SINBON Electronics — AGM Information 2020

Jul 21, 2020

SINBON ELECTRONICS CO., LTD. Year 2020 Annual Meeting Minutes of Shareholders

Time: 9:00 a.m. on Friday, Jun. 12, 2020.

Place: NO. 77, LN. 833, WENFA Rd., MIAOLI 360, TAIWAN.

Total outstanding shares: 232,777,468 shares.

Total shares represented by shareholders present in person or by proxy: 208,818,725 shares.

The percentage of shares held by shareholders present in person or by proxy: 89.70 %.

Chairman: Joseph Wang (Chairman of the Board)

Recorder: Angela Cheng

Chairperson Remarks (omitted)

Reports on Company Affairs:

1. 2019 Business Report.( appendix 1)

2. Audit Committee Review Report on the 2019 Financial Statements.( appendix 2)

3. The Status of Domestic Unsecured Convertible Bonds VI.

4. Remuneration to Employees, Directors and Supervisors.

5. Amendment to the Ethical Corporate Management Best Practice Principles, Procedures for Ethical Management and Guidelines for Conduct, and Guidelines for the Adoption of Codes of Ethical Conduct. ( appendix 4)

Proposals:

1. Proposed by the Board

Proposal:

Adoption of the 2019 Business Report and Financial Statements Explanation:

(1)The Company’s Financial Statements, including the balance sheet,

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income statement, statement of changes in shareholders’ equity, and
statement of cash flows, were audited by independent auditors,
Huang, Tzu-Ping and Chen, Ming Hung of Ernst & Young CPA Firm.
Also Business Report and Financial Statements have been approved
by the Board and examined by the Audit Committee.

• (2) The 2019 Business Report, independent auditors’ audit report, and the above-mentioned Financial Statements are attached appendix 1 and 3.

Resolution: Approval votes 191,387,864, disapproval votes 2,347, and abstention votes 16,837,284 of total votes 208,227,49. The proposal was approved.

2. Proposed by the Board Proposal:

Adoption of the Proposal for Distribution of 2019 Profits Explanation:

• (1) The Board has adopted a Proposal for Distribution of 2019 Profits in accordance with the Company Act and Articles of Incorporation. Please refer to the 2019 PROFIT DISTRIBUTION TABLE below.

• (2) Upon the approval of the Annual Meeting of Shareholders, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date, distribution date, and other relevant issues.

• (3) In the event that, before the distribution record date, the proposed profit distribution is affected by an amendment to relevant laws or regulations, a request by the competent authorities, or a buyback of shares or issuance of new shares for transferring treasury shares to employees or for equity conversion in connection with domestic or overseas convertible corporate bonds or other convertible securities or employee stock options, it is proposed that the Board of Directors be authorized to adjust the cash to be distributed to each share based on the number of actual shares outstanding on the record date for distribution.

• (4) Please refer to the Profit Distribution Table as follows:

SINBON ELECTRONICS CO., LTD. PROFIT DISTRIBUTION TABLE Year 2019

SINBON ELECTRONICS CO., LTD. PROFIT DISTRIBUTION TABLE Year 2019
	（Unit: NTD）
Items	Total
Beginning retained earnings	$1,266,831,082

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Add: Other comprehensive profit(Defined
benefitplan actuarialprofits in 2019)	7,730,785
Add: netprofit after tax	1,718,510,523
Less: 10% legal reserve	(172,624,131)
Special surplus reserve	(139,289,750)
Distributable net profit	2,681,158,509
Distributable items:
Cash Dividend to shareholders(NT$5.3/share)	(1,233,720,580)
Unappropriated retained earnings	$1,447,437,929

Resolution: Approval votes 191,388,219, disapproval votes 2,930, and abstention votes 16,836,346 of total votes 208,227,495. The proposal was approved.

Discussion Matters:

1. Proposed by the Board

Proposal:

Amendment to Articles of Incorporation, please proceed to discuss. Explanation:

In order to conform to the needs of commercial practice, the company
hereby proposes to amend the Articles of Incorporation. Please refer to
appendix 4 for details.

Resolution: Approval votes 190,501,082, disapproval votes 2,962, and abstention votes 17,723,451 of total votes 208,227,495. The proposal was approved.

2. Proposed by the Board

Proposal:

Beijing SINBON TongAn Electronics Co., Ltd. (hereinafter referred to as "
Beijing SINBON TongAn "), an important subsidiary of the company,
made an initial public offering of RMB common stock (A shares) and
applied for listing on the Shenzhen Stock Exchange or other Stock
Exchanges, please proceed to discuss.

Explanation:

• (1) Purpose of subsidiaries applying for listed transactions in overseas securities markets.

Beijing SINBON TongAn, an important subsidiary of the company,
applied for listing transactions on the Shenzhen Stock Exchange,

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which is to: expand business development, attract professionals,
improve public influence in the land market, enhance the corporate
social image and expand the effectiveness of the integration of the
company's resources.

• (2) Impact on the company's finances and business projected organizational structure and business adjustments and the impact of its adjustments on the company.

