions with other related parties

ransactions with other related parties
Short-term employee benefits Post-employment benefits		2019 $ 28,626 223 $ 28,849		2018
				$ 26,184 250 $ 26,434

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

29. Pledged Asset

The following assets were provided as collateral for bank borrowings, the guarantees of import and export, listed accounts and carrying values of the assets were provided as below:

Long-term lease prepayments Buildings Other financial assets	December 31,2019 $ - - 23 $ 23	December 31,2018	December 31,2018
			$ 7,950 142,935 23 $ 150,908

30. Significant Contingent Liabilities and Unrecognized Commitments:

Global PMX Co.,Ltd. (in Jiaxing),the consolidated company 's subsdiary,commited outsourcing engineering to build plants, the charge of contract in engineering designed and constructions in amount to NT$ 384,335 thousand (RMB 89,433 thousand), totally unpaid NT$ 228,367 thousand(RMB 53,140 thousand).

31. Significant Disaster Loss: None.

244

32. Significant Events after the Balance Sheet Dates:

The Group approved the resolution of SIXXON PRECISION MACHINERY CO., LTD. On September 30, 2019 by the board of directors.And on November 19, 2019, the shareholders' interim meeting approved the share conversion of SIXXON PRECISION MACHINERY CO., LTD. held by SIXXON PRECISION MACHINERY CO., LTD. This share conversion ratio is based on SIXXON PRECISION MACHINERY CO., LTD. for every 1.25 shares of common shares issued by The Group's 1 ordinary shares. The trading industry was approved by the Financial Supervisory Commission Republic of China on January 14, 2020. However, SIXXON PRECISION MACHINERY CO., LTD. is a foreign company, it is necessary to declare to the Investment Board, Ministry of Economic Affairs in accordance with relevant laws and regulations and approve it. The Group has obtained the Investment Board, Ministry of Economic Affairs approval letter on March 11, 2020, and the share conversion basic date was changed to April 13, 2020 by the board of directors on March 23, 2020.

33. Significant Assets and Liabilities Denominated in Foreign Currencies

The following information was a disclosure of the significant assets and liabilities denominated in foreign currencies other than the functional currencies of the group entities and the exchange rates used in translations between the foreign currencies and respective functional currencies.

	December 31, 2019 Foreign currencyassets Monetary items USD CNY EUR JPY HKD	F o r e i g n C u r r e n c y $ 62,721 41,355 8,407 6,710 1,072	Exchange Rate 29.98 4.305 33.59 0.276 3.849	C a r r y i n g A m o u n t
				$ 1,880,379 178,034 282,401 1,852 4,125

Foreign currencyliabilities USD CNY EUR JPY HKD	F o r e i g n C u r r e n c y $ 25,371 1,758 5,189 1,683,229 495	Exchange Rate 29.98 4.305 33.59 0.276 3.849	C a r r y i n g A m o u n t
			$ 760,619 7,567 174,311 464,571 1,905

245

December 31, 2018

Foreign currencyassets Monetary items USD CNY EUR JPY HKD Foreign currencyliabilities USD EUR JPY HKD	F o r e i g n C u r r e n c y $ 59,639 31,368 4,950 2,467 1,008 39,360 4,923 1,692,238 591	Exchange Rate 30.715 4.472 35.2 0.2782 3.921 30.715 35.2 0.2782 3.921	C a r r y i n g A m o u n t
			$ 1,831,810 140,277 174,223 686 3,954 1,208,938 173,306 470,780 2,317

The consolidated company was exposed primarily to the exchange rates risks derived from translations among TWD, CNY and USD. The following information is a disclosure of the significant assets and liabilities denominated in foreign currencies other than the functional currencies of the group entities and the exchange rates used in translations between the foreign currencies and respective functional currencies. Profits or losses derived from exchanges among foreign currencies with significant influences were stated as below:

F u n c t i o n a l C u r r e n c y TWD CNY USD	2019			2018
	T r a n s l a t i o n f r o m Functional Currency to the Presentation Currency 1（TWD：TWD） 4.4821（CNY：TWD） 30.912（USD：TWD）	N e t F o r e i g n Exchange Gain or L o s s		T r a n s l a t i o n f r o m Functional Currency to the Presentation Currency 1（TWD：TWD） 4.5599（CNY：TWD） 30.149（USD：TWD）	N e t F o r e i g n Exchange Gain or L o s s
		( ( ( (	$ 28,649 ) 212 ) 24,025) $ 52,886)		( ( (	$ 31,032 28,773 ) 83,304) $ 81,045)

34. Supplementary Disclosure

(1) Information on significant transactions and (2) information on investees:
Financing provided to others:（Table 1）
Endorsements/guarantees provided:（Table 2）
Marketable securities held at the end of reporting period: None.

246

Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital: None
Acquisition of individual real estate at costs of at least NT $300 million or 20% of the paid-in capital: None
Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None
Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: (Table 3)
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: (Table 4)
Trading in derivative instruments: None.
Others: Intercompany relationships and significant intercompany transactions: （Table 5）
Information on investees:（Table 6）
(2) Information on investments in Mainland China:
Information on any investee company in Mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding ratio, investment gains or losses, carrying amount of the investment at the end of the period, repatriated investment gains or losses, and limit on the amount of investment in the Mainland China area: (Table 7)
Any of the significant transactions with investee companies in Mainland China, either directly or indirectly through a third area, and their prices, payment terms, and unrealized gains or losses: (Table 7)
- (1) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- (2) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- (3) The amount of property transactions and the amount of the resultant gains or losses

247

(4) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
(5) The maximum balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
(6) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.

35. Segment Information

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on financial information on a per plant basis. As each plant shares similar economic characteristics, produces similar products by using similar production process and all of products produced are distributed and sold to the same level of customers through a central sales function, the group segments are aggregated into a single reportable segment. In addition, segment information and bases of measurement reported to the chief operating decision maker are consistent with those presented in the consolidated financial statements. The reportable segment revenues as of December 31, 2019 and 2018, and operating results and measured values of assets for the years ended December 31, 2019 and 2018 can be referred to the consolidated statements of comprehensive income for the years ended December 31, 2019 and 2018. The segment assets as of December 31, 2019 and 2018 can be referred to the consolidated balance sheets as of December 31, 2019 and 2018.

(1) Revenue from major products

The following is an analysis of the revenue from the major products of the units within the consolidated company to continue as a going concern:

Automobile Electronics Medical Semiconductor Others		2019 $ 3,585,934 652,533 682,695 77,169 15,767 $ 5,014,098		2018
				$ 3,234,327 492,489 561,802 126,917 9,304 $ 4,424,839

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(2) Geographic information

The consolidated company primarily operates in United States, Mainland China and Japan.

Revenue of the units within the consolidated company to continue as a going concern generated from external customers by location of operations and information about their non-current assets by location of assets are detailed below.

R evenue from External

Asia North America Europe	C u s t o	C u s t o	C u s t o	m e r s 2018 $ 2,883,336 872,758 668,745 $ 4,424,839	N o n - C u r r e	N o n - C u r r e	n	t A s s e t s
		2019 $ 3,407,055 923,094 683,949 $ 5,014,098				December 31, 2018 $ 3,792,580 - - $ 3,792,580		December 31, 2017
								$ 3,941,051 - - $ 3,941,051

Non-current assets excluded assets classified as financial instruments and deferred income tax assets.

(3) Information about major customers

Single customers who contributed 10% or more to the consolidated company’s revenue were as follows:

Customer T Customer S Customer C Customer W Customer D Customer B		2019 $ 958,894 652,533 527,487 846,160 609,309 769,453 $ 4,363,836		2018
				$ 702,679 492,489 445,337 809,281 287,919 862,209 $ 3,599,914

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Global PMX Co., Ltd. and Subsidiaries

Financing Provided to Others For The Year Ended December 31, 2019

Table 1

Unit: Amounts in Thousands of New Taiwan Dollars

No.	Financing Company	Counter-Party	Financial Statement Account	Related Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Interest Rate	Nature for Financing	Transaction Amount	Reason for Short-Term Financing	Allowance for Bad Debt	Collateral Item	Collateral Value	Financing Limit for Each Borrowing Company	`F`inancing Company’s Total Financing Amount Limits	Note
1 2 3	GLOBAL ADVANCE TECHNOLOGY LIMITED Seamax Manufacturing Co.,Ltd.(in Dongguan) GLOBAL PMX CO., LTD.(in Dongguan)	GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD.(in Zhejiang)	Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes	$ 1,871,602 210,691 211,569	$ 1,804,631 - -	$ 1,519,821 - -	2%~5% - -	Short-term financing needs Short-term financing needs Short-term financing needs	$ - - -	Operating capital Operating capital Operating capital	$ - - -	- - -	$ - - -	$ 6,560,372 1,703,492 617,512	$ 6,560,372 1,703,492 617,512	Note 2 Note 3 Note 4

Note 1： The maximum financing amount provided by The Group is calculated as follows：

(1) Nature of financing attributed to business transaction, each separately financing amount shall not exceed amount of transactions between two parties, aggregate financing amount shall not exceed 20% of net worth of The Group for the period. Transaction amount refers to the higher of purchases or sales between two parties within the latest year. Nature for financing attributed to short-term financing needs, each separately financing amount shall not exceed 20% of net worth of The Group for the period, and aggregate financing amount shall not exceed 40% of net worth of The Group for the period.
(2) Foreign company loans between overseas companies in which The Group holds directly or indirectly 100% of the voting shares, and financing limits for each entity, as well as limits on aggregate financing amount shall not exceed 200% of net worth of the company’s lending fund. Maximum limit on financing shall not exceed 200% of net worth of the company’s lending fund..
Note 2: The total amount of GLOBAL ADVANCE TECHNOLOGY LIMITED available for lending to GLOBAL PMX CO., LTD. (in Zhejiang) are limited to a net value of equity, computed as NT$3,280,186 thousand multiplied by 200% equal to NT$6,560,372 thousand.
Note 3: The total amount of SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) available for lending to GLOBAL PMX CO., LTD. (in Zhejiang) are limited to a net value of equity, computed as NT$851,746 thousand multiplied by 200% equal to NT$1,703,492 thousand.
Note 4: The total amount of GLOBAL PMX CO., LTD.(in Dongguan) available for lending to GLOBAL PMX CO., LTD. (in Zhejiang) are limited to a net value of equity, computed as NT$308,756 thousand multiplied by 200% equal to NT$617,512 thousand.Global PMX Co., Ltd. and Subsidiaries

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Global PMX Co., Ltd. and Subsidiaries Endorsements/Guarantees Provided For the Year Ended December 31, 2019

Table 2

Unit: Amounts in Thousands of New Taiwan Dollars

No.	Endorsement/ Guarantee Provider	Endorsee/Guarantee	Endorsee/Guarantee	Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount Of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/Gu arantee to Net Equity Per Latest Financial Statements（％）	Maximum Endorsement/ Guarantee Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
0 0 0	GLOBAL PMX CO., LTD. GLOBAL PMX CO., LTD. GLOBAL PMX CO., LTD.	FORTUNE TOWER HOLDING CO., LTD SEAMAX MANUFACTURING PTE. LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED	Subsidiary A subsidiary directly holding over 50% of the common shares. A subsidiary directly holding over 50% of the common shares.	$ 4,978,109 4,978,109 4,978,109	$ 31,600 266,815 3,133,875	$ 29,980 254,830 3,080,445	$ 29,980 239,840 1,106,446	$ - - -	0.96 8.19 99.01	$ 6,222,636 6,222,636 , 6,222,636	Y Y Y	N N N	N N N	Note 1 Note 1 Note 1

Note 1: According to The Group’s operational procedures for endorsement/guarantee provided to others, the calculation for endorsement/guarantee limits is as below:

(1) The Group’s aggregate amount of endorsement/ guarantee provided to others shall not exceed 200% of net worth of The Group for the period. Accumulated amount of endorsement/guarantee provided to a single entity shall not exceed 160% of net worth of The Group. If an endorsement/guarantee provided to a single entity is made due to needs arising from business transactions, in addition to aforementioned requirements, amount of endorsement/guarantee provided shall not exceed total transaction amount with The Group for latest fiscal year (the higher of purchases or sales between two parties)

(2) Pursuant to requirements mentioned above, ceilings on endorsement/guarantee provided to others equals to net worth of The Group computed as NT$3,111,318 thousand multiplied by 200% equals 6,222,636 thousand, and ceilings on endorsement/guarantee provided to a single entity are equivalent to net worth of The Group computed as NT$3,111,318 thousand multiplied by 160% equals to NT$ 4,978,109 thousand.

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Global PMX Co., Ltd. and Subsidiaries Total Purchases From or Sales to Related Parties Amounting to At Least NT$100 Million or 20% of the Paid-In Capital For The Year Ended December 31, 2019

Table 3

Unit: Amounts in Thousands of New Taiwan Dollars

Purchase (Sales) Company	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details		Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)Purchase	Notes/Accounts Receivable (Payable)Purchase	Note
			Purchase/Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	EndingBalance	% to Total
SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SEAMAX MANUFACTURING PTE., LTD. (in Dongguan) SEAMAX MANUFACTURING PTE., LTD. (in Dongguan) GLOBAL PMX CO., LTD. (in Zhejiang)	GLOBAL PMX CO., LTD. GLOBAL PMX CO., LTD. (in Zhejiang) GLOBAL PMX CO., LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SEAMAX INTERNATIONAL LTD.	Parent and subsidiary The same ultimate parent company Parent and subsidiary The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sale Sale Sale Sale Sale Sale	1,115,985 234,075 519,097 283,656 519,872 834,190	83% 17% 100% 28% 51% 26%	90 days after monthly closing 90 days after monthly closing 90 days after monthly closing 90 days after monthly closing 90 days after monthly closing 90 days after monthly closing	- - - - - -	- - - - - -	Accounts receivable 213,029 Accounts receivable 222,428 Accounts receivable 258,728 Accounts receivable 115,241 Accounts receivable 258,728 Accounts receivable 66,764	49% 52% 100% 25% 56% 6%

Note: Long-term equity investment attributable to consolidated entity accounted for by using equity method has been reconciled and offset.

252

Global PMX Co., Ltd. and Subsidiaries Receivables from Related Parties Amounting to At Least NT$100 Million or 20% of the Paid-In Capital December 31, 2019

Table 4

Unit: Amounts in Thousands of New Taiwan Dollars

Table 4					Unit: A	Unit: A	mounts in Thousands o	f New Taiwan Dollars
Company Name	Related Party	Nature of Relationships	Balance of Accounts Receivable from Related Parties	Turnover Ratio	Overdue Receivable-Related Parties		Amount Received in Subsequent Period	Allowance for Bad Debt
					Amount	Action Taken
GLOBAL PMX CO., LTD. SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) GLOBAL ADVANCE TECHNOLOGY LIMITED	SEAMAX INTERNATIONAL LTD. GLOBAL PMX CO., LTD. GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED GLOBAL PMX CO., LTD.(in Zhejiang)	Parent and subsidiary Parent and subsidiary The same ultimate parent company Parent and subsidiary The same ultimate parent company The same ultimate parent company Parent and subsidiary	$ 224,233 213,029 222,428 258,728 115,241 258,728 1,594,013	0.49 times／ year 4.96 times／ year 0.49 times／ year 2.38 times／ year 1.92 times／ year 2.38 times／ year Note 2	$ - - - - - - -	— — — — — — —	$ 36,919 122,175 35,113 99,741 24,513 54,308 -	$ - - - - - - -

Note 1：Long-term equity investment attributable to consolidated entity accounted for by using equity method has been reconciled and offset. Note 2：The calculation of turnover ratio excludes other receivables.

