SINBON Electronics — Annual Report 2015

Jun 15, 2015

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Code: 3023

SINBON Electronics Co., LTD.

Annual Report 2014

Notice to readers

This English version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

SINBON annual report is available at website:
http://mops.twse.com.tw

Printed on 30 April 2015

1. Spokesperson and acting spokesperson

(1)Spokesperson
Name: Chi-Chou Chang
Title: Director
Phone: (02) 2698-9999
E-mail:matthew@sinbon.com

• (2) Acting spokesperson

Name: Shu-ming Chang
Title: Senior Administrator
Phone: (02) 2698-9999
E-mail:leochang@sinbon.com

2.Address and phone number of headquarters, branches, and factories
Headquarters: No. 582 Guohua Road, Miaoli City
Phone: (037) 330-099
Factory: No. 582 Guohua Road, Miaoli City
Phone: (037) 330-099
Office: 4F.-13, No.79, Sec. 1, Xintai 5th Rd., Xizhi Dist., New Taipei City
Phone: (02) 2698-9999

3. Stock transfer service

Name: Registrar Agency Department, Taishin Bank
Address: B1, No. 96, Section 1, Jianguo North Road, Taipei City.
Phone: (02) 2504-8125

4. Certifying CPA of last-year financial statements

CPA Firm: Ernst & Young Taiwan
CPA: Wen-pi Yan and Hong-kuang Lin
Address: 7F, No. 239, Minquan Road, Taichung City.
Phone: (04) 2305-5500
Website:http://www.ey.com/tw

5. Overseas listing: None

6. Corporate website: http://www.sinbon.com

Table of Contents

	Table of Contents
		Page
1.	Letter to Shareholders	1
	1.1. Business Performance 2014	2
	1.2. Summary of Business Plan 2015	3
	1.3. Future Development Strategy	3
	1.4. Effect of External Competitions, Legislation, and the Overall Business
	Environment
2.	Company Profile
	2.1. Establishment Date	4
	2.2. Milestones	4
3.	Corporate Governance
	3.1. Organization	5
	3.2. Information of Directors, Supervisors, President, Vice Presidents,
	Assistant Vice Presidents, and Department and Subsidiary Managers	7
	3.3. Remunerations Paid to Directors, President, and Vice Presidents Last	15
	Year
	3.4. Corporate Governance	20
	3.5. Accountant Service Fees	35
	3.6. CPA Change Information	36
	3.7. Disclose the name, title, and the period of service at the CPA firm or its
	affiliates if a director, the president, financial officer or accounting
	officer of this company has worked at the CPA firm or its affiliates in the
	last year.	36
	3.8. Share transfer and share mortgage of directors, supervisors, executives,
	and shareholders holding over 10% of shares in the last year and by the
	report publishing date.	36
	3.9. Information of Top Ten Shareholders Who Are Interested Parties,
	Spouse, Relatives within Second Degree	38
	3.10. Consolidated Percentage of Shares Held of Re-Invested Enterprises by
	the Company, Directors, Supervisors, Executives, or Enterprises under
	Direct/Indirect Control of the Company	39
4.	Fundraising
	4.1. Capital and Shares	41
	4.2. Corporate Bonds	46
	4.3. Issue of Preferred Shares	48
	4.4. Issue of GDR	48
	4.5. Issue of Certificates of Employee Stock Subscription	48
	4.6. Issue of Employee Restricted Shares	48
	4.7. Acquisition (including mergers, buyouts, and spin-offs)	48
	4.8. Items to be Disclosed in Capital Utilization Plans	48
5.	Operational Highlights
	5.1. Business Activities	49
	5.2. Market and Production-Sales	82
	5.3. Number, Average Service Length, Average Age, and Education

		Distribution of Employees in Last Two Years and by Report Publishing
		Date	86
	5.4.	Environmental Expenses	86
	5.5.	Labor-Management Relations	87
	5.6.	Material Contracts	89
6.	Financial Highlights
	6.1.	Condensed Balance Sheet, Integrated Income Statement, CPA Name	91
		and Comments
	6.2.	Financial Analysis of the Last Five Years	96
	6.3.	Supervisor or Auditor Audit Report of Financial Statements in the Last	98
		Year
	6.4.	Financial Statements in the Last Year (including CPA audit reports,
		cross-reference of balance sheets of two years, integrated income
		statements, equipment change list, case flows list, and remarks or	99
		tables)
	6.5.	The Company or Affiliates Has/Have Financial Difficulty in the Last Year
		and by Report Publishing Date, and Its Impact on Corporate Financial
		Status	205
7.	Review and Analysis of Financial Situation and Financial Performance and Risk
	Items
	7.1.	Financial Situation	206
	7.2.	Financial Performance	206
	7.3.	Cash Flows	207
	7.4.	Impact of Major Capital Expenses on Finance in Recent Years	207
	7.5.	Re-investment Policies and Major Causes of Profits or Losses in Recent
		Years, Improvement Plans, and Investment Plans in the Coming Year	207
	7.6.	Risk Items	208
	7.7.	Other Major Items	210
8.	Special Notes
	8.1.	Information of affiliates	211
	8.2.	Private placement of securities in the last year and by the report
		publishing date	218
	8.3.	Holding or settling corporate stocks in the last year and by the report
		publishing date	218
	8.4.	Other supplementations	218
9.	Incidents with significant impact on shareholder equities or market prices as
	specified in item 2 of paragraph 2 of Article 32 of the Securities and Exchange
	Act in the last year and by the report publishing date		218

1. Letter to Shareholders

1.1. Business Performance in 2014

• 1.1.1. Performance of business plan 2014

The business performance of SINBON Electronics in 2014 was as follows: consolidated revenue came in at NT$11,642,719,000, 10.30% up from 2013; consolidated gross profit rate was 22%, 1% up from 2013; consolidated net profit after tax at NT$774,947,000, plus the minority interest (the interest of other shareholders of re-invested enterprises with non-controlling ownership) was NT$18,805,000, the sum was NT$793,752,000, 19.67% up from 2013; and consolidated EPS after tax was NT$3.82, NT$0.62 up from 2013.

• 1.1.2. Budget execution

Compared to the business plan of 2014, revenue completion rate in 2014 was 98%, actual gross profit margin was 22%, equivalent to the planned gross profit margin; actual net operating income was NT$950,590,000, with the plan completion rate at 116%; and the actual net profit after tax was NT$793,752,000, with the plan completion rate at 106%. Revenue and profit completion was great.