• Impact on Finance

• Beijing SINBON TongAn A shares listing is conducive to increasing the shareholder equity of SINBON ELECTRONICS Co., Ltd., After the listing of Beijing SINBON TongAn A shares, the increase of financing pipeline in mainland China will effectively reduce the financial costs, and with the number of funds raised to invest in the postpartum period, it is expected to reduce production costs, improve economic efficiency, and then bring about an increase in net profits, conducive to increasing the net assets belonging to the shareholders of SINBON ELECTRONICS Co., Ltd.

• Impact on the business

Beijing SINBON TongAn can further expand its production scale,
improve its research and development potential, and lift the barriers
of the industry and its existing advantages to boost revenue. As
Beijing SINBON TongAn gradually moves towards renewable energy
sectors, its prospects of expanding Group business would benefit
from its transformation, expansion of production and business scale,
and talent acquisition.

• (3) Impact of expected organizational structure adjustments. The business of Beijing SINBON TongAn is not in competition with other subsidiaries of the Group, and there will be no immediate changes due to the listing. Its organizational structure includes shareholders’ meeting, Board of Directors, supervisory committee, independent directors, and secretary of the Board of Directors which are established pursuant to local laws and regulations and has no impact on the Company.

• (4) Shareholding dispersion mode, expected reduction of holding ratio. Beijing SINBON TongAn intends to handle the initial public offering of RMB common stock (A shares) (hereinafter referred to as "this public offering") in mainland China and apply for listing on the Shenzhen Stock Exchange or other Stock Exchanges.The total number of shares of Beijing SINBON TongAn in this public offering does not exceed 20% of the total equity after issuance and SINBON ELECTRONICS Co., Ltd., is expected to hold 65% equity. The final issue is proposed to request

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the shareholders ' meeting to authorize the Board of directors or its
authorized persons to make the capital needs of the issuer,
Communicate with China Securities Regulatory Commission and
market conditions in consultation with the main underwriters in
mainland China.

• (5) Pricing guideline

• In accordance with the laws and regulations in China, price inquiry shall be conducted. The issue price is then determined based on the inquiry outcomes and market conditions or by the price set by the competent authority of securities in China.

• (6) Equity transferee or specific individuals

• The targeted subscribers of new shares issued by Beijing SINBON TongAn are inquired investors meeting the conditions stipulated by the laws and regulations in China and rules of regulatory bodies, domestic natural persons and juridical persons with A-share accounts, and other investors that meet the requirements set by the China Securities Regulatory Commission. The Company will not participate in the subscription.

• (7) Impact on the Company’s listing in Taiwan.

• As Beijing SINBON TongAn is listed in mainland China, it is handled in accordance with the relevant laws and regulations of the competent authorities, and Beijing SINBON TongAn is still an important subsidiary of the company, which does not affect the company's continued listing on the Taiwan Stock Exchange.

• (8) Supplementary information

• *For long-term development, Beijing SINBON TongAn has applied to the competent authorities in China for IPO at the A-share market. As the documents have not been submitted, the timing of submission and the length of application period are uncertain and unpredictable. *To facilitate Beijing SINBON TongAn’s IPO of RMB-denominated ordinary shares (A Shares) and listing in China, it is proposed to the shareholder’s meeting of the Company to grant the Board of Directors of the Company or Beijing SINBON TongAn (depending on the situations) full discretion on adjustments arising from actual execution of listing, suggestions from government departments, laws and regulations in China, market conditions, or actual implementation; and matters pertaining to the listing.

• Resolution: Approval votes 189,748,662, disapproval votes 761,754, and abstention votes 17,717,079 of total votes 208,227,495. The proposal was approved.

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Other Matters: None.

Questions and Motions: None.

Adjournment

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Appendix 1 The 2019 Business Report

Business Report

Dear Shareholders,

First of all, I would like to thank you for your continuing support
throughout the year. SINBON has responded to the changing business
climate by adopting an aggressive stance in strengthening our
competitiveness. Total consolidated revenue for 2019 was
NT$17,886,170 thousand, a 14.32% increase compared with
NT$15,645,253 thousand in 2018. Net income increased 21.58% to
NT$1,718,511 thousand, compared with 2018 net income of
NT$1,413,477 thousand. Meanwhile, basic earnings per share increased
19.33% to NT$7.47, compared with NT$6.26 a year earlier.

Operating policies and strategies, the operation result in 2019, budget
implement, profitability, and research and development (R&D) status
are illustrated as follows:

I. Operation Policies and Strategies :

A. Policies:

• a. To develop a variety of component products and joint design and provide manufacturing integration Service: SINBON is providing one-stop shop services for clients in components designing and manufacturing. In order to reach the target, SINBON is continuously enhancing the R&D team abilities in the development of niche products and actively expanding vertical integration for supplying products to new segment markets, developing new products and serving for new customers.

• b. To extend agency products: Diversification strategy is using for the agency departments by investment or strategic alliances to seek cooperation opportunity through SINBON marketing channels.

• c. Growth via alliance, merge, and acquisition: In order to continuous growth in the future, the Company will seek any opportunities to invest or buy a company, which is in component industry.