253

Global PMX Co., Ltd. and Subsidiaries Intercompany Relationships and Significant Intercompany Transactions For the Year Ended December 31, 2019

Table 5

Unit: Amounts in Thousands of New Taiwan Dollars

No. （Note 1）	Company Name	Counterparty	Relationship （Note 2）		Transaction	Details
				Listed Account	Amount	Payment Term	Percentage to Consolidated Total Revenue or Total Assets （Note 3）
0 0 0 0 0 1 1 1 1 1 1 2 2 3 4 4	GLOBAL PMX CO., LTD GLOBAL PMX CO., LTD GLOBAL PMX CO., LTD GLOBAL PMX CO., LTD GLOBAL PMX CO., LTD SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED ACE PLUS TECHNOLOGY LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD.(in Zhejiang)	SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED ACE PLUS TECHNOLOGY LIMITED SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD.(in Zhejiang) GLOBAL PMX CO., LTD.(in Zhejiang) SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) GLOBAL PMX CO., LTD.(in Zhejiang) SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) SEAMAX MANUFACTURING PTE.,LTD.(in Dongguan)	1 1 1 1 1 3 3 3 3 3 3 3 3 1 3 3	Accounts receivable（payable） Accounts payable（receivable） Purchase（sales） Accounts payable（receivable） Purchases（sales） Accounts payable（receivable） Purchases（sales） Accounts receivable（payable） Accounts payable（receivable） Sales（Purchases） Purchases（sales） Accounts payable（receivable） Purchases（sales） Other receivables（payables） Accounts payable（receivable） Purchases（sales）	$ 224,233 213,029 1,115,985 258,728 519,097 115,241 283,656 222,428 66,764 234,075 834,190 258,728 519,872 1,594,013 11,653 23,725	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	3 2 22 3 10 1 6 3 1 5 17 3 10 18 - -

Note 1: Parties to the intercompany transactions are identified and numbered as follows:
(1) Number 0 represents the parent company.
(2) Subsidiaries are numbered in an order starting from 1.

Note 2: Relationship with counterparty is classified into the following three categories, fill in the number of category each case belongs to:

(1) Parent company to subsidiary
(2) Subsidiary to parent company
(3) Subsidiary to subsidiary

254

Note 3: In regarding to percentage of transaction amount to consolidated total operating revenues or total assets, provided that account attributable to assets and liabilities, it is computed based on period-end balance of transaction to consolidated total assets. For account attributable to income and expenses, it is computed based on accumulated transaction amount for the period to consolidated total operating revenues.

Note 4: Similar transactions are not available. The payment terms are subject to mutual agreements based on operation needs. Note 5: Transactions mentioned above are offset in consolidated financial statements.

255

Global PMX Co., Ltd. and Subsidiaries Name, Location and Other Related Information of Investees For the Year Ended December 31, 2019

Table 6

Unit: Amounts in Thousands of New Taiwan Dollars

Investor Company	Investee Company	Location	Primary Business Activities	Original Investment Amount	Original Investment Amount	Shares Held as of December 31,2019	Shares Held as of December 31,2019	Shares Held as of December 31,2019	Net Income (Loss) of Investee for the Period	Investment Income (Loss) Recognized by The Group for the Period	Note
				December 31, 2019	December 31, 2018	Share	Percentage （％）	Carrying Amount
GLOBAL PMX CO., LTD. GLOBAL PMX CO., LTD. GLOBAL PMX CO., LTD. FORTUNE TOWER HOLDING CO., LTD. FORTUNE TOWER HOLDING CO., LTD. FORTUNE TOWER HOLDING CO., LTD.	FORTUNE TOWER HOLDING CO., LTD SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED SEAMAX MANUFACTURING PTE. LIMITED GLOBAL WIN LIMITED GLOBAL ADVANCE TECHNOLOGY LIMITED	TMF Chambers,P.O. Box 3269, Apia, Samoa Offshore Chambers ,P.O.Box 217,Apia, Samoa Offshore Chambers ,P.O.Box 217,Apia, Samoa 1004AXA Centre, 151 Gloucester Road, Wan Chai, Hong Kong Offshore Chambers ,P.O.Box 217,Apia, Samoa Offshore Chambers ,P.O.Box 217,Apia, Samoa	General investment Import and export of goods Import and export of goods General investment General investment General investment	$ 2,990,017 28,995 1,564 363,000 364,103 2,235,534	$ 2,681,767 28,995 1,564 363,000 364,103 1,927,104	100,750 1,000 50 12,200 10,000 72,750	100.00 100.00 100.00 100.00 100.00 100.00	$ 4,145,933 30,562 1,356 609,486 345,130 3,280,186	$ 347,859 60 ( 43 ) 94,961 2,884 264,947	$ 344,261 60 ( 43 ) 94,961 2,884 264,947

Note: Long-term equity investment attributable to consolidated entity accounted for by using equity method has been reconciled and offset.

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Information on Investments in Mainland China

For the Year Ended on December 31, 2019

Unit: Amounts in Thousands of New Taiwan Dollars

Global PMX Co., Ltd. and Subsidiaries

Table 7

The investee company in Mainland China, primary business activities, paid-in capital, method of investment, remittance of funds, ownership of investment, investment gain or loss, carrying amount of the investment, and accumulated repatriation of investment:

Investee company in Mainland China	Primary Business Activities	Paid-In Capital	Method of Investmen t （Note 1）	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment From Taiwan as of December 31, 2018	Net Income of the Investee for the Period	% Ownership of Direct or Indirect Investment	Investment Gain or Loss for the Period (Note 2)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Income as of December 31, 2018	Note
					Outward	Inward
SEAMAX MANUFACTURING PTE., LTD. (in Dongguan) GLOBAL PMX CO., LTD. (in Dongguan) GLOBAL PMX CO., LTD. (in Zhejiang)	Productions and sales of hard-discs, industrial control components, fine blanking die, standard parts for die sets, advanced hardware, advanced construction hardware, plumbing equipment and hardware, new electronic components, key auto parts, anti-lock braking system. Production and sales of hard disc drive, new electronic components, plumbing equipment and hardware, key auto parts, anti-lock braking system. Development, research, production and sales of various large capacity optical disc/hard disc drivers and parts, semiconductor devices, new electronic components, digital cameras, precise online measuring instruments, fine blanking die, standard parts for die sets, and precise medical equipment, precise auto parts.	$ 359,046 294,300 1,459,120	2 2 2	$ 363,000 364,103 1,055,339	$ - - -	$ - - -	$ 363,000 364,103 1,055,339	$ 102,592 1,536 274,635	100.00 100.00 100.00	$ 102,592 1,536 274,635	$ 851,746 308,756 2,628,215	$ - 26,252 -

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GLOBAL PMX CO., Development, research, 600,700 2 292,450 308,250 - 600,700 2,610 100.00 2,610 570,481 LTD. production and sales of (in Jiaxing) auto parts, general components, Class 1 medical equipment, computer software/hardware, R&D of electronic components

Note 1: Methods of investment are classified into following three categories:

Direct investment in Mainland China
The Group invested in a company located in Mainland China indirectly through an existing company in the third country.
Others

Note 2: Investment income or loss mentioned above is recognized based on the financial statements of the parent company in Taiwan which were reviewed by its independent accountants for the correspounding periods.

2. Limit on investments in Mainland China

Accumulated Outward Investment Amount Upper Limit on the Amount Remittance for Investment A u t h o r i z e d b y of Investment Stipulated by C o m p a n y N a m e in Mainland China as of I n v e s t m e n t Investment Commission, D e c e m b e r 3 1 , 2 0 1 9 C o m m i s s i o n M O E A Global PMX Co., Ltd. $ 2,383,142 $ 3,312,578 $ - （Note）

Note：According to “Regulations screening of application to engage in technical cooperation in Mainland China”, The Group obtained the approval from the Industrial Development Bureau of Ministry of Economics Affairs issued to

Headquarters on October 24 2017, and effective on October 19, 2017, so the amount The Group invested in Mainland China is not subject to the upper limit on the amount investment stipulated by investment commission, MOEA.

Investee companies in Mainland China endorsed/guaranteed or provided collaterals by entities located in third area: None.
Financing provided to or from investee companies in Mainland China directly and indirectly through third area: Please refer to Table 1 for more information.
Other transactions incurred significant impacts on profit or loss for the period or financial position for the period: None

258

Attachment 2: Financial Statement for the Most Recent Fiscal Year, including an Auditor’s Report Prepared by a Certified Public Account

Independent Auditors’ Report

The Board of Directors and Shareholders

Global PMX Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statements of Global PMX Co., Ltd. (the ‘Company’), which comprise the parent company only balance sheets as of December 31, 2019 and 2018, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements (including a summary of significant accounting policies).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2019 and 2018, and its parent company only financial performance and its parent company only cash flow for years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

259

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of Global PMX Co., Ltd. for the year of 2019. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements for the year of 2019 are stated as follows:

Revenue Recognition

The Company’s sales of automotive parts in year of 2019 amounted for approximately 44% of total revenue. Based on the significant and Statements on Auditing Standards presupposes revenue recognition as a significant risk. We believe that the impact of the sales revenue recognition of automotive parts if actually realized on the financial statements is significant, it has been identified as a key audit matter. Please refer to Notes 4 (11) to the financial statements for the details of the information about the accounting policy for recognizing revenue.

Our key audit procedures performed in respect of the above area included the following:

Understood and tested the design and operating effectiveness of the internal controls over revenue recognition from specific sales customer.
Sampled and inspected the receivable records of the specific sales customer aforementioned, select the appropriate sample to examine the external supporting source documents, to verify whether the sales transaction actually occurred.
Inspected balance sheet to ascertain whether there have been any material sales returns or allowances in the current period and the subsequent period, and, if so, inquire about the reason and find out whether they have been adequately presented.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

The management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statement, management is responsible for

260

assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial

Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China, will always detected a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from errors as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty existed

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related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statement represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision, and performance of the Group audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended 2019 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

*** These financial statements are translated from the traditional Chinese version and are unaudited by a CPA.**

The engagement partners on the audit resulting in this independent auditors’ report are Weng, Roy and Kuo, Frida N.

Reference number of the FSC approval letter,

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Order no. Financial-Supervisory-Securities-Auditing-1010028123 of the Financial Supervisory Commission

Reference number of the FSC approval letter,

Order no. Financial-Supervisory-Securities-Auditing-1070323246 of the Financial Supervisory Commission

Deloitte & Touche

Taipei, Taiwan

Republic of China

March 23, 2020

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Global PMX Co., Ltd.

Parent Company Only Balance Sheet As of December 31, 2019 and 2018

In Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount ％ Amount ％ $ 1,128,533 18 $ 832,480 14 667,356 10 591,065 10 224,233 4 754,098 12 14,021 - 2,176 - 137 - 26 - 89,039 1 58,952 1 8,476 - 53,197 1 28,190 1 3,699 - 2,159,985 34 2,295,693 38 1,050 - 600 - 4,177,851 65 3,716,521 61 23,897 - 24,130 - 160 - 38 - 76,557 1 30,085 1 359 - 359 - 4,279,874 66 3,771,733 62 $ 6,439,859 100 $ 6,067,426 100 $ 808,000 13 $ 808,000 13 23,901 - 33,080 1 550,261 9 474,325 8 81,860 1 77,819 1 348 - 12,438 - 66,244 1 49,323 1 3,476 - 4,686 - 1,534,090 24 1,459,671 24 1,485,631 23 1,472,679 24 5,425 - 4,775 - 303,395 5 233,812 4 1,794,451 28 1,711,266 28 3,328,541 52 3,170,937 52 819,340 13 819,340 14 1,107,664 17 1,107,664 18 267,650 4 217,679 4 118,410 2 84,243 1 1,069,622 16 785,973 13 1,455,682 22 1,087,895 18 ( 271,368) (4) ( 118,410) ( 2) 3,111,318 48 2,896,489 48 $ 6,439,859 100 $ 6,067,426 100	In Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount ％ Amount ％ $ 1,128,533 18 $ 832,480 14 667,356 10 591,065 10 224,233 4 754,098 12 14,021 - 2,176 - 137 - 26 - 89,039 1 58,952 1 8,476 - 53,197 1 28,190 1 3,699 - 2,159,985 34 2,295,693 38 1,050 - 600 - 4,177,851 65 3,716,521 61 23,897 - 24,130 - 160 - 38 - 76,557 1 30,085 1 359 - 359 - 4,279,874 66 3,771,733 62 $ 6,439,859 100 $ 6,067,426 100 $ 808,000 13 $ 808,000 13 23,901 - 33,080 1 550,261 9 474,325 8 81,860 1 77,819 1 348 - 12,438 - 66,244 1 49,323 1 3,476 - 4,686 - 1,534,090 24 1,459,671 24 1,485,631 23 1,472,679 24 5,425 - 4,775 - 303,395 5 233,812 4 1,794,451 28 1,711,266 28 3,328,541 52 3,170,937 52 819,340 13 819,340 14 1,107,664 17 1,107,664 18 267,650 4 217,679 4 118,410 2 84,243 1 1,069,622 16 785,973 13 1,455,682 22 1,087,895 18 ( 271,368) (4) ( 118,410) ( 2) 3,111,318 48 2,896,489 48 $ 6,439,859 100 $ 6,067,426 100	In Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount ％ Amount ％ $ 1,128,533 18 $ 832,480 14 667,356 10 591,065 10 224,233 4 754,098 12 14,021 - 2,176 - 137 - 26 - 89,039 1 58,952 1 8,476 - 53,197 1 28,190 1 3,699 - 2,159,985 34 2,295,693 38 1,050 - 600 - 4,177,851 65 3,716,521 61 23,897 - 24,130 - 160 - 38 - 76,557 1 30,085 1 359 - 359 - 4,279,874 66 3,771,733 62 $ 6,439,859 100 $ 6,067,426 100 $ 808,000 13 $ 808,000 13 23,901 - 33,080 1 550,261 9 474,325 8 81,860 1 77,819 1 348 - 12,438 - 66,244 1 49,323 1 3,476 - 4,686 - 1,534,090 24 1,459,671 24 1,485,631 23 1,472,679 24 5,425 - 4,775 - 303,395 5 233,812 4 1,794,451 28 1,711,266 28 3,328,541 52 3,170,937 52 819,340 13 819,340 14 1,107,664 17 1,107,664 18 267,650 4 217,679 4 118,410 2 84,243 1 1,069,622 16 785,973 13 1,455,682 22 1,087,895 18 ( 271,368) (4) ( 118,410) ( 2) 3,111,318 48 2,896,489 48 $ 6,439,859 100 $ 6,067,426 100
Amount $ 1,128,533 667,356 224,233 14,021 137 89,039 8,476 28,190 2,159,985 1,050 4,177,851 23,897 160 76,557 359 4,279,874 $ 6,439,859 $ 808,000 23,901 550,261 81,860 348 66,244 3,476 1,534,090 1,485,631 5,425 303,395 1,794,451 3,328,541 819,340 1,107,664 267,650 118,410 1,069,622 1,455,682 ( 271,368) 3,111,318 $ 6,439,859	Amount $ 832,480 591,065 754,098 2,176 26 58,952 53,197 3,699 2,295,693 600 3,716,521 24,130 38 30,085 359 3,771,733 $ 6,067,426 $ 808,000 33,080 474,325 77,819 12,438 49,323 4,686 1,459,671 1,472,679 4,775 233,812 1,711,266 3,170,937 819,340 1,107,664 217,679 84,243 785,973 1,087,895 ( 118,410) 2,896,489 $ 6,067,426	％
		14 10 12 - - 1 1 - 38 - 61 - - 1 - 62 100 13 1 8 1 - 1 - 24 24 - 4 28 52 14 18 4 1 13 18 ( 2) 48 100
(	(

The accompanying notes are an integral part of the parent company only financial statements.