• 1.1.3. Revenue and profitability analysis

profit completion was great. Revenue andprofitabilityanalysis
Item	2014	2013
Cash from operatingactivities(NT$1,000)	615,562	879,288
Cash from(used in)investingactivities(NT$1,000)	3,455	(6,101)
Cash used in financingactivities(NT$1,000)	(224,257)	(792,448)
Return on assets(%)	8.10	7.00
Return on equity (%)	15.92	13.88
Profit Before Tax to Capital Stock(%)	50.25	41.75
Profit Margin(%)	6.66	5.76
EPS(NT$)	3.82	3.20

Cash provided by operating activities was 29.99% less than in 2013 because the increases in both accounts receivable and inventory in 2014 were higher than that of 2013 and the increase in accounts payable was lower than that of 2013, thus reducing cash provided by operating activities. Variation of cash provided by investing activities in 2014 was 56.63% because of the settlement of available-for-sale financial assets. Cash used in operating activities was 71.70% less than in 2013 because of convertible bond offering at NT$300 million and increase in short-term loans in 2014.

• 1.1.4. Research and development

Before 2014, we have 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. In addition, we 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. In 2014 we invested a total of NT$351,754,000 on research and development, with 1.55% more than last year, to actively develop electronic parts and

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components for the Internet of Thing (IoT), robots, and smart home. At the 4 [th] board meeting of 2014, we even passed a cash capital increase at NT$150 million for DigiO2, a SINBON subsidiary, to develop telecare and OEM/ODM portable bio-electronic healthcare devices. It is estimated that we will invest at least NT$300 million each year or over 3% of revenue on research and development in the future.

• 1.2. Summary of Business Plan 2015

• 1.2.1. Business policy of 2014

• (1) R&D, integration, and manufacture of electronic parts and components, such as cable assembly and manufacture of PCDA, LED backlight modules, and wireless communication parts and components. In recent years, we have successfully entered the following fields: autotronics, electronic medical device parts and components, green energy, and industrial control electronics.

• (2) Distribution and trade of electronics-related parts and components, such as the connectors of HRS Japan, GPS modules, wireless antenna modules, driver ICs, and other strategic electronic parts and components.

• (3) Expansion of the scope of operations of electronic parts and components through strategic alliances and acquisitions, such as acquisition of T-CONN Precision and investment in Comtek Electronics to enter the connector manufacture field.

• (4) Provision of one-stop-service for total solutions: Apart from actively developing new products and providing total solutions, through organizational reform and IT system integration, we aim to integrate the resources of all re-invested enterprises to maximize their efficiency.

• 1.2.2. Major production-marketing policies:

• (1) Strategic alliance and acquisition

  • To deal with rapid industrial changes and achieve quick expansion through strategic alliances and acquisitions.

• (2) Continual performance improvement

  • Establish a full-functional performance assessment department for the organization to directly supervise the operating performance of all business units within the organization.

• (3) Development of niche products

  • Aiming to developing niche, high gross-profit products, we have successfully developed the oxygen sensor for car engines; aviation/ navigation/vehicular GPS parts and components; upper flammable limit (U.FL) cables for high-precision wireless communication; and high-end cables for electronic fetal movement counters, telecare platforms, portable physiological signal devices, X-ray machines, magnetic resonance imaging (MRI) machines, bone mineral density (BMD) testers, wind turbines, fuel dispenser, and CNC mills. We also actively engaged in the development of electronic parts and components for industrial controllers, industrial PCs, electronic medical devices, PV generators, and wind power generators.

• (4) Cultivation of the iMAGIC industries

To deal with industrial development trends, apart from reinforcing the development of cable and PCBA products for the Medical, Automotive, Green

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energy, Industrial application, and Communication (MAGIC) industries, we began developing electronic parts and components for automatic warehousing systems, robots, and smart grids for use on the IoT, so as to enter the special the electronic parts and components field.

1.3. Future Development Strategy

• 1.3.1. To continuously pursue high growth by extending the strategic matrix (old product new customer, new product current customer, new product new customer).

• 1.3.2. To establish a dedicated department—strategic planning & marketing division—under the group administration department to capture market movements and future development trends, so as to search for next-generation products.

• 1.3.3. Strategic alliance and acquisition: In recent years, we have been searching for strategic allies or partners through different channels.

• 1.4. Effect of external competitions, legislation, and the overall business environment

• Although the overall business environment began to recover slowly in 2014, thanks to successful organizational transformation, we successfully entered MAGIC industries to gradually transform from consumer products toward industrial application products. In addition to raising revenue by 10.30% higher than in 2013, it was the third year for our venue to surpass NT$10 billion, with net profit after tax growth by 19.67%. Looking into 2015, revenue will continue to increase when the business environment continue to recover and exchange rate is stabilized.

Lastly, we are grateful for the support and encouragement of all shareholders in the past, and we are looking forward to your comments and recommendations in the coming year. In 2015, we will uphold our operational belief to share increased profits with shareholders.

To the Shareholders’ Meeting of SINBON Electronics Co., Ltd.

Joseph Wang Chairman

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2. Company Profile

2.1. Establishment date: 6 December 1989

2.2. Milestones:

• 2.2.1. Acquisitions, re-investments, and restructure in recent years and by the end or reporting period.

• Mar 2014 The board passed an indirect cash capital increase of not more than US$3 million for re-invested enterprise “SINBON Electronics (Shenzhen) Co., Ltd.”.

• Apr 2014 The board passed an investment of not more than US$2.5 million for establishing the US subsidiary SINBON USA Corporation.

• Oct 2014 The board passed the cash capital increase at NT$150 million for subsidiary DigiO2.

• Mar 2015 The board passed the settlement of selling enterprise SINACT Electronics at US$400,000 and the investment of NT$60 million in Top Taiwan Biotechnology Venture Capital.

• 2.2.2. Mass transfer or replacement of shares of directors, supervisors, or shareholders holding over 10% of shares: On 14 October 2014 Chairman Joseph Wang granted 2,000,000 shares to his spouse.

• 2.2.3. Change of management power and business policy or significant change of the scope of business: None.

• 2.2.4. Other major events adequate to affect shareholders’ rights and benefits and their effect on the organization: On 13 March 2015 the board passed the distribution of cash dividends at NT$2.80/share and distribution of stock dividends for additional paid-in capital at NT$0.2/share. The proposal will be submitted to the shareholders’ meeting for recognition on 11 June 2015.