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B. Strategies ：

• a. Alliance, merge, and acquisition ： In order to catch component industry high speed changes, we are looking for alliance opportunities with other companies for expanding our scope and enhance ourselves capabilities.

• b. Performance Improvement ： Headquarter office has set up a full multi-functional department to evaluate and trace the performance of every individual business unit and assist everyone to upgrade and improve.

• c. Niche Markets Focus ： Continuously focusing on niche markets and high gross profit fields. Medical, Auto, Green, Industrial, and Communication industries had been picked and they will be SINBON target markets.

II. The Operation Result in 2019 : (Consolidated)

				Unit: NT$ thousands	Unit: NT$ thousands
	2019		2018		percent change
Net Sales	$17,886,170	100%	$15,645,253	100%	14.32%
Gross Profit	4,589,668	25%	3,919,945	25%	17.09%
Operating Income	1,892,758	10%	1,631,689	10%	16.00%
Pre-tax Income	2,169,163	12%	1,920,068	12%	12.97%
Net Income	1,718,511	9%	1,413,477	9%	21.58%

III. Budget implement:

The Company is not required to make public Company's 2019
financial forecast information; however, overall business revenue
and net income reached 95.4% and 109.07% respectively of the
internal business targets in 2019.

IV. Profitability: (Consolidated)

Profitability:(Consolidated)
Items	2019	2018
Return Of Aessts(%)	16.43	10.58
Return Of Equites(%)	23.55	21.59
Profit before tax to capital(%)	93.23	84.70
Net Profit Rate(%)	9.61	9.03
Basic EPS(NT$ Dollar)	7.47	6.26

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V. Research and development (R&D) status: (Consolidated)

Year	Results of R&D
2009~2010	1. Deeply created more related products and engineering capacities in data capture field including Single & four slot Ethernet Cradle、Vehicle cradle、and Vehicle charger, which is used in industrial terminal devices.
2009~2010	2. For the development and application of GPS module & Zigbee module, using the development of embedded system, from hardware platform design, OS porting to implement software application, and had developed the technology of embedded system for commercial PDA and industrial terminal engineering prototype products.
2011~2012	Successfully developed HDMI, DDR3, DDR4, and USB connectors and deepened photovoltaic (PV) product development, and our junction box, PV connector, and PV cable have passed TÜV and UL certification.
2013~2014	SINBON won a gold prize from iF Design Award 2013 for our latest Brezze® Nebulizer, a portable drug nebulizer developed by DigiO2 International Co., Ltd. (our re-invested enterprise) in collaboration with the NTUH Telehealth Center under the Telecare Service Project.
2015~2016	1. Tablet PC for Shun Feng logistics development to DVT stage. 2. Solar monitoring system developed to DVT stage. 3. Finished development EV charger、charging gun and AC charging pile.
2017~2018	1. Wisdom medicine cabinet control lines, and adjustable window light control lines. 2. Robotic arm control lines, electronic fireplace, and smart grid assembly.
2018~Now	1. AIOT (Artificial Intelligence of Things) 2. Smart Heat pump water heater, display system of parking.

In 2019, we invested a total of NT$632,828 thousand for R&D, with 8.6% higher than previous year . In the future, SINBON actively develop electronic parts and components for the Internet of Thing (IoT), robots, and smart home applications. We will spend at least NT$300 million each year or over 3% of revenue on R&D in the future.

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Finally, management team appreciates for shareholders’ greatest
support and encouragement, and hope that shareholders will continue
to provide us guidance and suggestions in the future. We will do our
best to achieve higher profits and returns for all shareholders.

Best Regards,

Chairman and Chief Operation Officer
Joseph Wang

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Appendix 2 Audit Committee Review Report on the 2019 Financial Statements

AUDIT COMMITTEE REVIEW REPORT

April 13, 20120

The Board of Directors has prepared the Company’s 2019 Financial
Statements. The CPA firm of Ernst & Young, by CPA Huang, Tzu-Ping and
Chen, Ming Hung, was retained to audit the Company’s Financial
Statements and has issued an audited report relating to the Financial
Statements. The Financial Statements, Business Report, and the Proposal
for Distribution of 2019 Profits have been reviewed and determined to
be correct and accurate by Supervisor. According to Article 219 of the
Company Law, we hereby submit this report.

Independent Director: Wea, Chi-Lin

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Appendix 3 2019 Financial Statements

Independent Auditors’ Report

To Sinbon Electronics Co., Ltd.

Opinion

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

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Metter – Making Reference to the Audits of Component Auditors section of our report), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2019 and 2018, and its consolidated financial performance and cash flows for the years ended 31 December 2019 and 2018, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of 2019 consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Order No.

Financial-Supervisory-Securities-Auditing-1090360805 issued by the Financial Supervisory Commission on 25 February 2020, and auditing standards generally accepted in the Republic of China; we conducted our audit of 2018 consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2019 consolidated financial statements. 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.