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Global PMX Co., Ltd.

Parent Company Only Statements of Comprehensive Income For the Years Ended December 31, 2019 and 2018

In Thousands of New Taiwan Dollars, Except Earnings Per Share

Code Operating revenue (Note 21 and 27) 4100 Sales revenue 4110 Sales revenue 4170 Sales returns 4190 Sales discounts and allowances 4000 Total Operating revenue 5000 Operating costs (Note 9, 22 and 27) 5900 Gross profit from operations Operating expenses (Note 22 and 27) 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9 6000 Total operating expenses 6900 Net operating income Non-operating income and expenses (Note 22 and 27) 7190 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of Profit (loss) of Associates & Joint Ventures Accounted for Using Equity Method 7000 Total non-operating income and expenses	2019	`％` 101 ( 1 ) - 100 (74) 26 ( 2 ) ( 3 ) ( 1 ) - ( 6) 19 1 ( 1 ) ( 1 ) 14 13	2018
	Amount $ 2,437,888 ( 19,433 ) ( 3,602) 2,414,853 (1,791,144) 623,709 ( 32,843 ) ( 78,108 ) ( 28,596 ) 5,001 ( 134,546) 489,163 6,295 ( 28,199 ) ( 20,548 ) 344,278 301,826		Amount $ 2,333,275 ( 7,101 ) ( 4,169) 2,322,005 (1,755,150) 566,855 ( 47,025 ) ( 91,331 ) ( 17,474 ) 169 ( 155,661) 411,194 4,450 29,374 ( 16,078 ) 231,984 249,730		`％`
				100 - - 100 (76) 24 ( 2 ) ( 4 ) ( 1 ) - ( 7) 17 - 1 - 10 11

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（continued）

（continued）
Code 7900 Profit from continuing operations before tax 7950 Income tax expenses (Note 23) 8200 Profit Other comprehensive income 8310 Components of other comprehensive income that will not be reclassified to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans 8360 Components of other comprehensive income that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation 8300 Total other comprehensive income 8500 Total comprehensive income Earnings per share (Note 24) From continuing operations 9710 Basic 9810 Diluted	2019		`％` 33 7) 26 - 7) 7) 19		2018
					Amount $ 660,924 161,215) 499,709 85 34,167) 34,082) $ 465,627 $ 6.10 $ 5.69		`％`
		( ( (		( ( (		( ( (	28 7) 21 - 1) 1) 20

The accompanying notes are an integral part of the parent company only financial statements.

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Global PMX Co., Ltd. Parent Company Only Statement of Changes in Equity For the Years Ended December 31, 2019 and 2018

Share Capital Shares (In Thousands) Amount 81,934 819,340 - - - - - - - - - - - - - - 81,934 819,340 - - - - - - - - - - - - 81,934 $ 819,340		Retained Earnings	In Thousands of New Taiwan Dollars Other Equity Interest Exchange Differences on Translation of Foreign Financial Statements Total Equity ( 84,243 ) 2,907,481 - 43,662 - - - - - ( 520,281 ) 499,709 ( 34,167) ( 34,082) ( 34,167) 465,627 ( 118,410 ) 2,896,489 - - - - - ( 253,995 ) - 622,427 ( 152,958) ( 153,603) ( 152,958) 468,824 ($ 271,368) $ 3,111,318
			Exchange Differences on Translation of Foreign Financial Statements ( 84,243 ) - - - - ( 34,167) ( 34,167) ( 118,410 ) - - - - ( 152,958) ( 152,958) ($ 271,368)
Shares (In Thousands) 81,934 - - - - - - - 81,934 - - - - - - 81,934	Legal Reserve 157,712 - 59,967 - - - - - 217,679 49,971 - - - - - $ 267,650	Special Reserve 64,310 - - 19,933 - - - - 84,243 - 34,167 - - - - $ 118,410

The accompanying notes are an integral part of the parent company only financial statements.

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Global PMX Co., Ltd.

Parent Company Only Statements of Cash Flows For the Year Ended December 31, 2019 and 2018

Code Cash flows from (used in) operating activities A10000 Profit (loss) before tax A20010 Adjustments to reconcile profit (loss) A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit loss (gain) A20400 Net loss (gain) on financial assets or liabilities at fair value through profit or loss A20900 Finance cost A21200 Interest income A22400 Share of loss (profit) of Associates & Joint Ventures Accounted for Using Equity Method A30000 Changes in operating assets and liabilities, net A31150 Decrease (increase) in accounts receivable A31180 Decrease (increase) in other receivable A31200 Decrease (increase) in inventories A31230 Decrease (increase) in prepayment A31240 Decrease (increase) in other current assets A32150 Increase (decrease) in accounts payable A32180 Increase (decrease) in other payable A32230 Increase (decrease) in other current liabilities A32240 Increase (decrease) in net defined benefit liability A33000 Cash inflow (outflow) generated from operations A33300 Interest paid A33500 Income tax paid AAAA Net cash flows from (used in) operating activities Cash flows from (used in) investing activities B01800 Acquisitions of investments accounted for using equity method B04500 Acquisition of intangible assets B07500 Interest received BBBB Net cash flows from (used in) investing activities	In Thousands of New Taiwan Dollars Year 2019 Year 2018 $ 790,989 $ 660,924 233 463 38 227 ( 5,001 ) ( 169 ) ( 450 ) 1,657 20,548 16,078 ( 6,295 ) ( 4,163 ) ( 344,278 ) ( 231,984 ) 458,575 ( 291,723 ) ( 11,306 ) ( 370 ) ( 30,087 ) ( 15,288 ) 44,721 96,174 ( 24,491 ) ( 1,545 ) 66,757 78,395 ( 8,097 ) 12,914 ( 1,210 ) ( 54 ) 5 ( 20) 950,651 321,516 ( 7,548 ) ( 4,139) ( 90,290) ( 66,974) 852,813 250,403 ( 308,250 ) ( 1,158,904 ) ( 160 ) - 5,645 4,163 (302,765) (1,154,741 )	In Thousands of New Taiwan Dollars Year 2019 Year 2018 $ 790,989 $ 660,924 233 463 38 227 ( 5,001 ) ( 169 ) ( 450 ) 1,657 20,548 16,078 ( 6,295 ) ( 4,163 ) ( 344,278 ) ( 231,984 ) 458,575 ( 291,723 ) ( 11,306 ) ( 370 ) ( 30,087 ) ( 15,288 ) 44,721 96,174 ( 24,491 ) ( 1,545 ) 66,757 78,395 ( 8,097 ) 12,914 ( 1,210 ) ( 54 ) 5 ( 20) 950,651 321,516 ( 7,548 ) ( 4,139) ( 90,290) ( 66,974) 852,813 250,403 ( 308,250 ) ( 1,158,904 ) ( 160 ) - 5,645 4,163 (302,765) (1,154,741 )
		$ 660,924 463 227 ( 169 ) 1,657 16,078 ( 4,163 ) ( 231,984 ) ( 291,723 ) ( 370 ) ( 15,288 ) 96,174 ( 1,545 ) 78,395 12,914 ( 54 ) ( 20) 321,516 ( 4,139) ( 66,974) 250,403 ( 1,158,904 ) - 4,163 (1,154,741 )

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`（` continued `）`

Code Cash flows from (used in) financing activities C00100 Increase in short-term loans C01200 Proceeds from Issuing bonds C04500 Cash dividends paid CCCC Net cash flows from (used in) financing activities EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at beginning of period E00200 Cash and cash equivalents at end of period	Year of 2019 $ - - (253,995) (253,995) 296,053 832,480 $ 1,128,533	Year of 2018	Year of 2018
		(	$ 578,000 1,502,500 520,281) 1,560,219 655,881 176,599 $ 832,480

The accompanying notes are an integral part of the parent company only financial statements.

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Global PMX Co., Ltd. Notes to Parent Company Only Financial Statements For The Years Ended December 31, 2019 and 2018

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. General Information

Global PMX Co., Ltd. (the “Company”) was incorporated in February 1987, formerly known as「Global PMX Co., Ltd.」, it was renamed to "Global PMX Co., Ltd." in October, 1999. The company engages mainly in manufacturing of electronic equipment, plastic components, hardware hand tools, metal parts etc. trading, import and export, industrial plastic products manufacturing, other non-metal products manufacturing, iron and steel casting, iron and steel forging, steel rework, aluminum rework, etc.

The common shares of the Company have been listed on the Taiwan Stock Exchange since August 10, 2015.

The parent company only financial statements are presented in NTD, which is the Company’s functional currency.

2. The Date of Authorization for Issuance of the Consolidated Financial Statements and Procedures for Authorization.

The parent company only financial statements were approved and authorized by the Board of Directors on March 23, 2020.

3. Application of New Standards, Amendments and Interpretations

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

IFRS 16 “Leases”

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and

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lessor. It supersedes IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Company as lessee

The Company recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the parent company only statements of comprehensive income, the Company presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the parent company only statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities. Prior to the application of IFRS 16, payments under operating lease contracts, including property interest qualified as investment properties, were recognized as expenses on a straight-line basis. Prepaid lease payments for land use rights in China were recognized as prepayments for leases. The difference between the actual payments and the expenses, as adjusted for lease incentives, was recognized as prepayments for leases. Cash flows for operating leases were classified within operating activities on the parent company only statements of cash flows. Leased assets and finance lease payables were recognized on the parent company only balance sheets for contracts classified as finance leases.

The Company elects to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized in retained earnings on January 1, 2019. Comparative information is not restated.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of

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any prepaid or accrued lease payments, the Company applies IAS 36 to all right-of-use assets.

The Company also applies the following practical expedients:

a) The Company applies a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.

b) The Company accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.

c) The Company uses hindsight, such as in determining lease terms, to measure lease liabilities.

The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease commitments on December 31, 2018 Less: Recognition exemption for short-term leases Undiscounted amounts on January 1, 2019 Discounted amounts using the incremental borrowing rate on January 1, 2019 Lease liabilities recognized on January 1, 2019	$ 120 ( 120) $ $ - $ -

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is not have significant influence.

(2) The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2020

New IFRSs Amendments to IFRS 3 “Definition of a Business” Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform” Amendments to IAS 1 and IAS 8 “Definition of Material”	Effective Date Announced byIASB
	January 1, 2020 (Note 1) January 1, 2020 (Note 2) January 1, 2020 (Note 3)

Note 1: The Company shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual

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reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.

Note 2: The Company shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.
Note 3: The Company shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

1) Amendments to IFRS 3 “Definition of a Business”

2) Amendments to IAS 1 and IAS 8 “Definition of material”

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

(3) New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs

Effective Date Announced by IASB (Note 1)

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Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2021 Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2022 or Non-current”

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

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32: Financial Instruments: Presentation, the aforementioned terms would not affect the classification of the liability.

4 . Summary of Significant Accounting Policies

(1) Statement of Compliance

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The accompanying parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of Preparation

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 inputs are quoted prices (unadjusted) of identical assets or liabilities that the entity can access in active markets at the measurement date.
Level 2 inputs are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 inputs are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When preparing the parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owners of the Company in its financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, share of profits of subsidiaries for using the equity method in the parent company only financial statements.

(3) Classification of Current and Non-Current Assets and Liabilities

Current assets include

Assets held primarily for the purpose of trading.
Assets expected to be realized within 12 months after the reporting period; and

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

Current liabilities include ：

Liabilities held primarily for the purpose of trading.
Liabilities due to be settled within 12 months after the reporting period; and
Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as noncurrent.

(4) Foreign Currencies

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

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined.

Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

For the purposes of presenting financial statements, the assets and liabilities of the Company’s foreign operations (including the subsidiaries or associates, joint ventures or branches of the country in which the country of operation or currency is used) are translated into New Taiwan Dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income.

276

(5) Inventories

(6) Investment in Subsidiaries

Investments accounted for using the equity method include investments in subsidiaries.

Subsidiaries are the entities controlled by the Company.

Under the equity method, the investment is initially recognized at cost and the carrying amount is increased or decreased to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary after the date of acquisition. Besides, the Company also recognizes the Company’s share of the change in other equity of the subsidiary.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the Company’s share of losses of a subsidiary equals or exceeds its interest in that subsidiary (which includes any carrying amount of the investment in subsidiary accounted for by the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further losses.

The acquisition cost in excess of the acquisition-date fair value of the identifiable net assets acquired is recognized as goodwill. Goodwill is not

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amortized. The acquisition-date fair value of the net identifiable assets acquired in excess of the acquisition cost is recognized immediately in profit or loss.

When the Company evaluates the impairment, it considers the cash-generating unit as a whole in the financial report and compares its receivable carrying amount. If the receivable amount of the asset increases, the amount of the impairment loss is recognized as gain on reversal of impairment loss. However, the carrying amount of the asset after the impairment loss shall not exceed the amount of the asset that is not recognized as impairment loss. The carrying amount after amortization. The impairment loss attributable to goodwill shall not be reversed during the subsequent period.

When the Company ceases to have control over a subsidiary, any retained investment is measured at fai value at that date and the difference between the previous carrying amount of the subsidiary attributable to the retained interest and its fair value is included in the determination of the gain or loss. Furthermore, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.

Profits and losses from downstream transactions with a subsidiary are eliminated in full. Profits and losses from upstream with a subsidiary and side stream transactions between subsidiaries are recognized in the Company’s financial statements only to the extent of interests in the subsidiary that are not related to the Company.

(7) Property, Plant and Equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment.

(8) Intangible Assets
Acquired Separately

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Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life.

2. Derecognition

When the intangible assets are derecognized, the net disposal price and the carrying amount of the asset is recognized in the current profit and loss.