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3. Corporate Governance

3.1. Organization

3.1.1. Organizational structure of SINBIN

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Shareholders’ Meeting
Supervisors
Board of Directors
Wage Compensation
Audit Office
Committee
CEO
COO
Group Administration Division Business Units Financial Division
Department
IT Department Service Division
10 Business Units
Subsidiary Financial
Human Resources Department Administration Department Legal Affairs Department Development Department Marketing and Strategic Development & Manufacture Public Affairs Department
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3.1.2. Functions and duties of major departments

3.1.2. Functions and dutie	s of major departments
Department and Supervisor	Functions and Duties
Wage Compensation Committee Chairman: Independent Director Chi-lin Wei Committee member: Independent Director Pi-Hsia Hsu-Chung Committee member: Mu-xiao Liu independent individual.	(1) Regularly review the Articles of Organization of the Wage Compensation Committee and make suggestions for revision. (2) Establish and regularly review the annual and long-term performance indicators and remuneration policy, system, standard, and structure of directors, supervisors, and managers. (3) Regularly assess the achievement of performance indicators of directors, supervisors, and managers and establish the content and amount of remuneration for individual roles.
Audit Office Associate Manager Hui-jun Li (4 staffs)	(1) Audit the operation and implementation of all systems within the organization and submit a report periodically. (2) Audit re-invested enterprises of the organization.
CEO ConcurrentlytakingupbyChairman Joseph	Promote various policies and implement assignments assigned by the board and be accountable for the organization’s businessperformance.

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Department and Supervisor	Functions and Duties
Wang
COO President Wei-mingLiang	Administer product manufacture, sales, human resources, and R&D activities and establish strategic directions.
Business Units Concurrently taking up by President Wei-mingLiang	Manufacture, sales, distribution, technology improvement, and process improvement of various electronic parts and components and product R&D.
Development and Manufacture Service Division VP Chen-xingChen	Administer the organization’s R&D resources and develop new products and technologies.
Financial Division Director Chi-Chou Chang	(1) Take charge of accounting and cashier affairs. (2) Provide relevant units and higher management with relevant financial management information for the reference of decision making. (3) Direct organizational budgeting. (4) Operate and assess overseas re-invested enterprises. (5) Make financialplanningfor variousprojects.
Public Affairs Department Concurrently taking up by Director Chi-Chou Chang	Plan board meeting and shareholders’ meeting affairs, publish external information, and operate investor relations and serve as the investor contact window.
Group Administration Division VP Huang-ji Lin	Administer the organization’s human resources, administration, IT, legal affairs,and marketingand strategic development departments.
Human Resources Department Associate Director Cheng-ling Li	(1) Make and implement human resources planning. (2) Survey, plan, and implement organizational training needs. (3) Implement wage management.
Administration Department Associate Manager Kui-zhen Feng	(1) Implement personnel, general, and employee benefit affairs. (2) Coordinate,contact,and communicate with relevant departments.
IT Department Associate Director Jie-liang Chen	(1) Install, maintain, and manage IT equipment (hardware and software). (2) Promote computerization within the organization. (3) Provide IT management reports for individual departments.
Legal Affairs Department Associate Director Yun-ru Huang	(1) Plan and handle legal affairs. (2) Manage andprotect intellectualproperty.
Marketing and Strategic Development Department Director Li-li Huang	(1) Industry research and analysis. (2) Assess and research new business and products. (3) Make overall marketing planning.

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3.2. Information of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Department and Subsidiary Managers 3.2.1. Directors and Supervisors

Information of Directors and Supervisors (I)

								(by 13 April 2015)	(by 13 April 2015)	(by 13 April 2015)	(by 13 April 2015)
Title1	Nationality or Residency	Name	Elected (Inauguration) Date	Term (yrs.)	Initially Elected Date2	Shares Held When Elected/Inaugurated		Shares Currently Held		Shares Currently Held by Spouse/Minor Children		Shares Held Under Other’s Name		Major Experience (Education)3	Position(s) Concurrently Held in this and other Organizations	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.
						Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation ship
Chairman	ROC	Joseph Wang	15 Jun 2012	3	6 Dec 1989	6,625,023	3.66%	4,625,023	2.22%	2,029,295	0.98%	0	0%	EMBA, Fudan University. BA in Mathematics, Tamkang University. Sales Management, AMP of USA. Sales Manager, Kanagawa of Japan	4	N/A	N/A	N/A
Director	ROC	Xin-chi Yeh	15 Jun 2012	3	4 Nov 1997	2,154,160	1.19%	2,154,160	1.04%	73,522	0.04%	0	0%	EMBA, Fudan University. BS in Agricultural Machinery, National Taiwan University. President,T&B of USA.	5	N/A	N/A	N/A
Director	ROC	Cao-liang Wang, representativ e of Argosy Research Inc.	15 Jun 2012	3	16 May 1998	3,624,354	2.00%	3,624,354	1.74%	296,494 (Shares held by Cao-liang Wang)	0.14%	0	0%	BA in Power Mechanical Engineering, National Tsing Hua University. Chairman, Argosy Research Inc.	6	N/A	N/A	N/A
Director	ROC	Wei-ming Liang	15 Jun 2012	3	6 May 2005	768,228	0.42%	1,001,228	0.48%	0	0.00%	0	0%	IE & MBA, University of Iowa. BS in Industrial Engineering, Tunghai University. VP, Chief Land Electronic Co.,Ltd.	7	N/A	N/A	N/A
Director	ROC	Meng-ru Zheng	15 Jun 2012	3	10 Jun 2009	1,803,000	1.00%	1,813,000	0.87%	0	0%	0	0%	Bachelor (extension education), Dayeh University. President of a family business.	Chairman, Fuyu Investment. Chairman, Jincaiju Construction.	N/A	N/A	N/A
Independen	ROC	Chi-lin Wei	15 Jun 2012	3	9 Jun 2006	0	0%	0	0%	0	0%	0	0%	PhD in Economics,	8	N/A	N/A	N/A

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Title1	Nationality or Residency	Name	Elected (Inauguration) Date	Term (yrs.)	Initially Elected Date2	Shares Held When Elected/Inaugurated	Shares Held When Elected/Inaugurated	Shares Currently Held	Shares Currently Held	Shares Currently Held by Spouse/Minor Children	Shares Currently Held by Spouse/Minor Children	Shares Held Under Other’s Name	Shares Held Under Other’s Name	Major Experience (Education)3	Position(s) Concurrently Held in this and other Organizations	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.
						Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation ship
t director														Paris University. Chairman, Graduate Institute of International business, National Taiwan University. Secretary General, Executive Yuan. Chairman, Lank Bank of Taiwan. Minister, Research, Development and Evaluation Commission
Independen t director	ROC	Pi-Hsia Hsu-Chung	15 Jun 2012	3	18 Jun 2002	0	0%	0	0%	0	0%	0	0%	BA in Education, National Cheng Chi University. High school teacher. Chairperson, Cihsin Culture Development Association Legislator	Chief Consultant, Legislative Yuan	N/A	N/A	N/A
Supervisor	ROC	Min-zheng Lin	15 Jun 2012	3	12 Apr 2001	128,908	0.07%	189,908	0.09%	0	0%	0	0%	BA in Accounting, National Cheng Kung University Accountant, Liyu CPA Firm	Accountant, Liyu CPA Firm Director, Liyu Business Administration Consulting. Supervisor, LEDTECH Electronics. Supervisor, Argosy Technology,Inc.	N/A	N/A	N/A
Supervisor	ROC	Jun-xing Liang	15 Jun 2012	3	6 Dec 1989	1,559,494	0.86%	859,494	0.41%	0	0%	0	0%	MBA Program, National Cheng Chi University. BA in Economics, Tunghai University Sales Staff, AMP of USA	Independent Director, TaiSol Electronics. Member, Compensation Management Committee, TaiSol Electronics Director (entity representative), DigiO2.	N/A	N/A	N/A
Supervisor	ROC	AndyT.C.	15 Jun 2012	3	18 Jun	109,931	0.06%	189,931	0.09%	0	0%	0	0%	MBA,National Cheng	9	N/A	N/A	N/A