1. Valuation for inventories

As of 31 December 2019, the Group’s net inventories amounted to NT$4,499,437 thousand. Net inventories accounted for 26% of consolidated total assets, which was considered material in the consolidated statements. As the fluctuation in market demand and the fast-changing technology could cause losses of obsolete and slow-moving inventories, the assessment of the inventory write-downs require significant management judgement. We therefore determined this a key audit mater.

Our audit procedures included, but not limited to, understanding and testing the adequacy of accounting policy around obsolete and slow-moving inventories, including historical analysis of loss ratio of scrapped inventories; evaluating stocktaking plan and selecting important storage locations to observe inventory counts to ensure inventory quantities and status; obtaining inventory aging schedule to test whether inbound and outbound records are accurate; re-calculating the unit cost of inventories; and evaluating and testing net realized value adopted by management. We also assessed the adequacy of disclosures of financial assets. Please refer to Notes 5 and 6 to the Group’s consolidate financial statements.

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2. Impairment of accounts receivable

As of 31 December 2019, gross accounts receivable and loss allowance by the Group amounted to NT$4,120,057 thousand and NT$27,176 thousand, respectively. Net accounts receivable accounted for 24% of consolidated total assets, which was considered material in the consolidated statements. Since the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, it is necessary to divide account receivables into groups in the process of measurement and analyze the application of related assumptions, including appropriate aging intervals, their respective loss rate, and consideration of the forward-looking information. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit mater.

Our audit procedures included, but not limited to, analyzing the appropriateness of the grouping of account receivables and confirming whether customers with significantly different credit loss types are grouped by similar risk characteristics. SINBON Electronics Co., Ltd. and its subsidiaries are tested by provision matrix, including evaluating the appropriateness of the aging intervals and the accuracy of the basic data by reviewing the original certificates; testing the related statistics information of loss rate based on the rolling rate within one year, including the average loss rate and standard deviation; considering the reasonableness of the forward-looking information which takes into account loss rate, such as economic growth rate and unemployment rate; assessing whether such forward-looking information affected the loss rate. We also assessed the adequacy of disclosures of financial assets. Please refer to Notes 5 and 6 to the Group’s consolidate financial statements.

Other Matter– Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain consolidated subsidiaries, which statements reflected total assets of NT$3,188,875 thousand and NT$1,991,440 thousand, constituting 19% and 14% of consolidated total assets as of 31 December 2019 and 2018, respectively, and total operating revenues of NT$3,966,252 thousand and NT$2,721,718 thousand, constituting 22% and 17% of consolidated operating revenues for the years ended 31 December 2019 and 2018, respectively. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on

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the audit reports of the other auditors. We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method whose statements are based solely on the reports of other auditors. These associates and joint ventures under equity method amounted to NT$373,809 thousand and NT$321,922 thousand, both representing 2% of consolidated total assets as of 31 December 2019 and 2018. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$83,796 thousand and NT$63,268 thousand, representing 4% and 3% of the consolidated net income before tax for the years ended 31 December 2019 and 2018, respectively, and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$29,200 thousand and NT$(2,107) thousand, representing (21)% and (8)% of the consolidated other comprehensive income for the years ended 31 December 2019 and 2018, respectively.

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 requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by 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 ability to continue as a going concern of the Group, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee or supervisors, are responsible for overseeing the financial reporting process of the Group.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

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Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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 ability to continue as a going concern of the Group. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s

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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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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 2019 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

==> picture [419 x 73] intentionally omitted <==

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Other

We have audited and expressed an unqualified opinion including an Other Matter Paragraph on the parent company only financial statements of the Company as of and for the years ended 31 December 2019 and 2018.

/s/Huang, Tzu Ping

/s/Chen, Ming Hung

Ernst & Young, Taiwan

20 March 2020

Notice to Readers

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

Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

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English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

31 December 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	As of 31 December
		2018 $3,579,189 $2,625,021 177,788 171,099 829,969 468,086 4,092,881 4,125,261 137,883 182,290 23,681 - 4,499,437 3,527,954 214,565 245,042 13,489 16,795 13,568,882 11,361,548 285,756 276,727 373,809 354,103 2,154,817 1,854,001 218,139 - 91,601 94,820 138,038 82,937 353,925 177,400 3,616,085 2,839,988 2019
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss, current Notes receivable, net Accounts receivable, net Other receivables Current income tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income,noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Other intangible assets Deferred tax assets Other non-current assets Total non-current assets	4,6(1) 4,6(2) 4,6(3) 4,6(4),7 7 4,6(5) 4,6(6) 4,6(7) 4,6(8) 4,6(18) 4,6(22) 4,6(9)

(continued)