(9) Impairment of Tangible and Intangible Assets

The Company reviews the carrying amounts of its tangible and intangible assets (excluding goodwill), to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the Company uses the estimated cash flows discounted by the future pre-tax discount rate, and the discount rate reflects current the market time value of money and the specific risks to the asset for estimated future cash flows not yet adjusting to the market.

(10) Financial Instruments

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

Financial Assets

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

(1) Measurement Category

The Company’s financial assets consist of the following categories: financial assets at fair value through profit or loss, financial assets at amortized cost.

B. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss (FVTPL) are stated at fair value, with any gains or

losses arising on remeasurement recognized in profit or loss, including the Company's investment in equity instruments that are not measured by the Company's other comprehensive gains and losses, which are measured at fair value through profit or loss and non-conforming investment in debt instruments that are measured at amortized cost or measured at fair value through other comprehensive income. Fair value is determined in the manner described in Note 26.

B. Financial assets at amortized cost

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

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

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

Except the following two approaches, interest income was calculated by effective interest rate multiplying the total carrying value of the asset:

(a) Purchased or originated credit-impaired financial assets, for which interest income is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of financial assets.
(b) Non-purchased or originated credit impairment, but financial assets have subsequently become credit-impaired, for which interest income is calculated by multiplying the effective interest rate by the amortized cost of such financial assets starting from the following reporting period.

(2) Impairment of Financial Assets

The Company's impairment loss on financial assets (including accounts receivable) measured at amortized cost based on expected credit loss at the end of each reporting period.

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12-month expected credit loss. If it has increased significantly, it is recognized as the expected credit loss during the duration.

For internal credit risk management purposes, the Company determines that the following situations indicate that a financial asset is in default :

iii) Internal or external information show that the debtor is unlikely to pay its creditors.
iv) When a financial asset is more than 181 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is reduced by the allowance account, but the allowance for the investment in the debt instrument measured at fair value through other comprehensive gains and losses is recognized in other comprehensive gains and losses and does not reduce its carrying amount.

(3) Derecognition of Financial Assets

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

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been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Equity Instruments

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

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

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

Financial Liabilities
(1) Subsequent measurement

The financial liabilities are measured at amortized cost using the effective interest method.

(2) Derecognition of financial liabilities

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

Convertible Bonds

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

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instrument’s maturity date. Any embedded derivative liability is measured at fair value.

(11) Revenue Recognition

The Company recognizes revenue when performance obligations are satisfied. The transaction price is apportioned to each performance obligation and the income is recognized when each performance obligation is met.

Revenue from sale of goods

Revenue from the sale of goods comes from automotive parts, computer, communication, and consumer electronics and medical equipments. The company recognizes revenue when the products are delivered and ownership control is transferred.

During materials processing, the control of the ownership of the processed product is not transferred, the revenue is not recognized during materials processing.

(12) Leases

2019

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Company as lessee

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The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basi over the lease terms.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

2018

The Company as lessor

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

The Company as lessee

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

(13) Borrowing Cost

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

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

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(14) Employee Benefit

Short-term employee benefit

Liabilities recognized in respect of short-term employee benefit are measured at the undiscounted amount of the benefits expected to be paid in exchange for service rendered by employees.

Retirement benefits

Payments to the benefit plan are recognized as an expense when the employees have rendered service entitling them to the contribution.

Net defined benefit liabilities (assets) represents the actual deficit (surplus) in the Company’s defined benefit plan. Net defined benefit asset shall not exceed the present value of the allocation from the plan or the reduction of future allocation.

(15) Taxation

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

1. Current tax

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

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2. Deferred tax

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

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

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

Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in

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equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

5 . Critical Accounting Judgments and Key Sources of Estimation and Uncertainty

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

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

6 . Cash and Cash Equivalents

Cash and deposits in banks Bank notes and demand deposits Cash equivalents (investments with original maturities of less than 3 months)		December 31, 2019 $ 41 777,726 350,766 $ 1,128,533		December 31, 2018
				$ 41 832,439 - $ 832,480

7 . Financial Assets at Fair Value through Profit or Loss

Financial assets－noncurrent Mandatorily at FVTPL Derivative instruments (non-designated hedges) - Redeemable convertible bond (Note 16)	December 31, 2019 $ 1,050	December 31, 2018	December 31, 2018
			$ 600

The Company has issued embedded derivatives that are not closely related to the host contract of convertible bonds (issuer redemption), the fair value assessed using option pricing model is provided in Note 16.

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8 . Accounts Receivable and Other Receivables

Accounts receivable-non related parties At amortized cost Gross carrying amount Less：Allowance for doubtful accounts Accounts receivable-related parties At amortized cost Gross carrying amount Other receivables Other receivables-related parties	December 31, 2019 $ 675,636 ( 8,280) $ 667,356 $ 224,233 $ 14,021 $ 137	December 31, 2018	December 31, 2018
			$ 604,346 (13,281) $ 591,065 $ 754,098 $ 2,176 $ 26

The average credit period of sales of goods was 60 to 120 days. During this period no interest charge for the accounts receivable. The company will use other available publicly financial information and historical transaction record to rank the credit of the counterparties, and may ask for sufficient collaterals to reduce the financial risk caused by the delay of the payments. The company continue to monitor credit risk and the Credit Rank of the counterparties. And assess and approve the credit limit applied to counterparties every year to management of the credit risk.

To reduce the credit risk, the Company’s management assigned a special team in charge of assess and approval of credit facilities and other monitor procedures to reassurance and take action to recover overdue receivables. On the date of balance sheet, the Company will examine the amount of recovery accounts receivable accordingly, to ensure the allowance for losses in case deemed non-recoverable.

The company adopted simplified approach of IFRS 9, to consider when determining its expectations of impairment. Under this model, expectations of future events must be taken into account and this will result in the earlier recognition of impairments. The Company assesses whether there has been a significant increase in credit risk since initial recognition by reviewing changes in external credit ratings, financial market conditions and market future outlook. According to the Company’s historical experience of credit loss, there is no significant difference in the loss patterns of customers’ segments. Therefore, the provision matrix didn’t further segment the customer base, only sets the expected credit loss rate based on the overdue days of accounts receivable.

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The Company use provision matrix to calculate the allowance for losses from accounts receivable as follows:

December 31, 2019

Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost		Not Past Due $784,926 ( 685 ) $ 784,241		1～60 days $ 96,320 3,294 ) $93,026	61～120 days $ 16,859 ( 3,072 ) $13,787	121～180 days $ 1,194 ( 659) $ 535	Over 181 days $ 570 ( 570) $ -	Total
			(		(	(	(	$ 899,869 ( 8,280) $891,589

December 31, 2018

Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost		Not Past Due $1,248,970 ( 1,009 ) $1,247,961		1～60 days $ 83,878 1,656 ) $ 82,222	61～120 days $ 13,942 ( 1,717) $ 12,225	121～180 days $ 6,552 ( 3,797) $ 2,755	Over 181 days $ 5,102 ( 5,102) $ -	Total
			(		(	(	(	$1,358,444 ( 13,281) $1,345,163

The loss allowance for accounts receivable is calculated by the rate of expected credit loss at each aging range, and the rate of expected credit loss was 0.12% to 100%

Movements of the loss allowance for accounts receivable were as follows:

January 1 to December 31, 2019 $ 13,281 (5,001) $ 8,280	January 1 to December 31, 2019 $ 13,281 (5,001) $ 8,280	January 1 to December 31, 2018	January 1 to December 31, 2018

	$ 13,281		$ 13,450
(		(	169) $ 13,281

9 . Inventories

December	31,	December	31,
2019		2018

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Finished goods Inventory in transit	$ 89,039 - $ 89,039	$ 58,210 742 $ 58,952

The cost of revenue related to inventory were NT$1,791,144 thousand and NT$1,755,150 thousand respectively.

10 . Investments Accounted for Using Equity Method

Investment in subsidiaries	December 31, 2019 $ 4,177,851	December 31, 2018	December 31, 2018
			$ 3,716,521

Investments in subsidiaries

Investments in subsidiaries
Non listed company FORTUNE TOWER HOLDING CO., LTD. SEAMAX INTERNATIONAL LTD. ACE PLUS TECHNOLOGY LIMITED	December 31, 2019 $ 4,145,933 30,562 1,356 $ 4,177,851	December 31, 2018
			$ 3,683,837 31,252 1,432 $ 3,716,521

The proportion of ownership and voting rights in subsidiaries held by the Company were as follows:

	December 31,	December 31,
Subsidiaries	2019	2018
FORTUNE TOWER
HOLDING CO., LTD.	100%	100%
SEAMAX INTERNATIONAL
LTD.	100%	100%
ACE PLUS TECHNOLOGY
LIMITED	100%	100%

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The profit and loss of the subsidiaries for using the equity method and other comprehensive income in 2019 and 2018 are recognized based on the Independent Auditor’s Report in the same period.

11 . Property, Plant and Equipment

Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment	Property, Plant and Equipment
L a n d Buildings Machinery a n d Equipment O f f i c e Equipment T o t a l
Cost Balance at January 1, 2018 Balance at December 31, 2018 Accumulated depreciation and impairment Balance at January 1, 2018 Depreciation Balance at December 31, 2018 Net at December 31, 2018 Cost Balance at January 1, 2019 Disposals Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation Disposals Balance at December 31, 2019 Net at December 31, 2019	$ 16,801 $ 16,801 $ - - $ - $ 16,801 $ 16,801 - $ 16,801 $ - - - $ - $ 16,801	$ 11,250 $ 11,250 $ 3,764 195 $ 3,959 $ 7,291 $ 11,250 - $ 11,250 $ 3,959 195 - $ 4,154 $ 7,096	$ 9,591 $ 9,591 $ 9,285 268 $ 9,553 $ 38 $ 9,591 - ( $ 9,591 $ 9,553 38 - ( $ 9,591 $ -	$ 3,648 $ 3,648 $ 3,648 - $ 3,648 $ - $ 3,648 30) ( $ 3,618 $ 3,648 - 30) ( $ 3,618 $ -	$ 41,290 $ 41,290 $ 16,697 463 $ 17,160 $ 24,130 $ 41,290 30) $ 41,260 $ 17,160 233 30)
					$ 17,363 $ 23,897

The Company did not conduct any impairment assessment in 2019 and 2018 as there was no signs of impairment.

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Property, plant and equipment were depreciated on a straight-line basis over the estimated useful life of the asset:

Buildings
Main buildings	55 Years
Building improvement	3 Years
Machinery and equipment	4 to 6 Years
Office equipment	3 to 5 Years

12 . LEASE ARRANGEMENTS

2019

Expenses relating to short-term leases Total cash outflow for leases	January 1 to December 31, 2019	January 1 to December 31, 2019
		$ 297 $ 297

The Company leases certain building and other equipment which qualify as short-term leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments are as follows:

Not later than 1 year Later than 1 year and not later than 5 years Later than 5 years	December 31, 2018	December 31, 2018
		$ 120 - - $ 120

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13 . Computer Software, Net

Computer Software, Net
		2019		2018
Cost
Balance at January 1	$	455	$	455
Acquired separately		160		-
Disposals	(	455 )		-
Balance at December 31	$	160	$	455
Accumulated amortizarion
and impairment
Balance at January 1	( $	417 )	( $	190 )
Amortization expenses	(	38 )	(	227 )
Disposals		455		-
Balance at December 31	$	-	($	417)
Carrying amount at January 1	$	38	$	265
Carrying amount at December 31	$	160	$	38

Amortization expenses were accrued on a straight-line basis over two years.

14 . Other Assets

Current Prepayments to suppliers Other prepayments Other financial assets Other current assets Borrowings Current borrowings Unsecured borrowings Credit loans	December 31, 2019 $ - 8,476 23 28,167 $ 36,666 December 31, 2019 $ 808,000	December 31, 2018	December 31, 2018
		$ 43,353 9,844 23 3,676 $ 56,896 December 31, 2018

			$ 808,000

15 . Borrowings

The interest rate of credit loans was 0.85% to 1% and 0.915% to 1.14% for the years ended December 31, 2019 and 2018 respectively.

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16. Bonds Payable

Bonds Payable
Domestic unsecured bonds Less: Discount on bonds payable Subtotal amount Less: Current portion	December 31, 2019 December 31, 2018 $ 1,500,000 $ 1,500,000 ( 14,369) ( 27,321) 1,485,631 1,472,679 - - $ 1,485,631 $ 1,472,679
	(	$ 1,500,000 27,321) 1,472,679 - $ 1,472,679

Domestic unsecured convertible bonds

The company issued 15 thousand shares of unsecured convertible bonds denominated in New Taiwan Dollars, with an aggregate principle amount of NT$1,500,000 thousand and a coupon interest rate of zero percent on February 5, 2018.

(1) Each unit of convertible bond holder has right to convert held bonds to common shares of issuing company at NT$179 per share during the conversion period starting from May 6, 2018 to February 5, 2021. (The initial conversion price of NT$ 193 was reset and amounted to NT$ 179 per share at ex-dividend date on August 3, 2019,NT$ 183.5 per share at ex-dividend date on August 15, 2018)
(2) Starting from May 6, 2018 to December 27, 2020, if the closing prices of the Company’s common stocks had surpassed the conversion price in 30 consecutive business days in a row to the extent of 30% (on) or above the foresaid price, or the balance of outstanding convertible bonds had been 10% lower than original issued amount, the Company may repurchase outstanding bonds in cash at their par value.

The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus-share options. The effective interest rate of the liability component was 0.073% on initial recognition.

‘

Proceeds from issuing bonds (less transaction cost NT$5,000 thousand) Equity component (less transaction cost allocated to equity NT$346 thousand) ( Convertible bonds redemption	$ 1,502,500 43,662 ) 2,257

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Liability component measured at issuance date (less: transaction costs allocated to liability NT$4,647 thousand) Effective interest rate 0.073% Liability component at December 31, 2018 Effective interest rate 0.073% Liability component at December 31, 2019	1,461,095 11,584 $ 1,472,679 12,952 $ 1,485,631

Convertible bond redemption is a financial asset measured at fair value through profit or loss. The estimated gain (loss) amount from changes in fair value from February 5 to December 31, 2018 and January 1 to December 31,2019 was NT$450 thousand and (NT$1,657) thousand respectively , The fair value of the financial assets was NT$1,050 thousand NT$600 thousand as of December 31, 2019 and 2018. Please refer to Note 7.

17. Accounts Payable

Accounts Payable
Operating Accounts payable Accounts payable－related parties	December 31, 2019 $ 23,901 $ 550,261	December 31, 2018
			$ 33,080 $ 474,325

The company has financial risk management policies in place to ensure that all payables were repaid within the pre-agreed credit terms.

18. Other Liabilities

Other Liabilities
Current Other payables Salaries and bonuses Insurance premiums Labor cost Employee compensation Board of directors and supervisors compensation Tax and dues Others Other payables－related	December 31, 2019 $ 23,421 1,477 1,050 24,096 19,514 1,022 11,280 $ 81,860 $ 348	December 31, 2018
			$ 22,926 1,424 1,380 23,298 18,647 1,499 8,645 $ 77,819 $ 12,438

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party

Other liabilities Temporary credits Receipts under custody	$ 3,163 313 $ 3,476	$ 4,366 320 $ 4,686

19. Retirement Benefit Plans

(1) Defined contribution plans

The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary and wages to employees’ pension accounts.