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Title1	Nationality or Residency	Name	Elected (Inauguration) Date	Term (yrs.)	Initially Elected Date2	Shares Held When Elected/Inaugurated	Shares Held When Elected/Inaugurated	Shares Currently Held	Shares Currently Held	Shares Currently Held by Spouse/Minor Children	Shares Currently Held by Spouse/Minor Children	Shares Held Under Other’s Name	Shares Held Under Other’s Name	Major Experience (Education)3	Position(s) Concurrently Held in this and other Organizations	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.
						Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation ship
		Chiu			2002									Chi University. President, Top Taiwan Investment & Development. President, Top Taiwan Venture Capital. President,Taiwan Life

• 1Corporate shareholders must list their name and representative (representatives of corporate shareholders must indicate the corporate shareholder they represent) and complete Table 1 below.

• 2Fill in the date of being a director or supervisor of the Company for the first time. Please also specify the interruption, if any.

• 3Please specify the title and duty for any past experiences related to the current position, such as working at the CPA firm auditing this report or an affiliate during the reporting period.

• 4Chairman of SINBON Beijing (representative of corporate shareholder), chairman of SINBON Hong Kong (representative of corporate shareholder), chairman of SINBON Shanghai (representative of corporate shareholder), chairman of SINBON Shenzhen (representative of corporate shareholder), chairman of SINBON Jiangyin (representative of corporate shareholder), chairman of Guanze, chairman of SINBON International (representative of corporate shareholder), chairman of SINBON Japan (representative of corporate shareholder), director of SAMOA Smart & Diligent Co., Ltd. (representative of corporate shareholder), supervisor of Argosy Technology (representative of corporate shareholder), chairman of Liandign Venture Capital (representative of corporate shareholder), chairman of Fuding Venture Capital (representative of corporate shareholder), director of Heding Venture Capital (representative of corporate shareholder), director of Huading International Venture Capital (representative of corporate shareholder), independent director of AOPEN Inc, director of SINACT (Hong Kong) International Co., Ltd. (representative of corporate shareholder), director of INPAQ Technology (representative of corporate shareholder), director of T-CONN Precision (representative of corporate shareholder), director of T-CONN Precision Zhongshan (representative of corporate shareholder), director of Super Elite Ltd. (representative of corporate shareholder), director of Super Progressive Ltd. (representative of corporate shareholder), chairman of Xinbang Material Technology(representative of corporate shareholder), director of COMTEK Electronics (representative of corporate shareholder), and director Beijing SINBON Electronics (representative of corporate shareholder).

• 5Director of SINBON Shenzhen (representative of corporate shareholder), director of Guanze (representative of corporate shareholder), director of Argosy Beijing (representative of corporate shareholder), chairman of T-CONN Precision (representative of corporate shareholder), chairman of T-CONN Precision Zhongshan (representative of corporate shareholder), and chairman of Super Elite Ltd. (representative of corporate shareholder).

• 6Chairman of Argosy Technology, chairman of Argosy Technology B.V., chairman of Argosy Technology, Inc., chairman of Global Saber Electronics Co., Ltd., chairman of Rotec Limited, supervisor of INPAQ Technology (representative of corporate shareholder), director of Fuding Venture Capital (representative of corporate shareholder), director of Yuanding Venture Capital (representative of corporate shareholder), and director of Huanyu Precision (representative of corporate shareholder).

• 7Director of Worldwide Wire Harnesses Ltd. (representative of corporate shareholder), chairman of SINACT Electronics (representative of corporate shareholder), chairman of SINBON Tongcheng (representative of corporate shareholder), chairman of DigiO2 International (representative of corporate shareholder), director of SINBON Jiangyin (representative of corporate shareholder), director of SINBON Hong Kong (representative of corporate shareholder), supervisor of SINBON Beijing (representative of corporate shareholder), director of SINBON Technologies (representative of corporate shareholder), director of SINBON Beijing (representative of corporate shareholder), director of SINBON Shenzhen (representative of corporate shareholder), and director of SINBON Shanghai (representative of corporate shareholder).

• 8Chairman of Chiding Venture Investment, independent director of Inventec Besta, independent director of Formosa Plastics, director of AcBel Polytech Inc, supervisor of ELAN Microelectronics, and chairman of Waterland Financial Holdings.

9Chairman and president of Top Taiwan, Jiuding, Heding, and Wending venture capitals and Top Taiwan Venture Investment Consulting; chairman and president of Liding, Lianding, Fuding, Chiding, Huading, and Yuanding venture investment; independent director of Silitech Technology, Chicony Power Technology, and Goldsun Group; representative of corporate director of Depo Auto Parts, Share Hope Medicine, Chia Chang , and AMICCOM Electronics; director of ELAN Microelectronics; and managing director of Taiwan Allied Container Terminal.

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Table 1: Major Shareholder of Corporate Shareholder

	(13 April 2015)
Name of Corporate Shareholder1	Major Shareholders of Corporate Shareholder2
	Guanze (17.40%), Cao-liang Wang (7.34%), Shu-zhen Chen (3.69%), SINBON Electronics
Argosy Research Inc.	(3.50%), Yi-ben Yuan (2.48%), Yuanding Venture Capital (1.99%), Xiu-xi Chen (1.47%),
	Sheng-wen Wang (1.36%), Hong-xun Yang (1.23%), and Xing-yi Liu(1.14%).

1 Directors and supervisors who are representatives of corporate shareholders must fill in the name of the corporate shareholders they represent in the table.

2 Fill in the major shareholders of that corporate shareholder (top ten shareholders) and their shares. If major shareholders are corporate shareholders, continue with Table 2.