$17,184,967

$14,201,536

Total assets

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English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(Continued) 31 December 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity	Notes	As of 31 December	As of 31 December
		2019	2018
Current liabilities Short-term loans Financial liabilities at fair value through profit or loss, current Contract liabilities,current Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities,current Current portion of bonds payable Current portion of long-term loans Other current liabilities Total current liabilities Non-current liabilities Long-term loans Deferred tax liabilities Lease liabilities,noncurrent Long-term deferred revenue Net defined benefit obligation, noncurrent Other non-current liabilities-others Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Certificates of bond-to-stock conversion Subtotal Additional Paid-in Capital Retained earnings Legal reserve Special reserve Unappropriated earnings Subtotal Other components of equity Exchange differences on translation of foreign operations Unrealized gains or losses measured at fair value through other comprehensive income Subtotal Non-controlling interests Total equity Total liabilities and equity	4,6(10) 4,6(11) 4,6(16) 7 4 4,6(18) 4,6(12) 4 4,6(22) 4,6(18) 4,6(13) 4,6(14) 6(15) 6(15) 4 4,6(15)	$2,728,412 7,910 964,723 188,645 3,405,754 1,063,082 177,037 51,312 7,141 2,207 227,034	$1,804,995 - 328,405 210,226 3,127,462 875,407 192,591 - 404,554 2,395 35,537
		8,823,257	6,981,572
		7,956 333,862 131,633 14,612 76,432 2	7,646 298,241 - 15,505 88,510 13,430
		564,497	423,332
		9,387,754	7,404,904
		2,325,237 1,457	2,257,273 9,681
		2,326,694	2,266,954
		1,228,781	904,086
		1,108,150 341,933 2,993,072	966,802 233,441 2,543,293
		4,443,155	3,743,536
		(522,918) 41,695	(333,087) (8,846)
		(481,223)	(341,933)
		279,806	223,989
		7,797,213	6,796,632
		$17,184,967	$14,201,536

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

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English Translation of Consolidated Financial Statements	Originally Issued in Chinese	Originally Issued in Chinese
SINBON ELECTRONICS CO., LTD. AND	SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended 31 December 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)
		For the years ended	31 December
	Notes	2019	2018
Operating revenues	4,6(16),7	$17,886,170	$15,645,253
Operating costs	6(5.19),7	(13,296,502)	(11,725,308)
Gross profit-net		4,589,668	3,919,945
Operating expenses	6(19),7
Sales and marketing expenses		(1,007,907)	(850,762)
General and administrative expenses		(1,055,506)	(853,495)
Research and development expenses		(632,828)	(582,938)
Expected credit losses	4,6(17)	(669)	(1,061)
Subtotal		(2,696,910)	(2,288,256)
Operating income		1,892,758	1,631,689
Non-operating income and expenses	6(20)
Other income		197,286	126,093
Other gains and losses		44,292	159,837
Finance costs		(48,969)	(43,371)
Share of profit or loss of associates and joint ventures	4,6(7)	83,796	45,820
Subtotal		276,405	288,379
Income from continuing operations before income tax		2,169,163	1,920,068
Income tax expense	4,6(22)	(491,312)	(548,539)
Net income		1,677,851	1,371,529
Other comprehensive income (loss)	6(21)
Items that will not be reclassified subsequently to profit or loss
Remeasurements of defined benefit plans		9,663	(1,170)
Unrealized gains on equity instruments measured at fair value through other comprehensive income		15,392	110,611
Unrealized gains on equity instruments measured at fair value through other comprehensive income of associates and joint ventures	6(7)	35,149	(2,107)
Income tax related to items that may not be reclassified subsequently		(1,933)	1,624
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		(239,925)	(106,632)
Income tax related to items that may be reclassified subsequently		45,457	22,757
Total other comprehensive income (loss), net of tax		(136,197)	25,083
Total comprehensive income		$1,541,654	$1,396,612
Net income attributable to:	4,6(22)
Stockholders of the parent		$1,718,511	$1,413,477
Non-controlling interests		(40,660)	(41,948)
		$1,677,851	$1,371,529
Comprehensive income (loss) attributable to:
Stockholders of the parent		$1,586,951	$1,441,241
Non-controlling interests		(45,297)	(44,629)
		$1,541,654	$1,396,612
Earnings per share (NTD)	4,6(22)
Earnings per share-basic		$7.47	$6.26
Earnings per share-diluted		$7.38	$6.10
(The accompanying notes are an integral part of the consolidated financial statements)