(2) Defined benefit plans

The Company has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 4% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds is managed by the Bureau of Labor Funds (“the Bureau”) under Taiwan’s Ministry of Labor; the Company has no right to influence the Bureau’s investment policy and strategy.

Amounts included in the parent company only balance sheets in respect of the defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Appropriation shortage Net defined benefit liability	December 31, 2019 $ 10,882 ( 5,457) 5,425 $ 5,425	December 31, 2018	December 31, 2018
	(	(	$ 9,944 5,169) 4,775 $ 4,775

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Movements in net defined benefit liability were as follows:

Balance at January 1, 2018 Interest expense（income） Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss (gain) `－`Changes in demographic assumptions `－`Changes in financial assumptions `－`Experience adjustments Recognized in other comprehensive income Contributions from the employer Balance at December 31, 2018 Interest expense（income） Recognized in profit or loss Remeasurement Return on plan assets (excluding amounts included in net interest) Actuarial loss (gain) `－`Changes in demographic assumptions `－`Changes in financial assumptions `－`Experience adjustments	Present Value of Defined Benefit O b l i ga t i o n $ 9,721 133 133 - 54 157 ( 121) 90 - 9,944 124 124 - 2 636 176	Fair Value of P l a n A s s e t s ($ 4,841) ( 68) ( 68) ( 175 ) - - - ( 175) ( 85 ) ( 5,169) ( 65) ( 65) ( 169 ) - - -	N e t D e f i n e d Benefit Liability ( A s s e t s )
	(		$ 4,880 65 65 ( 175 ) 54 157 ( 121) ( 85) ( 85 ) 4,775 59 59 ( 169 ) 2 636 176

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Recognized in other Comprehensive income Contributions from the employer Balance at December 31, 2019	814 ( - ( $ 10,882 (	169) 54) ( $ 5,457)	645 54) $ 5,425

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company was exposed to the following risks:

Investment risk: The pension funds are invested in domestic (foreign) equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the returns generated by plan assets should not be less than the interest rate for a 2-year time deposit published by the local banks.
Interest risk: A decrease in the government/corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.
Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

Discount rate Future salary increase rate	December 31, 2019 0.750% 2.250%	December 31, 2018
		1.250% 2.250%

December	31,	December	31,
2019		2018

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Discount rate Increase 0.25% ( Decrease 0.25% Future salary increase rate Increase 0.25% Decrease 0.25% (	$ 324) ( $ 337 $ 326 $ 315) (	$ 311) $ 324 $ 315 $ 304)

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

Estimated amount to be paid within 1 year Determine the average maturity of defined benefit obligation	December 31, 2019 $ 60 12.0 Years	December 31, 2018
		$ 87 12.7 Years

20. Equity

(1) Share capital

Common stocks

Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31, 2019 150,000 $ 1,500,000 81,934 $ 819,340	December 31, 2018	December 31, 2018
			150,000 $ 1,500,000 81,934 $ 819,340

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

(2) Capital surplus

December	31,	December	31,
2019		2018

May be used to offset a deficit, distributed as cash dividends,

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or transferred to share capital (1) Share premium May not be used for any purpose Stock right (2) (Note 15)	$ 1,064,002 43,662 $ 1,107,664	$ 1,064,002 43,662 $ 1,107,664

(1) The capital surplus from shares issued in excess of par may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to capital, but limited to a certain percentage of the Company’s paid-in capital each year.
(2) Such capital surplus generated from recognition of convertible bonds will be adjusted upon conversion or expiration of underlying assets.
(3) Retained earnings and dividend policy

Under the earning distribution policy of the Company’s Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan with due consideration of any future operating plans and fund demand, which shall be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholders by cash or shares, cash dividends shall be distributed not less than 50% of profit, which was offseted losses and deducted legal reserve and special reserve. However, if the Company’s shareholder dividend is less than NT$0.5 per share, retained earnings will not be distributed. The Company can distribute the dividends by cash or shares, cash dividend is not less than 50% of the total dividend. The distribution of profit surplus shall be approved in the annual shareholders’ meeting. For the employee and directors' compensation distribution policy as stipulated in the Company's Articles, please refer to Note 22 (7) Employees' Compensation and Directors' Compensation.

The legal reserve shall be allocated until the balance reaches the total paid-in capital of the company. The legal reserve can be used for make up losses. When the company has no losses, the portion of the legal reserve exceeds 25% of the total paid-in capital may be transferred to capital or distributed as cash dividends.

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Pursuant to Letter Number 1010012865 and Letter Number 1010047490 issued by the Financial Supervisory Commission and “Adoption of International Financial Reporting Standards (IFRSs), Questions and Answers to an application for permission to capitalize its legal reserve or capital reserve” set aside and reversal special reserve in accordance with the provisions. After other shareholders' equity deductions have been reversed, the surplus shall be distributed in the reversal part.

The appropriation of retained earnings of 2018 and 2017 had been approved by the Company’s shareholders in its meetings held on June 14, 2019 and June 29, 2018, respectively. The appropriations and dividends per share were as follows:

Legal reserve Special reserve Cash dividends Dividends Per Share(NT$)	For Fiscal Year 2018 $ 49,971 $ 34,167 $ 253,995 $ 3.10	For Fiscal Year 2017	For Fiscal Year 2017
			$ 59,967 $ 19,933 $ 520,281 $ 6.35

The appropriation of retained earnings for 2019 had been proposed by the board of director on March 23, 2020 is as follows:

Legal reserve Special reserve Cash dividends Dividends Per Share(NT$)	For Fiscal Year 2019	For Fiscal Year 2019
		$ 62,243 $ 152,958 $ 204,835 $ 2.5

The appropriations of earnings for the 2019 are to be presented for approval in the shareholders’ meeting to be held in June, 2020.

(4) Special reserve

Special reserve
Balance at January 1 Special reserve Deduction amount to other equity Balance at December 31		2019 $ 84,243 34,167 $ 118,410		2018
				$ 64,310 19,933 $ 84,243

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(5) Other equity items

Exchange differences on translating the financial statements of foreign operations 2019 2018 Balance at January 1 ( $ 118,410) ( $ 84,243 ) Change in tax rate - 3,043 Recognized for the year Exchange differences on translating the financial statements of foreign operations ( 191,198 ) ( 46,513 ) Income tax effect 38,240 9,303 Other comprehensive income for the year (152,958) (34,167) Balance at December 31 ($271,368) ($ 118,410) Net Revenue 2019 2018 Revenue generated from contracts with customers - Revenue generated from sales of goods $ 2,414,853 $ 2,322,005 Net Profit for the Year Other income 2019 2018 Interest income Bank deposits $ 6,295 $ 4,163 Rental income - 200 Other - 87 $ 6,295 $ 4,450 Other gains and losses 2019 2018 Gains (losses) on foreign exchange, net ( $ 28,649 ) $ 31,031 Gains (losses) on financial assets at FVTPL, net 450 ( 1,657) ($ 28,199) $ 29,374	Exchange differences on translating the financial statements of foreign operations 2019 2018 Balance at January 1 ( $ 118,410) ( $ 84,243 ) Change in tax rate - 3,043 Recognized for the year Exchange differences on translating the financial statements of foreign operations ( 191,198 ) ( 46,513 ) Income tax effect 38,240 9,303 Other comprehensive income for the year (152,958) (34,167) Balance at December 31 ($271,368) ($ 118,410) Net Revenue 2019 2018 Revenue generated from contracts with customers - Revenue generated from sales of goods $ 2,414,853 $ 2,322,005 Net Profit for the Year Other income 2019 2018 Interest income Bank deposits $ 6,295 $ 4,163 Rental income - 200 Other - 87 $ 6,295 $ 4,450 Other gains and losses 2019 2018 Gains (losses) on foreign exchange, net ( $ 28,649 ) $ 31,031 Gains (losses) on financial assets at FVTPL, net 450 ( 1,657) ($ 28,199) $ 29,374	Exchange differences on translating the financial statements of foreign operations 2019 2018 Balance at January 1 ( $ 118,410) ( $ 84,243 ) Change in tax rate - 3,043 Recognized for the year Exchange differences on translating the financial statements of foreign operations ( 191,198 ) ( 46,513 ) Income tax effect 38,240 9,303 Other comprehensive income for the year (152,958) (34,167) Balance at December 31 ($271,368) ($ 118,410) Net Revenue 2019 2018 Revenue generated from contracts with customers - Revenue generated from sales of goods $ 2,414,853 $ 2,322,005 Net Profit for the Year Other income 2019 2018 Interest income Bank deposits $ 6,295 $ 4,163 Rental income - 200 Other - 87 $ 6,295 $ 4,450 Other gains and losses 2019 2018 Gains (losses) on foreign exchange, net ( $ 28,649 ) $ 31,031 Gains (losses) on financial assets at FVTPL, net 450 ( 1,657) ($ 28,199) $ 29,374	Exchange differences on translating the financial statements of foreign operations 2019 2018 Balance at January 1 ( $ 118,410) ( $ 84,243 ) Change in tax rate - 3,043 Recognized for the year Exchange differences on translating the financial statements of foreign operations ( 191,198 ) ( 46,513 ) Income tax effect 38,240 9,303 Other comprehensive income for the year (152,958) (34,167) Balance at December 31 ($271,368) ($ 118,410) Net Revenue 2019 2018 Revenue generated from contracts with customers - Revenue generated from sales of goods $ 2,414,853 $ 2,322,005 Net Profit for the Year Other income 2019 2018 Interest income Bank deposits $ 6,295 $ 4,163 Rental income - 200 Other - 87 $ 6,295 $ 4,450 Other gains and losses 2019 2018 Gains (losses) on foreign exchange, net ( $ 28,649 ) $ 31,031 Gains (losses) on financial assets at FVTPL, net 450 ( 1,657) ($ 28,199) $ 29,374
Balance at January 1 Change in tax rate Recognized for the year Exchange differences on translating the financial statements of foreign operations Income tax effect Other comprehensive income for the year Balance at December 31 Net Revenue Revenue generated from contracts with customers - Revenue generated from sales of goods Net Profit for the Year Other income Interest income Bank deposits Rental income Other Other gains and losses Gains (losses) on foreign exchange, net Gains (losses) on financial assets at FVTPL, net


		$ 2,322,005 2018

			$ 4,163 200 87 $ 4,450 2018
	( (	(	$ 31,031 1,657) $ 29,374

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(3) Financial cost

2019 Interest expense on bank borrowings $ 7,596 Interest expense on convertible bonds 12,952 $ 20,548 Depreciation and amortization 2019 Property, plant and equipment $ 233 Intangible assets 38 Total $ 271 Depreciation categorized by function Operating expense $ 233 Amortization categorized by function Administrative expenses $ 38 Research and development expenditure recognized as expenses 2019 Research and development expenses $ 28,596 Employee benefit expenses 2019 Short-term employee benefits $ 98,716 Post-employment benefits Defined contribution plans 2,489 Defined benefit plans `（`Note 19`）` 59 Other employee benefits 4,768 Total employee benefit expenses $ 106,032			2018
			$ 4,494 11,584 $ 16,078 2018
			$ 463 227 $ 690 $ 463 $ 227 2018
			$ 17,474 2018
		$ 102,645 2,584 65 4,346 $ 109,640

(4) Depreciation and amortization
(5) Research and development expenditure recognized as expenses
(6) Employee benefit expenses

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Categorized by function Operating expenses

$ 106,032

$ 109,640

(7) Employees’ compensation and directors’ remuneration

In accordance with the provisions of the Company’s Articles of Incorporation, the Company shall allocate its net profit before income tax as employees’ compensation and remuneration of directors at a rate of no less than 2% and no more than 2.24%. The employees’ compensation and remuneration of directors for the years ended December 31, 2019 and 2018 have been approved by the Company’s board of directors on March 23, 2020 and March 25, 2019, respectively:

Estimated ratio

stimated ratio
	2019	2018
Compensation of employees	2.69%	2.69%
Remuneration of directors	1.35%	1.35%

Amount

		2019		2018
		In Cash		In Cash
Compensation of employees	$	21,483	$	18,463
Remuneration of directors		10,781		9,266

If the amount changes after the annual parent company only financial statements issued date, it will be processed according to the accounting estimates and adjusted in the next year.

There was no difference between the actual distributed amount of the employee's remuneration and the director's compensation for 2018 and 2017 and the amount recognized in the parent company only financial statements for the years ended of 2018 and 2017.

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(8) Foreign exchange gains and losses

	2019	2018
Total foreign exchange gains Total foreign exchange losses ( Gains (losses), net (	$ 36,896 65,545) ( $ 28,649)	$ 68,777 37,746) $ 31,031

23. Income Tax

(1) Income tax recognized in profit or loss, the major components of income tax expense (profit) were as follows:

Current income tax expense Current tax expense recognized in the current year Income tax on unappropriated earnings Deferred income tax expense Current tax expense recognized in the current year Changes in tax rates Income tax expense recognized in profit or loss		2019 $ 99,128 8,083 $ 107,211 61,351 - 61,351 $ 168,562		2018
				$ 80,843 - $ 80,843 53,382 26,990 80,372 $ 161,215

A reconciliation of accounting profit and income tax expense was as follows:

Income before tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Income tax on unappropriated earnings Change in tax rate Income tax expense recognized in profit or loss		2019 $ 790,989 $ 158,198 2,281 8,083 - $ 168,562		2018
				$ 660,924 $ 132,185 2,040 - 26,990 $ 161,215

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(2) Income tax recognized in other comprehensive income

2019 Deferred incomes tax Changes tax rate $ - Current tax expense recognized in the current year `－`Translation of foreign operations 38,240 Incomes tax expense recognized in other comprehensive income $ 38,240 Current incomes tax assets and liabilities December 31, 2019 Current incomes tax liabilities Income tax payable $ 66,244			2018
		$ 3,043 9,303 $ 12,346 December 31, 2018 $ 49,323

(3) Current incomes tax assets and liabilities
(4) Deferred incomes tax assets and liabilities

Movement of deferred tax assets and deferred tax liabilities:

2019

Recognized Recognized i n O t h e r - Balance at in Profit or Comprehen Balance at J anuar y 1 L o s s sive Income December 31

Deferred income tax

307

assets

Temporary differences Gains or losses on foreign investment accounted for using equity method Exchange differences resulting from translation of foreign operation Differences arising from unrealized profits or losses Deferred income tax liabilities Temporary differences Gains or losses on foreign investment accounted for using equity method Differences on contribution of defined benefit retirement plan	$ 438 29,590 57 $ 30,085 $ 230,867 2,945 $ 233,812		$ 728 - 7,504 $ 8,232 $ 69,584 1 ) $ 69,583	$ - $ 1,166 38,240 67,830 - 7,561 $ 38,240 $ 76,557 $ - $ 300,451 - 2,944 $ - $ 303,395

2018

Recognized Recognized i n O t h e r - Balance at in Profit or Comprehen Balance at J anuar y 1 L o s s sive Income December 31 Deferred income tax assets Temporary differences Gains or losses on foreign investment accounted for using equity method $ 344 $ 94 $ - $ 438 Exchange differences resulting from translation of 17,244 - 12,346 29,590

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foreign operation

Allowance for doubtful accounts Differences arising from unrealized profits or losses	473 ( 473 ) 5,509 ( 5,452 ) $ 23,570 ($ 5,831 )	- - $ 12,346	- 57 $ 30,085

Deferred income tax liabilities Temporary differences Gains or losses on foreign investment accounted for using equity method Differences on contribution of defined benefit retirement plan	$ 156,771 2,500 $ 159,271	$ 74,096 445 $ 74,541	$ - - $ -	$ 230,867 2,945 $ 233,812

(5) Aprroval of income tax

The company’s income tax has been approved by competent tax collection authorities to the year of 2017

24. Earnings Per Share

Unit ： NT$ Per Share

Basic earnings per share Generated from continuing operations Diluted earnings per share Generated from continuing operations		2019 $ 7.60 $ 6.99		2018
				$ 6.10 $ 5.69

The earnings and weighted average number of common shares outstanding used in the computation of earnings per share were as follows:

Net income for the year ended

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Profit attributable to ordinary shareholders of the parent Effect of potentially dilutive ordinary shares: Interest on convertible bonds after tax Earnings used in the computation of diluted earnings per share		2019 $ 622,427 10,362 $ 632,789		2018
				$ 499,709 9,267 $ 508,976

Unit: In Thousand of Shares

Weighted average number of ordinary shares used in the computation of basic earnings per share Effects of potentially dilutive ordinary shares: - Convertible bonds - Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		2019 81,934 8,380 160 90,474		2018
				81,934 7,368 195 89,497

If the Company offers to settle compensation paid to employees in cash or shares, assumes the entire amount of the compensation will be settled in shares, and potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the shares have a dilutive effect. Such dilutive effect of shares was included in the computation of diluted earnings per share until the number of distributed to employees is resolved in the following year.