Table 2: Major Shareholders of Major Corporate Shareholders in Table 1

(13 April 2015)

	(13 April 2015)
Name of Corporate Shareholder in Table 11	Major Shareholders of Corporate Shareholder2
Guanze Co., Ltd.	SINBON Electronics (100%)
SINBON Electronics Co., Ltd.	Fubon Life Insurance Co., Ltd. (6.64%), Joseph Wang (2.22%), Argosy Research (1.74%), Taiyi Venture Capital (1.70%), fiduciary account of the UBS (Lux) Equity SICAV– Emerging Markets at Dunbei Branch of Standard Chartered Bank (1.51%), trust account of Joseph Wang at Taishin Bank (1.44%), Guoxiang Investment (1.20%), Chen Pang Blind Industrial (1.10%), Xin-ci Yeh(1.04%), and Fubon Property & Casualty Insurance(0.99%).
Yuanding Venture Capital Corporation	Hontai Life Insurance (20.83%), Taiwan Life Insurance (19.92%), Shin Kong Life Insurance (16.67%), Farglory Life Insurance (4.17%), ELAN Microelectronics (4.17%), Shin Kong Insurance (4.17%), Guo-yi Yeh (4.17%), Ampire Co., Ltd. (3.33%), Taiwan Fire and Marine Insurance(3.33%) and Sheng-wei Yin(2.08%).

1 Fill in the corporation name for corporate shareholders in Table 1.

2 Fill in the major shareholders of that corporate shareholder (top ten shareholders) and their shares.

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Information of Directors and Supervisors (II)

Requirements Name1	Do independent directors have over 5 years of relevant experience and the following professional qualifications?	Do independent directors have over 5 years of relevant experience and the following professional qualifications?	Do independent directors have over 5 years of relevant experience and the following professional qualifications?	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Compliance with independency2	Concurrently serving as an independent director of other public companies.
	A faculty member of the discipline of commerce, law, finance, accounting, or other academic disciplines of a higher education establishment relating to the business of the Company	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialist who has passed a national examination and has been awarded a certificate in a profession required by the business of the Company	Have work experience in commerce, law, finance, or accounting, or otherwise required by the business of the Company	1	2	3	4	5	6	7	8	9	10
Joseph Wang	No	No	Yes				�	�	�	�	�	�	�	1
Xin-chi Yeh	No	No	Yes				�	�	�	�	�	�	�	0
Cao-liang Wang, representative of ArgosyResearch	No	No	Yes	�	�		�	�	�	�	�	�	�	0
Wei-mingLiang	No	No	Yes				�	�	�	�	�	�	�	0
Meng-ru Zheng	No	No	Yes	�	�		�	�	�	�	�	�	�	0
Chi-lin Wei	Yes	No	Yes	�	�	�	�	�	�	�	�	�	�	2
Pi-Hsia Hsu-Chung	No	No	Yes	�	�	�	�	�	�	�	�	�	�	0
Min-zhengLin	No	No	Yes	�	�	�	�	�	�	�	�	�	�	0
Jun-xingLiang	No	No	Yes	�	�	�	�	�	�	�	�	�	�	1
AndyT.C. Chiu	No	No	Yes	�	�	�	�	�	�	�	�	�	�	3

1Number of columns is subject to change as necessary.

• 2Please tick the corresponding items when directors and supervisors comply with the following conditions two years before being elected and during their term.

• (1) Not an employee of the Company or any of its affiliates.

• (2) Not a director or supervisor of the Company or any of its affiliates (except as an independent director of the Company, or its parent company, or its subsidiary where the Company holds, either directly or indirectly, over 50% of the voting shares).

• (3) Not an individual shareholder holding shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of shares issued by the Company or ranks as one of its top ten shareholders.

• (4) Not a spouse, relative within the second degree by consanguinity, or lineal relative within the third degree by consanguinity, of any of the above persons in the above three items.

• (5) Not a director, or supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of shares issued by the Company or ranks as one of its top five shareholders.

• (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the Company;

• (7) Not a professional or an owner, partner, director, supervisor, officer, or spouse of a sole proprietorship, partnership, company, or institution providing commercial, legal, financial, and accounting services or consultation to the Company or its affiliates; except for a member of the wage and compensation committee exercising powers with reference to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Compensation Committees of Companies whose Stock is Listed on the TWSE or Traded on the GTSM”.

• (8) Not a spouse or a relative within the second degree by affinity of a director of the Company.

• (9) No violation of any items specified in Article 30 of the Company Act.

• (10) Not a governmental, juridical person or its representative as specified in Article 27 of the Company Act.

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3.2.2. President, Vice Presidents, Assistant Vice Presidents, Department or Branch Officers

(13 April 2015)

Title1	Nationality	Name	Inaugural (elected) Date	Shares Held	Shares Held	Shares Currently Held by Spouse/ Minor Children	Shares Currently Held by Spouse/ Minor Children	Shares Held Under Other’s Name	Shares Held Under Other’s Name	Major Experience (Education)2	Position(s) Concurrently Held in Other Organizations	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.
				Shares	%	Shares	%	Shares	%			Title	Name	Relations hip
President	ROC	Wei-ming Liang	5 Jan 1998	1,001,228	0.48%	0	0%	0	0%	IE & MBA, University of Iowa. BS in Industrial Engineering, Tunghai University. VP,Chief Land Electronic Co.,Ltd.	3	N/A	N/A	N/A
Vice President	ROC	Huang-ji Lin	6 Aug 2001	134,907	0.06%	0	0%	0	0%	MS in Information Management, National Sun Yat Sen University BA in Management Science, National Chao Tung University. IT Director, Taiwan IC Packaging MIS Manager, Walton Advanced Engineering. System Manager, Jianyuan Plant, Philips Taiwan.	4	N/A	N/A	N/A
Vice President	ROC	Zhen-xing Chen	1 Aug 2014	0	0%	0	0%	0	0%	BS in Electronic Engineering, Tatung Institute of Technology. R&D Officer, Tatung Company. R&D Officer, IISI. R&D Officer,Tongya.	N/A	N/A	N/A	N/A
Director	ROC	Han Tao	1 Jun 1990	784,783	0.38%	537,126	0.26%	0	0%	MS in Industrial Engineering, Tunghai University. Engineer,Lucent Taiwan	N/A	N/A	N/A	N/A
Director	ROC	Ping LI	1 Oct 1996	96,379	0.05%	0	0%	0	0%	BA in Industrial Management, National Cheng Kung University. QC Manager,ChenfengMachinery	N/A	N/A	N/A	N/A
Director	ROC	Qi-zhong Chen	15 Aug 1997	44,793	0.02%	1,727	0%	0	0%	BA in English, Tamkang University.	5	N/A	N/A	N/A
Director	ROC	Wen-sen Huang	11 Feb 1998	217,611	0.10%	0	0%	0	0%	Dip. in Industrial Design, National Taipei Institute of Science and Technology. Marketing Chief, AMP MarketingManager,IR-TEC International.	N/A	N/A	N/A	N/A
Director	ROC	Hong-kai Luo	14 Jun 1999	0	0%	0	0%	0	0%	Dip in Mechanical Engineering, Long Hua Institute of Technology R&D Chief, Pan International R&D and Sales Manager, Tang R&D Manager,North Star.	N/A	N/A	N/A	N/A
Director	ROC	Jia-zhi Hsu	1 Nov 2000	31,838	0.02%	436	0%	0	0%	BS in Industrial Engineering and Management, National United University Sales Manager, Rui Zun Electronics.	N/A	N/A	N/A	N/A