21

Other changes in additional paid-in capital From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries Net income in 2018 Other comprehensive income (loss), net of tax in 2018 Total comprehensive income (loss) Increase in non-controlling interests Disposal of financial assets at fair value through other comprehensive income Bonds converted to stock Other changes in additional paid-in capital Disposal of investments accounted for under the equity method From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries Net income in 2019 Other comprehensive income (loss), net of tax in 2019 Total comprehensive income (loss) Increase in non-controlling interests Bonds converted to stock Appropriation and distribution of 2018 retained earnings Legal reserve Special reserve Cash dividends Balance as of 1 January 2018 Balance as of 31 December 2018 Balance as of 1 January 2019 Balance as of 31 December 2019 Impact of retroactive applications Adjusted balance as of 1 Janurary 2018 Appropriation and distribution of 2017 retained earnings Legal reserve Special reserve Cash dividends	English Tran S C	English Tran S C	slation of Consolidat INBON ELECTRO ONSOLIDATED ST For the years e (Expressed in T	ed Financial Statements Originally Issued in Chinese NICS CO., LTD. AND SUBSIDIARIES ATEMENTS OF CHANGES IN EQUITY nded 31 December 2019 and 2018 housands of New Taiwan Dollars) Equity Attributable to the Parent Company	ed Financial Statements Originally Issued in Chinese NICS CO., LTD. AND SUBSIDIARIES ATEMENTS OF CHANGES IN EQUITY nded 31 December 2019 and 2018 housands of New Taiwan Dollars) Equity Attributable to the Parent Company	ed Financial Statements Originally Issued in Chinese NICS CO., LTD. AND SUBSIDIARIES ATEMENTS OF CHANGES IN EQUITY nded 31 December 2019 and 2018 housands of New Taiwan Dollars) Equity Attributable to the Parent Company	ed Financial Statements Originally Issued in Chinese NICS CO., LTD. AND SUBSIDIARIES ATEMENTS OF CHANGES IN EQUITY nded 31 December 2019 and 2018 housands of New Taiwan Dollars) Equity Attributable to the Parent Company				Non- Controlling Interests Total Equity
	Capital		Additional Paid-in Capital		Retained earnings		Othe	r components of equity		Total
	Common stock	Certificates of Bond-to- Stock Conversion		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) on Equity Instruments Measured at Fair Value Through Other Comprehensive Income Gain (losses)	Unrealized Gain or Loss on Available- For-Sale Financial Assets
	$2,254,162	$ -	$830,265	$844,155	$181,024	$2,208,472 825	$(251,893)	$ - (120,557)	$18,452 (18,452)	$6,084,637 (138,184)	$211,619 $6,296,256 (138,184)
	2,254,162	-	830,265 (87)	844,155 122,647	181,024 52,417	2,209,297 (122,647) (52,417) (901,664) 1,413,477 454	(251,893) (81,194)	(120,557) 108,504	- -	5,946,453 - - (901,664) (87) 1,413,477 27,764	211,619 6,158,072 - - (901,664) (87) (41,948) 1,371,529 (2,681) 25,083
	-	-	-	-	-	1,413,931	(81,194)	108,504	-	1,441,241	(44,629) 1,396,612
	3,111	9,681	73,908			(3,207)		3,207		- 86,700	56,999 56,999 - 86,700
	$2,257,273	$9,681	$904,086	$966,802	$233,441	$2,543,293	$(333,087)	$(8,846)	$-	$6,572,643	$223,989 $6,796,632
	$2,257,273	$9,681	$904,086 (16,444) 1,742	$966,802 141,348	$233,441 108,492	$2,543,293 (141,348) (108,492) (1,026,622) 1,718,511 7,730	$(333,087) (189,831)	$(8,846) 50,541	$ -	$6,572,643 - - (1,026,622) (16,444) 1,742 1,718,511 (131,560)	$223,989 $6,796,632 - - (1,026,622) (16,444) 1,742 (40,660) 1,677,851 (4,637) (136,197)
	-	-	-	-	-	1,726,241	(189,831)	50,541	-	1,586,951	(45,297) 1,541,654
	67,964	(8,224)	339,397							399,137	101,114 101,114 399,137
	$2,325,237	$1,457	$1,228,781	$1,108,150	$341,933	$2,993,072	$(522,918)	$41,695	$-	$7,517,407	$279,806 $7,797,213
		(The accompanying notes are an integral part of th			e consolidated	financial statements)