25. Capital Risk Management

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

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued share capital,

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capital reserves, retained earnings, other equity). The company is not subject to other external capital requirements

The major management of the Company re-examines the capital structure of the Company on a quarterly basis. The review includes consideration of the cost of various types of capital and related risks. Based on the recommendations of the major management, the Company will balance its overall capital structure by paying dividends, issuing new shares, buying back shares and issuing new debts or repaying old debts.

26. Financial Instruments

(1) Information on fair value － Financial instruments that are not measured at fair value

When the carrying amounts of financial assets and financial liabilities that are not measured at fair value are so near their maturity or the future exit prices are equivalent to their fair values, management of the Company believed that the carrying amounts approximate their fair values.

(2) Information on fair value - Fair value of financial instruments that are measured at fair value on a recurring basis
Fair value hierarchy
- December 31, 2019:

		Level 1	Level 2	Level 3	Total
	Financial assets at FVTPL Convertible bonds redemption rights December 31, 2018:	$ - Level 1	$ Level 2	$ 1,050 Level 3	$ 1,050 Total
	Financial assets at FVTPL Convertible bonds redemption rights	$ -	$	$ 600	$ 600

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

311

Reconciliation of Level 3 fair value measurements of financial instrum ween level 1 and level 2 for the year ended December 31, 2019 and 2018. 2019

Financial assets Balance at January 1 New addition Recognized in profit or loss (accounteding for other profit and loss) Balance at December 31 2018 Financial assets Balance at January 1 New addition Recognized in profit or loss (accounteding for other profit and loss) Balance at December 31	At FVTPL	At FVTPL
	Derivative`－`Convertible Bonds Redemption Rights
	$ 600 - 450 $ 1,050 At FVTPL
	Derivative`－`Convertible Bonds Redemption Rights
		$ - 2,257 ( 1,657) $ 600

Valuation techniques and assumptions used in Level 3 fair value measurement

Derivatives - Convertible bond redemption uses the binary tree pricing to convertible bond valuation model to estimate fair value, using a significant unobservable input value as stock price volatility. As stock price volatility increases, the fair value of these derivatives will increase. The stock price volatility adopted on December 31, 2019 and 2018 was 44.61% and 48.5%.

If the following input values are changed to reflect a reasonably possible alternative hypothesis, when all other inputs remain unchanged, the amount of increase (decrease) in the fair value of the redemption right will be as follows:

Volatility Increase 1%	December 31, 2019 $ 10	December 31, 2018	December 31, 2018
			$ 10

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Decrease 1% $

( $ 10 )

(3) Categories of financial instruments

Financial assets At FVTPL Mandatorily at FVTPL Financial assets at amortized cost (Note 1) Financial liabilities At amortized cost (Note 2)	December 31, 2019 $ 1,050 2,034,662 2,950,001	December 31, 2018
		$ 600 2,180,227 2,878,341

Note 1: The balances of financial assets measured at amortized cost comprised cash and cash equivalents, accounts receivable, other receivables, other financial assets and refundable deposits.

Note 2: The balances of financial liabilities measured at amortized cost comprised current borrwings, accounts payable, other payables, bonds payable.

(4) Financial risk management objectives and policies

The major financial instrument of the Company including account receivables, account payables and loans and bond payables. To reduce the financial risks including market risk (including foreign currency risk, interest rate risk), credit risk and liquidity risks. The company is committed to ensuring that the company has sufficient and cost-effective operating capital in response to its operations. The Company prudently manages foreign currency exchange rate risk, equity instrument price risk, credit risk and liquidity risk related to operating activities to reduce the market's uncertainty and potentially adversely affect the company's finances.

1. Market risk

(1) Foreign currency risk

The company is engaged in foreign currency denominated sales and purchase transactions, thus causing the company exposure to the exchange rate change risk. In respect of the management of exchange rate risk, the Company's dedicated units regularly review the assets and liabilities affected by the exchange rate and use appropriate hedging

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instruments to control the risks arising from foreign exchange fluctuations.

At the Company's balance sheet date, the carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies are as follows.

Assets USD EUR Liabilities USD EUR	December 31, 2019 $ 1,306,267 279,872 491,701 15,541	December 31, 2018
		$ 1,273,060 172,270 426,598 11,606

Sensitivity analysis

The Company was mainly affected by fluctuations in the exchange rate of USD and EUROs, and the sensitivity analysis of the foreign currency appreciation and depreciation 1% of the New Taiwan Dollar as a risk of reporting exchange rate changes to the major internal management, also represents management's assessment of the reasonably possible range of foreign currency exchange rates.

The sensitivity analysis includes the amount of monetary assets and monetary liabilities denominated by the Company in non-functional currency at the balance sheet date, and is affected by fluctuations in the foreign currency exchange rate by 1% at the end of the year. The positive numbers in the following summary table represent the increase in the amount of net profit before tax for the current year when the foreign currency is appreciated against the New Taiwan Dollar.

Losses and gains		Effect on USD
		2019 $ 8,146	2018
			$ 8,465

Effect on EUROs

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Losses and gains		2019 $ 2,643	2018
			$ 1,607

(2) Interest rate risk

Taking loans with floating interest rate had exposed the Company to interest rate risk. The Company adopted a policy of taking loans with floating interest rate as a means to mitigate risk arising from changes in interest rates. Therefore, the managerial personnel assessed that the effects of taking floating interest rate loans is not significant.

Interest rates applied over bank deposits the Company held are relatively stable, therefore, revenue and operating cash flows of the consolidated company are not affected by changes in market rates.

Carrying amounts of financial assets and financial liabilities exposed to interest rate risk are as below:

	December 31,	December 31,
	2019	2018
Cash flow interest
rate risk
`－`Financial assets	$ 1,128,515	$ 832,462
`－`Financial
liabilities	808,000	808,000

The following sensitivity analysis was based on the non-derivatives instruments exposed to interest rate risks at the end of the reporting period.

Sensitivity analysis

The Company uses 0.5% increase or decrease as a reasonable risk assessment to report changes in interest rates to the the managerial personnel. If the other conditions remain unchanged and the interest

315

capitalization factor is not taken into consideration, the interest rate increase 0.5% will increase the net profit before tax of the Company for 2019 and 2018 by NT$1,603 thousand and NT$122 thousand respectively.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s credit risk, primarily comes from accounts receivable. The Company will review the receivable amount one by one to ensure that uncollectible receivable have been provided with appropriate impairment losses. Therefore, no significant credit risk is expected, and details of overdue and impairment losses please refer to Note 8 attached.

3. Liquidity risk

The objective of the Company’s management of liquidity is to maintain cash and cash equivalents sufficient for operating purposes and reduce the impact of cash flow fluctuations. The Company’s management supervises the use of bank loan quotas and ensures compliance with the terms of the loan agreement.

Bank loan is an important source of liquidity for the Company. As of December 31, 2019 and 2018, the unutilized overdraft bank financing quota of the Company was NT$822,561 thousand and NT$1,412,918 thousand respectively.

Liquidity and interest rate risks of non-derivative liabilities

An analysis of remaining contractual maturity of the non-derivative financial liabilities is based on undiscounted cash flows of financial liabilities (including principal and estimated interest), the Company may be required to repay. Therefore, bank loans with repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To extent that interest flows are floating rate, the undiscounted amount was derived from the yield curve at the end of the reporting period.

December 31, 2019

Less Than 1 Year 1-5 Years[Over 5 Years ]

Weighted Average

316

Non- derivative Financial liabilities Bank loans Accounts payable Other payable Bonds payable December 31, 2018 Non- derivative Financial liabilities Bank loans Accounts payable Other payable Bonds payable	Effective Interest Rate （％） 0.90 - - 0.073 Weighted Average Effective Interest Rate （％） 1.02 - - 0.073		$ 808,000 574,162 82,208 - $ 1,464,370 Less Than 1 Year $ 808,000 507,405 90,257 - $ 1,405,662		$ - - - 1,485,631 $ 1,485,631 1-5 Years	$ - - - - $ - Over 5 Years	$ - - - - $ - Over 5 Years
					$ - - - 1,472,679 $ 1,472,679		$ - - - - $ -

27 . Related Parties Transactions

Except for the disclosures stated in other Notes, transactions between the Company and its related parties are disclosed below:

(1) Names and relationships of related party

	Related Party
Related Party Name	Category
SIXXON PRECISION MACHINERY CO.,LTD.	Investor with significant
`（`henceforth referred to as`「`SIXXON`」）`	influence
SIXXON PRECISION MACHINERY CO.,LTD.	Other related parties
`（`henceforth referred to as`「`SIXXON`」）`

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SEAMAX INTERNATIONAL LTD. （ henceforth Subsidiary referred to as 「 SIWS 」）

ACE PLUS TECHNOLOGY LIMITED Subsidiary （ henceforth referred to as 「 APWS 」）

GLOBAL-THAIXON PRECISION INDUSTRY Other related parties （ henceforth referred to as 「 GT 」）

(2) Operating revenue

Item Sales revenue	Related PartyCategory/Name Other related parties		2019 $ 21,839		2018
					$ 31,104

(3)	Purchases Related PartyCategory/Name SIWS APWS SIXXON		2019 $ 1,115,985 519,097 216,145 $ 1,851,227		2018
					$ 1,219,546 382,182 159,187 $ 1,760,915

(4) Receivables from related parties （ excluding loans to related parties ）

Item Accounts receivable Other receivables	Related Party Category/Name SIWS Other related parties GT SIXXON	December 31, 2019 $224,233 - $224,233 $ 108 29 $ 137	December 31, 2018	December 31, 2018
				$737,768 16,330 $754,098 $ - 26 $ 26

(5) Payables to related parties （ excluding borrowings from related parties ）

Item Accounts payable	Related Party Category/Name SIWS APWS SIXXON	December 31, 2019 $ 213,029 258,728 78,504 $ 550,261	December 31, 2018
			$ 236,883 178,141 59,301 $ 474,325

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$ 12,438

$ 348

Other payables

SIXXON

Terms and conditions for sales and purchases of goods from related parties are the same as that of general transactions.

(6) Lease arrangements - Group is lessee

arrangements - Group is lessee
Item Related Party Category/ Name Rent expenses Investor with significant influence arrangements - Group is lessor Item Related Party Category/ Name Rent income SIXXON	2019 $ 180 2019 $ -	2018
		$ 180 2018
		$ 200

(7) Lease arrangements - Group is lessor
(8) Transactions with other related parties

Item Refundable deposit Item Professional service fees Development expenses	Related Party Category/Name SIXXON Related Party Category/Name Other related parties Other related parties	December 31, 2019 $ 200 2019 $ - $ 771	December 31, 2018	December 31, 2018
				$ 200 2018
				$ 383 $ 651

The company provides endorsement and guarantees for subsidiaries, please refer to Table 2 attached.

(9) Compensation of key management personnel

	2019	2018
Short-term employee benefits Post-employment benefits	$ 19,866 223	$ 17,424 250

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$ 20,089

$ 17,674

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

28 . Pledged Assets

The following assets were pledged or mortgaged as collateral, the accounting items and carrying amounts were as follows:

December 31, 2019 December 31, 2018	December 31, 2019 December 31, 2018	December 31, 2019 December 31, 2018
Other financial assets	$ 23	$ 23

29 . Significant Contingent Liabilities and Unrecognized Commitments: None.

30 . Significant Losses form Disaster : None.

31 . Significant S ubsequent Events:

The company approved the resolution of SIXXON PRECISION MACHINERY CO., LTD. On September 30, 2019 by the board of directors.And on November 19, 2019, the shareholders' interim meeting approved the share conversion of SIXXON PRECISION MACHINERY CO., LTD. held by SIXXON PRECISION MACHINERY CO., LTD. This share conversion ratio is based on SIXXON PRECISION MACHINERY CO., LTD. for every 1.25 shares of common shares issued by the company's 1 ordinary shares. The trading industry was approved by the Financial Supervisory Commission Republic of China on January 14, 2020. However, SIXXON PRECISION MACHINERY CO., LTD. is a foreign company, it is necessary to declare to the Investment Board, Ministry of Economic Affairs in accordance with relevant laws and regulations and approve it. The company has obtained the Investment Board, Ministry of Economic Affairs approval letter on March 11, 2020, and the share conversion basic date was changed to April 13, 2020 by the board of directors on March 23, 2020.