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Title1	Nationality	Name	Inaugural (elected) Date	Shares Held	Shares Held	Shares Currently Held by Spouse/ Minor Children	Shares Currently Held by Spouse/ Minor Children	Shares Held Under Other’s Name	Shares Held Under Other’s Name	Major Experience (Education)2	Position(s) Concurrently Held in Other Organizations	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.
				Shares	%	Shares	%	Shares	%			Title	Name	Relations hip
Director	ROC	Jun-yu Chen	1 Oct 2000	55,371	0.03%	0	0%	0	0%	LLM, Law School, Fudan University. HR and Sales Manager, Tsankuen Shanghai. Director, Administration Division, Want Want Holdings Limited	N/A	N/A	N/A	N/A
Director	ROC	Li-hua Zhang	1 Oct 2001	1,049	0.00%	1,226	0%	0	0%	BA in Home Economics, Chinese Culture University Senior Secretary,AMP	N/A	N/A	N/A	N/A
Director	ROC	Li-li Huang	21 Apr 1997	23,539	0.01%	0	0%	0	0%	BA in International Trade, Chung Yuan Christian University. Product Manager, Marketing Department, AMP PR & Consumer Relations Staff, Kimberly-Clark Taiwan.	N/A	N/A	N/A	N/A
Financial/Ac counting Officer	ROC	Chi-Chou Chang	1 Octo 2000	209,705	0.10%	101,608	0.05%	0	0%	MBA, National Chung Hsing University BA in Accounting, Chung Yuan Christian University. Associate Manager,Diwan & Company	6	N/A	N/A	N/A
Director	ROC	Jun-qiang Wang	1 Oct 2014	130,000	0.06%	150,000	0.07%	0	0%	MBA, Rutgers University. BS in Industrial Engineering, Tunghai University. Capital Market Assistant Manager, Taiwan Securities	Director, SINBON Shenzhen Supervisor, Guanze. Supervisor, DigiO2.	N/A	N/A	N/A
Ass. Director	ROC	Cheng-ling Li	1 Sep 2014	0	0%	0	0%	0	0%	BA in Business Administration & Sociology, Tunghai University HR Manager, HONDA Taiwan HR Manager, Infineon Group Senior HR Manager,Foxconn Group	N/A	N/A	N/A	N/A
Ass. Director	ROC	Xiu-sui Lin	1 Sep 2014	28,949	0.01%	0	0%	0	0%	Ging Chung Business College Sales Officer, Connector BU, SINBON Taiwan.	N/A	N/A	N/A	N/A
Ass. Director	ROC	Zhi-xiang Zhang	1 Sep 2014	0	0%	0	0%	0	0%	BS in Aerospace Engineering, Tamkang University. Product Manager,Speed Tek.	N/A	N/A	N/A	N/A
Ass. Director	ROC	Jie-liang Chen	1 Sep 2014	200	0%	0	0%	0	0%	EMBA, National Chung Hsing University. Data Systems	N/A	N/A	N/A	N/A
Ass. Director	ROC	Yun-ru Huang	1 Sep 2014	0	0%	60	0%	0	0%	LLM, University of Southern California. LLB, National Taiwan University. Legal Affairs, AcBel. Legal Affairs, Lin & Chang International Law Offices	N/A	N/A	N/A	N/A
Ass. Director	ROC	Jin-ze Zheng	1 Sep 2014	0	0%	0	0%	0	0%	BA in Political Science, Soochow University. VP,KeyMouse Electronic	N/A	N/A	N/A	N/A
Ass. Director	ROC	Xin-chun Wu	1 Oct 2014	823	0%	0	0%	0	0%	7	N/A	N/A	N/A	N/A
Ass. Director	ROC	Bing-chen	1 Oct 2014	1,609	0%	0	0%	0	0%	PingTungCollege of Technology	N/A	N/A	N/A	N/A

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Title1	Nationality	Name	Inaugural (elected) Date	Shares Held	Shares Held	Shares Currently Held by Spouse/ Minor Children	Shares Currently Held by Spouse/ Minor Children	Shares Held Under Other’s Name	Shares Held Under Other’s Name	Major Experience (Education)2	Position(s) Concurrently Held in Other Organizations	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.	Spouse/2ndDegree Relatives Holding Manager Post of this Organization.
				Shares	%	Shares	%	Shares	%			Title	Name	Relations hip
		Song								Sales Manager,Wieson Technologies
Ass. Director	ROC	Hao-min Hsu	1 Oct 2014	75	0%	0	0%	0	0%	Department of Shipping and Transportation Management, National Taiwan Ocean University. Longwell Company FedEx Taiwan	N/A	N/A	N/A	N/A
Ass. Director	ROC	Kong-de Yang	1 Oct 2014	0	0%	0	0%	0	0%	College Plant Manager,Golden Bridge Electech	N/A	N/A	N/A	N/A

1The information of the president, vice presidents, assistant vice presidents, and department and branch officers and positions equivalent to a president, vice president, or assistant vice president, regardless of title, must be disclosed.

• 2Experience related to the current position. If the person has worked at the accountant’s firm where this report is certified or an affiliate of the Company, his title and duty must be specified.

• 3Director of Worldwide Wire Harnesses Ltd. (representative of corporate shareholder), director on of SINACT Electronics (representative of corporate shareholder), chairman of SINBON Tongcheng (representative of corporate shareholder), chairman of DigiO2 (representative of corporate shareholder), director of SINBON Jiangyin (representative of corporate shareholder), director of SINBON Hong Kong (representative of corporate shareholder), supervisor of SINBON Beijing (representative of corporate shareholder), director of SINBON Technologies (representative of corporate shareholder), director of SINBON Electronics Beijing (representative of corporate shareholder), director of SINBON Shenzhen (representative of corporate shareholder), and director of SINBON Shanghai (representative of corporate shareholder).

• 4Director of SINBON Hong Kong (representative of corporate shareholder), supervisor of SINBON Jiangyin (representative of corporate shareholder), supervisor of SINBON Tongcheng (representative of corporate shareholder), supervisor of SINACT Electronics (representative of corporate shareholder).

• 5Director of SINBON Tongcheng (representative of corporate shareholder), director of SINACT Electronics (representative of corporate shareholder), director of SINBON Jiangyin (representative of corporate shareholder), and supervisor of SINBON Electronics Beijing (representative of corporate shareholder).