2019 2018 Cash flows from operating activities: Net income before tax $2,169,163 $1,920,068 Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation 281,246 160,428 Amortization 52,122 45,134 Interest expense 48,969 43,371 Interest income (13,476) (11,454) Dividend income (29,438) (18,117) Share of profit of associates and joint ventures (83,796) (45,820) (Gain) Loss on disposal of property, plant and equipment (28,232) 4,626 Expected credit loss 669 1,061 Gain on disposal of investments (4,847) - Loss (Gain) of financial assets/liabilities at fair value through loss or profit 6,203 (83,677) Changes in operating assets and liabilities: Increase in notes receivable (361,883) (78,286) Decrease (increase) in accounts receivable 88,394 (1,041,908) Decrease (increase) in other receivables 44,407 (14,743) Increase in inventories, net (880,468) (835,660) Decrease (increase) in prepayments 31,399 (64,863) Decrease (increase) in other current assets 3,306 (9,244) Increase in other noncurrent assets (290,148) (157,011) (Decrease) increase in notes payable (21,581) 100,115 Increase in accounts payable 215,130 516,615 Increase in contract liabilities 636,318 328,405 Increase in other payables 156,312 92,187 Increase (decrease) in other current liabilities 182,003 (144,514) Decrease in accrued pension liabilities (2,415) (1,956) Cash generated from operations 2,199,357 704,757 Interest received 13,476 11,414 Dividends received 29,438 18,117 Interest paid (41,071) (35,669) Income tax paid (506,503) (355,029) Net cash provided by operating activities 1,694,697 343,590 (Expressed in Thousands of New Taiwan Dollars) (Continued) For the years ended 31 December English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended 31 December 2019 and 2018	2019 2018 Cash flows from operating activities: Net income before tax $2,169,163 $1,920,068 Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation 281,246 160,428 Amortization 52,122 45,134 Interest expense 48,969 43,371 Interest income (13,476) (11,454) Dividend income (29,438) (18,117) Share of profit of associates and joint ventures (83,796) (45,820) (Gain) Loss on disposal of property, plant and equipment (28,232) 4,626 Expected credit loss 669 1,061 Gain on disposal of investments (4,847) - Loss (Gain) of financial assets/liabilities at fair value through loss or profit 6,203 (83,677) Changes in operating assets and liabilities: Increase in notes receivable (361,883) (78,286) Decrease (increase) in accounts receivable 88,394 (1,041,908) Decrease (increase) in other receivables 44,407 (14,743) Increase in inventories, net (880,468) (835,660) Decrease (increase) in prepayments 31,399 (64,863) Decrease (increase) in other current assets 3,306 (9,244) Increase in other noncurrent assets (290,148) (157,011) (Decrease) increase in notes payable (21,581) 100,115 Increase in accounts payable 215,130 516,615 Increase in contract liabilities 636,318 328,405 Increase in other payables 156,312 92,187 Increase (decrease) in other current liabilities 182,003 (144,514) Decrease in accrued pension liabilities (2,415) (1,956) Cash generated from operations 2,199,357 704,757 Interest received 13,476 11,414 Dividends received 29,438 18,117 Interest paid (41,071) (35,669) Income tax paid (506,503) (355,029) Net cash provided by operating activities 1,694,697 343,590 (Expressed in Thousands of New Taiwan Dollars) (Continued) For the years ended 31 December English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended 31 December 2019 and 2018	2019 2018 Cash flows from operating activities: Net income before tax $2,169,163 $1,920,068 Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation 281,246 160,428 Amortization 52,122 45,134 Interest expense 48,969 43,371 Interest income (13,476) (11,454) Dividend income (29,438) (18,117) Share of profit of associates and joint ventures (83,796) (45,820) (Gain) Loss on disposal of property, plant and equipment (28,232) 4,626 Expected credit loss 669 1,061 Gain on disposal of investments (4,847) - Loss (Gain) of financial assets/liabilities at fair value through loss or profit 6,203 (83,677) Changes in operating assets and liabilities: Increase in notes receivable (361,883) (78,286) Decrease (increase) in accounts receivable 88,394 (1,041,908) Decrease (increase) in other receivables 44,407 (14,743) Increase in inventories, net (880,468) (835,660) Decrease (increase) in prepayments 31,399 (64,863) Decrease (increase) in other current assets 3,306 (9,244) Increase in other noncurrent assets (290,148) (157,011) (Decrease) increase in notes payable (21,581) 100,115 Increase in accounts payable 215,130 516,615 Increase in contract liabilities 636,318 328,405 Increase in other payables 156,312 92,187 Increase (decrease) in other current liabilities 182,003 (144,514) Decrease in accrued pension liabilities (2,415) (1,956) Cash generated from operations 2,199,357 704,757 Interest received 13,476 11,414 Dividends received 29,438 18,117 Interest paid (41,071) (35,669) Income tax paid (506,503) (355,029) Net cash provided by operating activities 1,694,697 343,590 (Expressed in Thousands of New Taiwan Dollars) (Continued) For the years ended 31 December English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended 31 December 2019 and 2018
	2019 $2,169,163 281,246 52,122 48,969 (13,476) (29,438) (83,796) (28,232) 669 (4,847) 6,203 (361,883) 88,394 44,407 (880,468) 31,399 3,306 (290,148) (21,581) 215,130 636,318 156,312 182,003 (2,415) 2,199,357 13,476 29,438 (41,071) (506,503) 1,694,697	2018
		$1,920,068 160,428 45,134 43,371 (11,454) (18,117) (45,820) 4,626 1,061 - (83,677) (78,286) (1,041,908) (14,743) (835,660) (64,863) (9,244) (157,011) 100,115 516,615 328,405 92,187 (144,514) (1,956)
		704,757
		11,414 18,117 (35,669) (355,029)
		343,590