32 . Exchange Rate Information of Foreign-Currency Financial Assets and Liabilities

The following information was summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

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December 31, 2019

Foreign currency assets Monetary items USD EUR JPY HKD RMB Non-monetary items Subsidiaries,Associates & Joint Ventures Accounted for Using Equity Method USD Foreign currency liabilities Monetary items USD EUR HKD RMB December 31, 2018 Foreign currency assets Monetary items USD EUR JPY HKD RMB Non-monetary items Subsidiaries,Associates & Joint Ventures Accounted for Using Equity Method USD	Foreign Currency $ 43,571 8,332 3,394 582 24,758 139,355 16,401 463 495 1,757 Foreign Currency $ 41,448 4,894 2,370 427 15,077 121,000	Exchange Rate 29.98 33.59 0.276 3.849 4.305 29.98 29.98 33.59 3.849 4.305 Exchange Rate 30.715 35.2 0.278 3.921 4.472 30.715	CarryingAmount
			$ 1,306,267 279,872 937 2,241 106,585 4,177,851 491,701 15,541 1,905 7,567 CarryingAmount
			$ 1,273,060 172,270 659 1,673 67,423 3,716,521

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Foreign currency liabilities
Monetary items
USD	13,889	30.715	426,598
EUR	330	35.2	11,606
JPY	14,329	0.278	3,986
HKD	591	3.921	2,317

The significant financial assets and liabilities denominated in foreign currencies were as follows:

Monetaryitems USD EUR	2019	E x c h a n g e g a i n s o r l o s s e s ( $ 19,743 ) ( 11,618) ($ 31,361)	2018
	E x c h a nge r a t e 30.912 （USD：NTD`）` 34.61 （EUR：NTD）		E x c h a nge r a t e 30.149 （USD：NTD`）` 35.61 （EUR：NTD）	E g l	x c h a n g e a i n s o r o s s e s
				(	$ 28,235 3,875) $ 24,360

33 . Additional Disclosures

(1) Information on significant transactions and (2) information on investees:
Financing provided to others: (Table 1)
Endorsement/guarantee provided: (Table 2)
Marketable securities held at the end of reporting period: None.
Marketable securities acquired and disposed at costs or prices at least NT$100 million or 20% of the paid-in capital: None.
Acquisition of individual real estate at costs of at least NT$100 million or 20% of the paid-in capital: None.
Disposal of individual real estate at prices of at least NT$100 million or 20% of the paid-in capital: None.
Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: (Table 3)

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Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: (Table 4)
Trading in derivative instruments: None.
Information on investees: (Table 5)
(3) Information on investments in Mainland China:
If the issuer directly or indirectly exercises significant influence or control over, or has a joint venture interest in, an investee company in the Mainland China, it shall disclose information on the investee company, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding ratio, profit or loss for the period and recognized investment gain or loss, carrying amount of the investment at the end of the period, repatriated investment gains, and limit on the amount of investment in the Mainland China. (Table 6)
Any of the following significant transactions with investee companies in the Mainland China, either directly or indirectly through a third area, and their prices, payment terms, and unrealized gains or losses:
- (1) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
- (2) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
- (3) The amount of property transactions and the amount of the resultant gains or losses.
- (4) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
- (5) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
- (6) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.

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Global PMX Co., Ltd. Financing Provided to Others For the Years Ended December 31, 2019

Table 1

Unit: Amounts in Thousands of New Taiwan Dollars


No.	Financing Company	Counter- Party	Financial Statement Account	Re- lated Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Inter- est Rate	Nature for Financ- ing	Transac- tion Amounts	Reason for Short- Term Financing	Allow- ance For Bad Debt	Colateral Item	Collateral Value	Financing Limits for Each Borrowing Company	Financing Company’ s Total Financing Amount Limits	Note
1 2 3	GLOBAL ADVANCE TECHNOLO GY LIMITED Seamax Manufacturin g Co.,Ltd.(in Dongguan) Global PMX Co., Ltd.(in Dongguan)	GLOBAL PMX CO., LTD. (in Zhejiang) GLOBAL PMX CO., LTD. (in Zhejiang) GLOBAL PMX CO., LTD. (in Zhejiang)	Other receivables from related parties Other receivable s from related parties Other receivable s from related parties	Yes Yes Yes	$1,871,602 210,691 211,569	$ 1,804,631 - -	$1,519,821 - -	2%~ 5% - -	The Need For Short term financing The need for short term financing The need for short term financing	$- - -	Operating capital Operating capital Operating capital	$ - -	`－` `－` `－`	$ - -	$ 6,560,372 1,703,492 617,512	$ 6,560,372 1,703,492 617,512	Note 2 Note 3 Note 4

Note 1: The maximum financing amount provided by the Company is calculated as follows:

(1) Nature of financing attributed to business transaction, each separately financing amount shall not exceed amount of transactions between two parties, aggregate financing amount shall not exceed 20% of net worth of the Company for the period. Transaction amount refers to the higher of purchases or sales between two within the latest year. Nature for financing attributed to short-term financing needs, each separately financing amount shall not exceed 20% of net worth of the Company for the period, and aggregate financing amount shall not exceed 40% of net worth of the Company for the period.
(2) Foreign company loans between overseas companies in which The Group holds directly or indirectly 100% of the voting hares, and financing limits for each entity,

324

as well as limits on aggregate financing amount shall not exceed 200% of net worth of the company’s lending fund. Maximum limit on financing shall not exceed 200% of net worth of the company’s lending fund.

Note 2: The total amount of GLOBAL ADVANCE TECHNOLOGY LIMITED available for lending to GLOBAL PMX CO., LTD. (in Zhejiang) are limited to a net value of equity, computed as NT$3,280,186 thousand multiplied by 200% equal to NT$6,560,372 thousand.
Note 3: The total amount of SEAMAX MANUFACTURING PTE., LTD.(in Dongguan) available for lending to GLOBAL PMX CO., LTD. (in Zhejiang) are limited to a net value of equity, computed as NT$851,746 thousand multiplied by 200% equal to NT$1,703,492 thousand.
Note 4: The total amount of GLOBAL PMX CO., LTD.(in Dongguan) available for lending to GLOBAL PMX CO., LTD. (in Zhejiang) are limited to a net value of equity, computed as NT$308,756 thousand multiplied by 200% equal to NT$617,512 thousand.

325

Global PMX Co., Ltd.

Endorsements/Guarantees Provided

For the Year Ended December 31, 2019

Unit: Amounts in Thousands of New Taiwan Dollars


No.	Endorsemen t/ Guarantee Provider	Guaranteed Party		Limits on Endorsement / Guarantee Amount Provided to Each Guaranteed Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/Guara ntee to Net Equity Per Latest Financial Statements`（％）`	Maximum Endorsement / Guarantee Amount Allowable	Guarantee Provided by Parent Company	Guarantee Provided by A Subsidiary	Guarantee Provided to Subsidiari es in Mainland China	Note
		Name	Nature of Relationship
0	Global PMX Co., Ltd.	FORTUNE TOWER HOLDING CO., LTD	Subsidiary	$ 4,978,109	$31,600	$29,980	$29,980	$ -	0.96	6,222,636	Y	N	N	Note 1
0	Global PMX Co., Ltd.	SEAMAX MANUFACTURING PTE. LIMITED	A subsidiary directly holding over 50% of the common shares.	4,978,109	266,815	254,830	239,840	-	8.19	6,222,636	Y	N	N	Note 1
0	Global PMX Co., Ltd.	GLOBAL ADVANCE TECHNOLOGY LIMITED	A subsidiary directly holding over 50% of the common shares.	4,978,109	3,133,875	3,080,445	1,106,446	-	99.01	6,222,636	Y	N	N	Note 1

Note 1: According to the Company’s operational procedures for endorsement/guarantee provided to others, the calculation for endorsement/guarantee limits is as below:
(1) The Company’s aggregate amount of endorsement/ guarantee provided to others shall not exceed 200% of net worth of the Company for the period. Accumulated amount of endorsement/guarantee provided to a single entity shall not exceed 160% of net worth of the Company. If an endorsement/guarantee provided to a single entity is made due to needs arising from business transactions, in addition to aforementioned requirements, amount of endorsement/guarantee provided shall not exceed total transaction amount with the Company for latest fiscal year (the higher of purchases or sales between two parties)
(2) Pursuant to requirements mentioned above, ceilings on endorsement/guarantee provided to others equals to net worth of the Company computed as NT$3,111,318 thousand multiplied by 200% equals 6,222,636 thousand, and ceilings on endorsement/guarantee provided to a single entity are equivalent to net worth of the Company computed as NT$3,111,318 thousand multiplied by 160% equals to NT$ 4,978,109 thousand.

326

Global PMX Co., Ltd.

Purchases from or Sales to Related Parties of At Least NT$100 Million or 20% of the Paid-In Capital For the Year Ended December 31, 2019

Table 3

Unit: Amounts in Thousands of New Taiwan Dollars


Purchase（Sale） Company	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Notes/Accounts Payable or Receivable		Note
			Purchases/Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
SEAMAX INTERNATION AL LTD.	GLOBAL PMX CO., LTD.	Parent and subsidiary	Sales	1,115,985	83%	90 days after	-	-	Accounts receivable 213,029	49%
SEAMAX INTERNATION AL LTD.	GLOBAL PMX CO., LTD.(in Zhejiang)	The same ultimate parent company	Sales	234,075	17%	90 days after	-	-	Accounts receivable 222,428	52%
ACE PLUS TECHNOLOGY LIMITED	GLOBAL PMX CO., LTD.	Parent and subsidiary	Sales	519,097	100%	90 days after	-	-	Accounts receivable 258,728	100%
SEAMAX MANUFACTURING PTE., LTD. (in Dongguan)	SEAMAX INTERNATION AL LTD.	The same ultimate parent company	Sales	283,656	28%	90 days after	-	-	Accounts receivable 115,241	25%
SEAMAX MANUFACTURING PTE., LTD. (in Dongguan)	ACE PLUS TECHNOLOGY LIMITED	The same ultimate parent company	Sales	519,872	51%	90 days after	-	-	Accounts receivable 258,728	56%
GLOBAL PMX CO., LTD. (in Zhejiang)	SEAMAX INTERNATION AL LTD.	The same ultimate parent company	Sales	834,190	26%	90 days after	-	-	Accounts receivable 66,764	6 %

327

Global PMX Co., Ltd.

Receivables from Related Parties Amounting to at Least NT$100 Million or 20% of the Paid-In Capital December 31, 2019

Table 4

Unit: Amounts in Thousands of New Taiwan Dollars

Company Name	Related Party	Nature of Relationships	Balance of Accounts Receivable from Related Parties	Turnover Ratio	Overdue Receivable-Related Parties	Overdue Receivable-Related Parties	Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Action Taken
GLOBAL PMX CO., LTD.	SEAMAX INTERNATIONAL LTD.	Parent and subsidiary	$224,233	0.49 times `／`year	$	—	$ 36,919	$
SEAMAX INTERNATIONAL LTD.	GLOBAL PMX CO., LTD.	Parent and subsidiary	213,029	4.96 times `／`year		—	122,175
SEAMAX INTERNATIONAL LTD.	GLOBAL PMX CO., LTD.(in Zhejiang)	The same ultimate parent company	222,428	0.49 times `／`year		—	35,113
ACE PLUS TECHNOLOGY LIMITED	GLOBAL PMX CO., LTD.	Parent and subsidiary	258,728	2.38 times `／`Year		—	99,741
SEAMAX MANUFACTURING PTE., LTD. (in Dongguan)	SEAMAX INTERNATIONAL LTD.	The same ultimate parent company	115,241	1.92 times `／`year		—	24,513
SEAMAX MANUFACTURING PTE., LTD. (in Dongguan)	ACE PLUS TECHNOLOGY LIMITED	The same ultimate parent company	258,728	2.38 times `／`year		—	54,308
GLOBAL ADVANCE TECHNOLOGY LIMITED	GLOBAL PMX CO., LTD.(in Zhejiang)	Parent and subsidiary	1,594,013	Note 1		—	-

Note 1: The calculation of turnover ratio excludes other receivables.

328

Global PMX Co., Ltd.

Name, Location and Other Related Information of Investees For the Year Ended December 31, 2019

Table 5						Unit:Amounts in Thousands of New Taiwan Dollar	Unit:Amounts in Thousands of New Taiwan Dollar	Unit:Amounts in Thousands of New Taiwan Dollar	Unit:Amounts in Thousands of New Taiwan Dollar	Unit:Amounts in Thousands of New Taiwan Dollar	Unit:Amounts in Thousands of New Taiwan Dollar
y	Investee Company	Location	Primary Business Activities	Original Amount	Investment	Share Held as of December 31, 2018			Net Income (Losses) of Investee for the Period	Investment Income (Loss) Recognized by the Company for thePeriod	Note
				December 31, 2019	December 31, 2018	Shares	Percentag e (%)	Carrying Amount
GLOBAL PMX CO., LTD.	FORTUNE TOWER HOLDING CO.,LTD	TMF Chambers,P.O. Box 3269, Apia, Samoa	General Investment	$2,990,017	$2,681,767	100,750	100.00	$4,145,933	$347,859	$344,261
GLOBAL PMX CO., LTD.	SEAMAX INTERNATIO NAL LTD.	Offshore Chambers ,P.O. Box 217,Apia, Samoa	Import and export of goods	28,995	28,995	1,000	100.00	30,562	60	60
GLOBAL PMX CO., LTD.	ACE PLUS TECHNOLOG Y LIMITED	Offshore Chambers ,P.O. Box 217,Apia, Samoa	Import and export of goods	1,564	1,564	50	100.00	1,356	(43)	(43)
FORTUNE TOWER HOLDING CO., LTD.	SEAMAX MANUFACTURI NG PTE. LIMITED	1004AXA Centre, 151 Gloucester Road, Wan Chai, Hong Kong	General Investment	363,000	363,000	12,200	100.00	609,486	94,961	94,961
FORTUNE TOWER HOLDING CO.,LTD.	GLOBAL WIN LIMITED	Offshore Chambers ,P.O. Box 217,Apia, Samoa	General Investment	364,103	364,103	10,000	100.00	345,130	2,884	2,884
FORTUNE TOWER HOLDING CO.,LTD.	GLOBAL ADVANCE TECHNOLOG Y LIMITED	Offshore Chambers ,P.O. Box 217,Apia, Samoa	General Investment	2,235,534	1,927,104	72,750	100.00	3,280,186	264,947	264,947

Note: The share of profits/losses of investee includes the effect of unrealized gross profits/losses on intercompany transactions.

329

Global PMX Co., Ltd.

Information on Investment in Mainland China

For the Year Ended December 31, 2019

Table 6 Unit:Amounts in Thousands of New Taiwan Dollars

The investee company in Mainland China, main business and products, total amount of paid-in capital, method of investment, accumulated outflow and inflow of investment from Taiwan, percentage of ownership, share of profits/losses, accumulated inward remittance of earnings.