• 6Director of SINBON Hong Kong (representative of corporate shareholder), supervisor of SINBON Shenzhen (representative of corporate shareholder), supervisor of SINBON Shanghai (representative of corporate shareholder), supervisor of DigiO2 (representative of corporate shareholder), director of Guan Ze (representative of corporate shareholder), director of SINACT Electronics (representative of corporate shareholder), supervisor of COMTEK Electronics Dongguan (representative of corporate shareholder), supervisor of T-CONN (representative of corporate shareholder), director of Super Elite Ltd. (representative of corporate shareholder), supervisor of SINBON Electronics Beijing (representative of corporate shareholder), director of SINBON Tongcheng (representative of corporate shareholder), director of SINBON Jiangyin (representative of corporate shareholder).

• 7Not provided.

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3.3. Remunerations Paid to Directors, President, and Vice Presidents Last Year

3.3.1. Directors (including independent directors)

(31 December 2013/NT$1,000)

Title	Name			Remuneration	Remuneration	paid to directors	paid to directors			Proportion of the sum of items A-D in net profit after tax11	Proportion of the sum of items A-D in net profit after tax11	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	Compensation earned bydirectors holdingconcurrentposts at	SINBON or affiliates	SINBON or affiliates	SINBON or affiliates	SINBON or affiliates	Proportion of the sum of items A-G in net profit after tax11	Proportion of the sum of items A-G in net profit after tax11	Compensation Paid to Directors from Non-consolidated Affiliates12
		Base Compensation (A)2		Severance Pay and Pensions (B)		Compensation to Directors (C)3		Allowances (D)4				Base Compensation, Bonuses, and Allowances (E)5		Severance Pay and Pensions (F)		Employee Profit Sharing (G)6				Exercisable Employee Stock Options (H)7		Granted Employee Restricted Stock (I)13
		From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON		From All Consolidated Entities8		From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8	From SINBON	From All Consolidated Entities8
																Cash	Stock (Fair Market Value)	Cash	Stock (Fair Market Value)
Chairman	Joseph Wang	0	0	0	0	8,500	8,500	340	340	1.11%	1.14%	5,445	9,001	0	0	5,500	0	5,500	0	0	0	0	0	2.49%	3.01%	N/A
Director	Wei-ming Liang
Director	Xin-chi Yeh
Director	Cao-liang Wang, representativ e of Argosy Research
Director	Meng-ru Zheng
Independen t Director	Chi-lin Wei
Independen t Director	Pi-Hsia Hsu-Chung

- 15 -

Remuneration Intervals

	Remuneration Intervals	Remuneration Intervals	Remuneration Intervals	Remuneration Intervals
Intervals of Remuneration Paid to Directors (NT$)	Director
	Sum of A+B+C+D		Sum of A+B+C+D+E+F+G
	From SINBON9	From All Consolidated Entities10 (I)	From SINBON9	From All Consolidated Entities10 (J)
Under 2,000,000	All directors	All directors	Xin-chi Yeh,; Cao-liang Wang, representative of Argosy Research; Meng-ru Zheng; Chi-lin Wei;Pi-Hsia Hsu-Chung	Xin-chi Yeh,; Cao-liang Wang, representative of Argosy Research; Meng-ru Zheng; Chi-lin Wei;Pi-Hsia Hsu-Chung
2,000,000(incl.)-5,000,000(excl.)			Wei-mingLiang	Wei-mingLiang
5,000,000(incl.)-10,000,000(excl.)			Joseph Wang	Joseph Wang
10,000,000(incl.)-15,000,000(excl.)
15,000,000(incl.)-30,000,000(excl.)
30,000,000(incl.)-50,000,000(excl.)
50,000,000(incl.)-100,000,000(excl.)
Over 100,000,000
Total	8,840,000	8,840,000	19,785,000	23,341,000

• 1The name of directors must be indicated individually (both the name of corporate shareholders and their representatives must be indicated). The

amount of remunerations must be expressed in sum. Directors concurrently taking the president or vice president posts must be specified in this table and the table below (3-1) or (3-2).

• 2This refers to the remuneration for directors in the last year (including base compensation, allowances, severance pay, bonuses, and rewards).

• 3This refers to the amount of compensations paid to directors approved by the board before profit allocation plan is approved by the shareholders’ meeting in the last year.

• 4This includes all kinds of allowances for directors in the last year (including travel expense, special disbursement, allowances, housing, company car, etc.). When housing, company car and other transportation or personal expense are provided, the nature and cost of such assets, the actual rent or rent calculated based on fair market price, gasoline reimbursement, and other payments must be disclosed. If drivers are assigned, please specify the wage for these drivers without combining with the compensation for directors.

• 5This includes all kinds of compensations for directors who are also employees (including president, vice presidents, and other managers and employees) in the last year, including salary, allowances, severance pay, bonuses, rewards, travel expense, special disbursement, subsidies, housing, company car, etc.). When housing, company car and other transportation or personal expense are provided, the nature and cost of such assets, the actual rent or rent calculated based on fair market price, gasoline reimbursement, and other payments must be disclosed. If drivers are assigned, please specify the wage for these drivers without combining with the compensation for directors.

• 6This refer to the employee profit sharing (including stock and cash) of directors who are also employees (including president, vice presidents, and other managers and employees) in the last year. The amount of employee profit sharing approved by the board before the allocation plan is approved by the shareholders’ meeting in the last year must be disclosed. If the amount cannot be estimated, calculate the planned amount for this year based on the actual amount distributed last year and fill out Table 1-3.

• 7It refers to the number of shares specified in the certificate of employee stock options (excluding the exercised section) for directors who are also employees by the report publishing date. In addition to this table, please also fill out Table 15.

• 8The total amount of all remunerations paid to directors by all consolidated entities (including SINBON).

• 9The name of directors must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each director by SINBON.

• 10The name of directors must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each director by all consolidated entities (including SINBON).

• 11This net profit after tax refers to the net profit after tax in the last year; or the net profit after tax of each entity or individual financial statements in the last year when IFRS is applied.

12

• a. This refers to the amount compensation paid to directors from non-consolidated affiliates.

• b. The amount of compensation paid to directors from non-consolidated affiliates must be included in the remuneration interval (J), and the column must be renamed as “all non-consolidated affiliates”.

c. Compensation refers to the remuneration, wage, employee profit sharing, and allowances paid by non-consolidated affiliates to directors who are also their directors, supervisors, or managers.

• 13This refers to the number of shares obtained by directors who are also employees (including president, vice presidents, and other managers and employees) from granted employee restricted stock by report publishing date. In addition to this table, please fill out Table 15-1.

*As the remuneration structure disclosed in this table is different from the concept specified in the Income Tax Act, information disclosed in this table is not intended for use in taxation.