23

English Translation of Consolidated Financial Statements Originally Issued in Chinese	English Translation of Consolidated Financial Statements Originally Issued in Chinese	English Translation of Consolidated Financial Statements Originally Issued in Chinese
SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued)
For the years ended 31 December 2019 and 2018
(Expressed in Thousands of New Taiwan Dollars)
	For the years ended 31 December
	2019		2018
Cash flows from investing activities:
Net cash outflow from acquisition of subsidiaries (Note 6(24))		$(24,019)	$ -
Acquisition of property, plant and equipment		(445,121)	(327,317)
Proceeds from disposal of property, plant and equipment		65,484	9,599
Decrease (Increase) in other intangible assets		3,219	(8,291)
Dividends received		52,708	45,602
Acquisition of financial assets at fair value through other comprehensive inco		-	(646)
Proceeds from disposal of financial assets at fair value through other comprehensive income		-	189,004
Decrease in financial assets at fair value through other comprehensive income		6,337	7,199
Proceeds from disposal of financial assets at fair value through profit or loss		4,476	10,762
Acquisition of financial assets at fair value through profit or loss		(9,503)	(75,572)
Acquisition of investments accounted for under the equity method		-	(1,230)
Decrease in investments accounted for under the equity method		8,400	17,600
Acquisition of non-controlling interests		-	(1,426)
Net cash used in investing activities		(338,019)	(134,716)
Cash flows from financing activities:
Increase in short-term loans		848,848	210,371
(Decrease) increase in long-term loanss (including current portion)		(9,175)	10,041
Cash dividends	(1,026,622)		(901,664)
Decrease in long-term deferred revenue		(371)	(377)
Cash payments for the principal portion of the lease liability		(66,305)	-
Decrease (increase) in deposits received		(13,428)	13,428
Increase in non-controlling interests		39,364	32,458
Net cash used in financing activities		(227,689)	(635,743)
Effect of exchange rate changes on cash and cash equivalents		(174,821)	(73,297)
Net increase (decrease) in cash and cash equivalents		954,168	(500,166)
Cash and cash equivalents at beginning of period	2,625,021		3,125,187
Cash and cash equivalents at end of period	$3,579,189		$2,625,021
(The accompanying notes are an integral part of the consolidated financial statements)

24

Appendix 4 Amendment to Articles of Incorporation

After	Before	Explanation
Article1 The Company carries out the following businesses…… (Xix) IG03010 energy Technical services. (Xx) F401010 international trade. (Xxi) CD01040 Motor Vehicles and Parts Manufacturing. (Xxii) CD01050 Bicycles and Parts Manufacturing. (Xxiii)ZZ99999 addition to licensing business, an operating non decree prohibitingor restrictingthe business.	Article 1 The Company carries out the following businesses…… (Xix) IG03010 energy Technical services. (Xx) F401010 international trade. (Xxi)ZZ99999 addition to licensing business, an operating non decree prohibiting or restricting the business.	In response to the needs of the business operations of the Company adding the business activities.
Article 36 These Articles of Incorporation are agreed to and signed on November 23, 1989 by all the promoters of the Corporation. The first Amendment was approved by the shareholders’ meeting on May 29, 1991. …… The twenty-fourth Amendment on June 8, 2018. The twenty-fifth Amendment on June 6, 2019. The twenty-sixth Amendment on June 12,	Article 36 These Articles of Incorporation are agreed to and signed on November 23, 1989 by all the promoters of the Corporation. The first Amendment was approved by the shareholders’ meeting on May 29, 1991. …… The twenty-fourth Amendment on June 8, 2018. The twenty-fifth Amendment on June 6, 2019.	According to the amendment day to amend.
2020.

25

Appendix 5 Shareholding of Directors and Independent Directors

SINBON Electronics Co., Ltd.

Shareholding of Directors and Independent Directors

                                                      Book closure date: April 14, 2020

Position	Name	Date elected	Shareholding while elected	Shareholding while elected	Shareholding while elected		Current shareholding	Current shareholding	Remarks
			Type	Shares	Shareholding ratio(%)	Type	Shares	Shareholding ratio(%)
Chairman	Wang, Shaw-Shing	Jun. 8, 2018	C	4,508,062	2.00%	C	7,508,062	3.23%
Director	Yeh, Hsin-Chih	Jun. 8, 2018	C	1,707,373	0.76%	C	1,707,373	0.73%
Director	Agrocy Research Inc. Rep: Wang, Zhao-Liang	Jun. 8, 2018	C	3,806,421	1.69%	C	3,806,421	1.64%
Director	Liang, Wei-Ming	Jun. 8, 2018	C	1,015,523	0.45%	C	1,015,523	0.44%
Director	Tai-Yi Investment Co., Ltd. Rep: Wang, Wei-Chung	Jun. 8, 2018	C	4,130,572	1.83%	C	4,130,572	1.78%
Director	Kuo-Shian Investment Co., Ltd. Rep: Wang, Kuo-Hong	Jun. 8, 2018	C	2,415,539	1.07%	C	2,415,539	1.04%
Director	Chiu ,Te-Cheng	Jun. 6, 2019	C	100,000	0.00%	C	100,000	0.04%
Director	Lin, Min-Cheng (resigned on January 7,2020)	Jun. 6, 2019	C	3,000	0.00%	C	0	0.00%
Independent Director	Wea, Chi-Lin	Jun. 8, 2018	C	0	0.00%	C	0	0.00%
Independent Director	Chang, Zheng-Yan	Jun. 8, 2018	C	0	0.00%	C	0	0.00%
Independent Director	Chen,Ho-Min	Jun. 6, 2019	C	0	0.00%	C	0	0.00%

Note 1: Total issued shares: 225,416,137 shares on Jun. 8, 2018 (date elected). Total issued shares: 229,078,860 shares on Jun. 6, 2019 (date elected) Note 2: Total Issued shares: 232,0669,364 shares on Apr. 14, 2020 (book closure date). Note 3: The minimum required combined shareholding of all directors by law:12,000,000 shares The combined shareholding of all directors on the book closure date: 20,683,490 shares

Note 4: The shares held by independent directors shall not be counted in the calculation of director shareholdings.

26