Investee Company in Mainland China	Primary Business Activities	Paid-In Capital	Method of Investment (Note 1)	Accumulated Outflow Remittance for Investment from Taiwan as of January 1, 2018	Remittance of Funds		Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2018	Net Income of the Investee for the Period	% Ownership of Direct or Indirect Investment	Investment Gain or Loss for the Period (Note 2)	Carrying Amount as of December 31, 2018	Accumulated Repatriation of Investment Incom as of December 31, 2018	e Note
					Outflow	Inflow
SEAMAX MANUFACTURING PTE., LTD. (in Dongguan)	Production and sales of computer hard disk components, industrial control components, precision die, mold standard parts, high-grade hardware, high-end construction hardware, plumbing equipment and hardware, new electronic components, automotive key components, anti-lock braking system.	$359,046	2	$363,000	$ -	$ -	$363,000	$102,592	100.00	$102,592	$851,746	$ - -
GLOBAL PMX CO., LTD. (in Dongguan)	Production and sales of disk drive components, new electronic components, plumbing equipment and hardware, automotive key components, anti-lock braking system.	294,300	2	364,103	-	-	364,103	1,536	100.00	1,536	308,756	26,252

330


GLOBAL PMX CO., LTD. (in Zhejiang)	Development, research, production and sales of various types of large-capacity optical, disk drives and components, semiconductor components, new electronic components, digital cameras, precision online measuring instruments, precision die, mold standard parts and medical precision parts, automotive precision parts.	1,459,120	2	1,055,339	-	-	1,055,339	274,635	100.00	274,635	2,628,215	- -
GLOBAL PMX CO., LTD. (in Jiaxing)	Development, research, production and sales of automotive parts, general parts, first-class medical equipment, computer hardware and software, electronic components technology research and development.	600,700	2	292,450	308,250	- -	600,700	2,610	100.00	2,610	570,481	- -

Note 1: Methods of investment are classified into following three categories:

Direct investment in Mainland China
The Company invested in a company located in Mainland China indirectly through an existing company in the third country.

3. Others

Note 2: Investment income or loss mentioned above is recognized based on the financial statements of the parent company in Taiwan which were reviewed by its accountants for the correspounding periods.

2. Limit on investment in Mainland China:

331


C o m p a n y N a m e	Accumulated Outward R e m i t t a n c e f o r Investment in Mainland China as of December 31, 2 0 1 8	Inve st me nt Amount Authorized by Investment C o m m i s s i o n	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
GLOBAL PMX CO., LTD.（Note）	$ 2,383,142	$ 3,312,578	$ -

Note: According to “Regulations screening of application to engage in technical cooperation in Mainland China”, the Company obtained the approval from the Industrial Development Bureau of Ministry of Economic Affairs issued to Headquarters on October 24 2017, and effective on October 19, 2017, so the amount the Company invested in Mainland China is not subject to the upper limit on the amount investment stipulated by investment commission, MOEA.
Investee companies in Mainland China endorsed/guaranteed or provided collaterals by entities located in third area: None.
Financing provided to or from investee companies in Mainland China directly and indirectly through third area: Please refer to Table 1 for more information.
Other transactions incurred significant impacts on profit or loss for the period or financial position for the period: None.

332

§ The Contents of Statement of Major Accounting Items §

Item
Major Accounting Items in Assets, Liabilities
and Equity
Statement of Cash and Cash Equivalents
Statement of Receivables
Statement of Other Receivables
Statement of Inventories
Statement of Changes in Investment Accounted
for Using Equity Method
Statement of Changes in Property, Plant
and Equipment
Statement of Changes in Intangible Assets
Repaid and Advance
Other Current Assets
Statement of Changes in Financial Assets
Measured at Fair Value Through Profit or
Loss- Non Current
Statement of Deferred Income Tax Assets
Statement of Current Borrowings
Statement of Account Payables
Statement of Other Payables
Statement of Other Current Liabilities
Statement of Deferred Income Tax
Accounting Items in Profit or Loss
Statement of Operating Revenue
Statement of Cost of Revenue
Statement of Operating Expenses
Statement of Administrative Expenses
Statement of Research and Development
Expense
Statement of The Net Amount of Other
Revenues and Gains and Expenses and Losses
Statement of Finance Costs
Statement nt of Labor, Depreciation and
Amortization by Function

Statement Index

Statement 1
Statement 2
Note 8
Statement 3
Statement 4
Note 11
Note 13
Note 14
Note 14
Note 7
Note 23
Statement 5
Statement 6
Note 18
Note 18
Note 23
Statement 7
Statement 8
Statement 9
Statement 9
Statement 9
Note 22
Note 22
Statement 10

333

Global PMX Co., Ltd. Statement of Cash and Cash Equivalents December 31, 2019

Statement 1 Item	Unit: Amounts in Thousands of New Taiwan Dolla rs Description Amount	Unit: Amounts in Thousands of New Taiwan Dolla rs Description Amount
Cash Petty cash Cash in banks Checking accounts and demand deposits Foreign currency deposits Deposit account	IncludingUS$ 7,541 thousand @29.98, HKD 582 thousand @3.849, EUR 4,[email protected], JPY 3,310thousand @0.276, RMB 14,077 thousand@4,305	$ 41 344,857 432,869 350,766 $1,128,533

334

Global PMX Co., Ltd. Statement of Receivables December 31, 2018

Statement 2

Unit: Amounts in Thousands of New Taiwan Dollars

Client Name	Description Amount	Description Amount
Non-related parties SGTTH USCPR SGT510 VTCZ CVDUS Others (Note) Related Parties SIWS Total Less`：`Allowance for uncollectible accounts	Payments `〃` `〃` `〃` `〃` `〃` Payments (	$ 148,415 90,869 58,897 59,543 53,481 264,431 224,233 899,869 8,280) $ 891,589

Note: The amount of individual client included in others does not exceed 5% of the account balance.

335

Global PMX Co., Ltd. Statement of Inventories December 31, 2019

Statement 3

Unit: Amounts in Thousands of New Taiwan Dollars

Item	Cost Market Value	Cost Market Value	Cost Market Value
Finished goods		$ 89,039	$ 115,017

336

Global PMX Co., Ltd.

Statement of Changes in Investments Accounted for Using Equity Method For the Year Ended December 31, 2019

Statement 4

Unit: Amounts in Thousands of New Taiwan Dollars

Balance, Januar	y 1, 2019 Additions in Inv	estment Decrease in Investment		C	umulative		Balance, December 31, 201	8 Market Value or Net Assets Value	al Amount Collater al Note
Investees Shares (In Thousands)	Amount Shares (In Thousands) A	mount Shares (In Thousan ds) Amo unt Inve inco `（`lo	st m ss	ment e ) tra adj	nslation ustment Si of	d fs	e stream et Cash dividends Shares (In Thousands) `％` Shares	Amount Unit Price Tot
Fortune Tower Holding Co., Ltd 90,750 Seamax International Ltd. 1,000 Ace Plus Technology Limited 50	$ 3,683,837 10,000 31,252 1,432 $3,716,521	$ 308,280 $ - - - - - $308,250 $ -	(	$347,859 ( $ 60 43) $347,876	190,415 ) ( ( 750) (33) ( $191,198)		3,598) $ 100,750 100 - 1,000 100 - 50 100 ($ 3,598) $ -	$4,145,933 41.21 30,562 30.56 1,356 27.12 $4,177,851	$ 4,151,620 Nil 30,562 Nil 1,356 Nil $4,183,538 $

337

Global PMX Co., Ltd. Statement of Current Borrowings December 31, 2018

Statement 5

Unit: Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise

Type	Bank	Contract Period	Interest Rates (%)		Loan Commitme nts Collateral
				Balance,
				End of
				Year

Credit loan Total	Bank SinoPac DBS Bank DBS Bank Citi Bank HSBC TFCB	2019.12.09~2020.02.20 2019.10.17~2020.01.17 2019.12.27~2020.03.27 2019.12.27~2020.01.10 2019.12.18~2020.08.31 2019.10.31~2020.04.28	0.90 1.00 1.00 0.92 0.98 0.85	$ 290,000 40,000 35,000 128,000 35,000 280,000 $ 808,000	$ 299,800 Nil 449,700 `〃` - `〃` 149,900 `〃` 209,860 `〃` 359,760 `〃` $ 1,469,020

Note: As of the end of 2019, the short-term loans amount that the Company has not used were 822,561thousand.

338

Global PMX Co., Ltd. Statement of Accounts Payables December 31, 2019

Statement 6

Unit: Amounts in Thousands of New Taiwan Dollars

Vendor Name	Description Amount	Description Amount
Non related parties NTXCA STDE TSDCH DEGDE Others (NOTE) Related parties SIWS APWS SIXXON	Payment for goods `〃` `〃` `〃` `〃` Payment for goods `〃` `〃`	$ 13,245 5,895 2,650 2,034 77 $ 23,901 $213,029 258,728 78,504 $ 550,261

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

339

Global PMX Co., Ltd. Statement of Operating Revenue For the Year Ended December 31, 2019

Statement 8 Unit: Amounts in Thousands of New Taiwan Dollars Item Description Amount	Statement 8 Unit: Amounts in Thousands of New Taiwan Dollars Item Description Amount	Statement 8 Unit: Amounts in Thousands of New Taiwan Dollars Item Description Amount
Total operating revenue Automotive, electronics and medical equipment Less`：`operating returns and allowances Net operating Revenue	(	$ 2,437,888 23,035) $ 2,414,853

340

Global PMX Co., Ltd. Statement of Cost of Revenue For the Years Ended December 31, 2019

Statement 9	Unit: Amounts in Thousands of	New Taiwan
		Dollars
Item	Amount
Finished goods-beginning of year	$	58,952
Add`：`Finished goods purchased		1,824,242
Less`：`Transferred to operating expense	(	3,011)
Finished goods-end of year	(	89,039)
Cost of goods sold	$	1,791,144

341

Global PMX Co., Ltd.

Statement of Operating Expenses

For the Years Ended December 31, 2019

Statement 10

Unit: Amounts in Thousands of New Taiwan Dollars

Item	Selling Expenses	Selling Expenses	Administrati ve Expenses	Administrati ve Expenses	Research and Developmen t Expenses Total	Research and Developmen t Expenses Total	Research and Developmen t Expenses Total
Labor costs Insurance Commission Service costs Development expense Others (Note)		$ 14,419 - 11,088 - - 7,336 $ 32,843		$ 57,678 5,551 - 4,563 - 10,316 $ 78,108		$ 24,032 - - - 4,126 438 $ 28,596	$ 96,129 5,551 11,088 4,563 4,126 18,090 $ 139,547

Note: The amount of each item in others does not exceed 5% of the account balance.

342

Global PMX Co., Ltd.

Statement of Labor, Depreciation and Amortization by Function For the Years Ended December 31, 2019 and 2018

Statement 11

Unit: Amounts in Thousands of New Taiwan Dollars

			2019	2019					2018	2018	2018

	Cost of Revenue		Operating Expenses		Total		Cost of Revenue		Operating Expenses Total
Labor cost`（`Note`）` Salary Health Insurance Pension Board compensat ion Other Employee benefits Depreciation Amortization		$ - - - - - $ - $ - $ -		$ 81,600 5,135 2,548 11,981 4,768 $106,032 $ 233 $ 38		$ 81,600 5,135 2,548 11,981 4,768 $106,032 $ 233 $ 38		$ - - - - - $ - $ - $ -		$ 87,322 4,878 2,649 10,445 4,346 $109,640 $ 463 $ 227	$ 87,322 4,878 2,649 10,445 4,346 $109,640 $ 463 $ 227

Note: As of December 31, 2019 and 2018, the Company had 70 and 68 employees for 2019, 2018, and there were 8 non-employee directors for both years.

343

AI assistant

GLOBAL PMX — Annual Report 2019

52403_rns_2020-06-30_2929308d-05bc-46b8-be41-6a59a951cf78.pdf

GLOBAL PMX CO., LTD.

2019 Annual Report

1. Spokesperson ：

2. Addresses and Telephone Numbers for Headquarter and Plant ：

3. Stock Transfer Agent ：

4.Name of CPA, accountant firm, address, telephone and website of CPA responsible for the latest annual financial statement ：

5.Overseas Securities Exchange : N/A

6.Corporate Website : http://www.global.com.tw

Table of Contents

IV. Capital Overview

VI. Financial Overview

I. Letter to Shareholders

Thank you for your long-term support and encouragement.

1. The 2019 Annual Operating Report

1. Business Report 2019:

(1) Operating results in 2019:

(2) Budget implementation:

(3) Financial revenue, expenditure, and profitability analysis:

(4) Research and Development status:

II. Company Profile

1. Date of Incorporation: February 18, 1987

2. A Brief History of the Company

III. Corporate Governance Report

1. Organizational System

(1) Organizational System

i. Organization Chart

2. Information of Directions, Supervisors, General Managers, Deputy General Managers, Deputy Assistant General Managers, and the Supervisors of All the Company’s Divisions and Branch Units

(1) Information of Directors and Supervisors

ii. Major Shareholders of Institutional Shareholders:

iii. Major shareholders of the Company’s major institutional shareholders

(2) Information of General Managers, Deputy General Managers, Assistant General Managers and other Department and Branch Managers:

3. Most Recent Remuneration of Directors, Supervisors, General Managers, Deputy General Managers

(1) Remunerations of Directors (including independent directors)

Range of Remuneration

(3) Remunerations of the General Manager and Deputy General Manager:

Range of Remuneration

(4) Employees’ Profit Sharing Granted to the Executive Officers Team:

(1) The state of operations of the board of directors

The status and policy of diversified board members

3. The formation of diversified board members:

3. The status of continuing education opportunities for directors in 2019

(4) Composition, responsibilities and operation status of the Compensation Committee:

ii. Operation status of the Compensation Committee

(7) If the Company has adopted corporate governance best-practice principles or related bylaws, disclose how these are to be searched:

(8) Other significant information that will provide a better understanding of the state of the Company’s implementation of corporate governance may also be disclosed:

3. The status of manager and employee educational training of 2019:

(9) Status of implementation of internal control system:

Global PMX Co., LTD.

Statement of Internal Control System

i. The Shareholders Meeting

5. Information on CPA Professional Fees:

6. Information on Replacement of Certified Public Accountant:

(1) Regarding the former CPA:

(2) Regarding the successor CPAs

(3) The reply of former CPAs on Article 10.6.1 and Article 10.6.2.3 of the standards:

(1) Change in equity transfer and equity pledge:

(3) Information on equity pledge: The counterparties of share pledges are not related parties.

9. Relationship Information, if among the Company’s 10 Largest Shareholders any One is a Related Party or a Relative within the Second Degree of Kinship of Another:

10. The Total Number of Shares and Total Equity Stake Held in any Single Enterprise by The Company, Its Directors and Supervisors, Managers, and any Companies Controlled either Directly or Indirectly by the Company:

IV. Capital Overview

1. Capital and Shares

(1) Sources of Capital

i. The formation of capital

ii. Type of stock

(2) Shareholder Structure

(3) Shareholding Distribution Status

(4) Major Shareholders:

(6) Company’s Dividend Policy and Implementation Status

i. Dividend policy provided in the Articles of Incorporation

ii. Distribution of dividends at this fiscal year:

(7) Effect upon Business Performance and Earnings Per Share of any Stock Dividend Distribution Proposed or Adopted at the Most Recent Shareholder’ Meeting:

(8) Compensation of Employees, Directors, and Supervisors

(9) Share Repurchases: None.

2. Corporate Bonds:

Corporate Bonds

Information on Convertible Corporate Bond

3. Preferred Shares: None.

GLOBAL PMX Annual Report 2019