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3.3.2. Remunerations Paid to Supervisors

								(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)
Title	Name	Remunerationpaid to supervisors						Proportion of the sum of items A-C in net profit after tax8		Compensation Paid to Supervisors from ~~N~~on-co~~n~~solidated Affiliates9
		Base Compensation (A)2		Compensation to Supervisor(B)3		Allowances (C)4
		From SINBON	From All Consolidated Entities5	From SINBON	From All Consolidated Entities5	From SINBON	From All Consolidated Entities5	From SINBON	From All Consolidated Entities5
Supervisor	Min-cheng Lin	0	0	1,000	1,000	40	40	0.13%	0.13%	N/A
Supervisor	Andy T.C. Chiu	0	0	1,000	1,000	30	30	0.13%	0.13%	N/A
Supervisor	Jun-xing Liang	106	106	1,000	1,000	40	40	0.14%	0.15%	N/A

• 1The name of supervisors must be indicated individually (both the name of corporate shareholders and their representatives must be indicated). The amount of remunerations must be expressed in sum.

• 2This refers to the remuneration for supervisors in the last year (including base compensation, allowances, severance pay, bonuses, and rewards).

• 3This refers to the amount of compensations paid to supervisors approved by the board before profit allocation plan is approved by the shareholders’ meeting in the last year.

• 4This includes all kinds of allowances for supervisors in the last year (including travel expense, special disbursement, allowances, housing, company car, etc.). When housing, company car and other transportation or personal expense are provided, the nature and cost of such assets, the actual rent or rent calculated based on fair market price, gasoline reimbursement, and other payments must be disclosed. If drivers are assigned, please specify the wage for these drivers without combining with the compensation for supervisors.

• 5The total amount of all remunerations paid to supervisors by all consolidated entities (including SINBON).

• 6The name of supervisors must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each director by SINBON.

• 7The name of supervisors must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each director by all consolidated entities (including SINBON).

• 8This net profit after tax refers to the net profit after tax in the last year; or the net profit after tax of each entity or individual financial statements in the last year when IFRS is applied.

9

• a. This refers to the amount compensation paid to supervisors from non-consolidated affiliates.

• b. The amount of compensation paid to supervisors from non-consolidated affiliates must be included in the remuneration interval (J), and the column must be renamed as “all non-consolidated affiliates”.

• c. Compensation refers to the remuneration, wage, employee profit sharing, and allowances paid by non-consolidated affiliates to supervisors who are also their directors, supervisors, or managers.

*As the remuneration structure disclosed in this table is different from the concept specified in the Income Tax Act, information disclosed in this table is not intended for use in taxation.

- 17 -

3.3.3. Remunerations Paid to President and Vice Presidents

								(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)
Title	Name	Base Compensation (A)2		Severance Pay and Pensions (B)		Bonuses, Special Disbursement, etc. (C)3		Employee Profit Sharing (D)4				Proportion of the sum of items A-D in net profit after tax9		Exercisable Employee Stock Options5		Granted Employee Restricted Stock11		Compensation Paid to Supervisors from Non-consolidated Affiliates10
		From SINBON	From All Consolidated Entities6	From SINBON	From All Consolidated Entities6	From SINBON	From All Consolidated Entities6	From SINBON		From All Consolidate d Entities5		From SINBON	From All Consolidated Entities6	From SINBON	From All Consolidated Entities6	From SINBON	From All Consolidated Entities6
								Cash	Stock (Fair Market Value)	Cash	Stock (Fair Market Value)
President	Wei-ming Liang	3,334	4,300	0	0	3,166	3,166	1,460	0	1,460	0	1.00%	1.15%	0	0	0	0	N/A
Vice President	Huang-ji Lin
	Zhen-xing Chen

*Regardless of titles, the remuneration for employees equivalent to a president or vice president (e.g. general manager, CEO, director, etc.) must be disclosed.

Remuneration Intervals

Intervals of Remuneration Paid to President and Vice Presidents (NT$)	Name of President and Vice Presidents	Name of President and Vice Presidents
	From SINBON7	From All Consolidated Entities8
Under 2,000,000	-	-
2,000,000 (incl.)-5,000,000 (excl.)	Wei-ming Liang; Huang-ji Lin;and Zhen-xingChen	Wei-ming Liang; Huang-ji Lin; and Zhen-xingChen
5,000,000(incl.)-10,000,000(excl.)	-	-
10,000,000(incl.)-15,000,000(excl.)	-	-
15,000,000(incl.)-30,000,000(excl.)	-	-
30,000,000(incl.)-50,000,000(excl.)	-	-
50,000,000(incl.)-100,000,000(excl.)	-	-
Over 100,000,000	-	-
Total	7,960,000	8,926,000
The name of presidents and vice presidents must be indicated individually. The amount of remunerations must be expressed in sum. Directors concurrently taking the president or vice president posts must be specified in this table and the above table. Fill in the base compensation, allowances, and severance pay of presidents and vice presidents in the last year. This includes all kinds of bonuses, monetary rewards, travel expense, special disbursement, allowances, housing, company car, and amount of other remunerations for presidents and vice presidents in the last year. When housing, company car and other transportation or personal expense are provided, the nature and cost of such assets, the actual rent or rent calculated based on fair market price, gasoline reimbursement, and other payments must be disclosed. If drivers are assigned, please specify the wage for these drivers without combining with the compensation for presidents and vice presidents. This refer to the amount of employee profit sharing (including stock and cash) for presidents and vice presidents in the last year approved by the board before the allocation plan is approved by the shareholders’ meeting. Also complete Table 1-3. The net profit after tax refers to the net profit after tax in the last year; or the net profit after tax of each entity or individual financial statements in the last year when IFRS is applied. It refers to the number of shares specified in the certificate of employee stock options (excluding the exercised section) for presidents and vice presidents by the report publishing date. In addition to this table, please also fill out Table 15. The total amount of all remunerations paid to presidents and vice presidents by all consolidated entities (including SINBON).

• 7The name of presidents and vice presidents must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each president and vice president by SINBON.

• 8The name of presidents and vice presidents must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each president and vice president by all consolidated entities (including SINBON).

9This net profit after tax refers to the net profit after tax in the last year; or the net profit after tax of each entity or individual financial statements in the last year when IFRS is applied.

10

• a. This refers to the amount compensation paid to presidents and vice presidents from non-consolidated affiliates.

• b. The amount of compensation paid to presidents and vice presidents from non-consolidated affiliates must be included in the remuneration interval (E), and the column must be renamed as “all non-consolidated affiliates”.

• c. Compensation refers to the remuneration, wage, employee profit sharing, and allowances paid by non-consolidated affiliates to presidents and vice presidents who are also their directors, supervisors, or managers.

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11This refers to the number of shares obtained by directors who are also employees (including president, vice presidents, and other managers and employees) from granted employee restricted stock by report publishing date. In addition to this table, please fill out Table 15-1.

*As the remuneration structure disclosed in this table is different from the concept specified in the Income Tax Act, information disclosed in this table is not intended for use in taxation.

Name of Executives Receiving Employee Profit Sharing and Status of Profit Allocation

				(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)	(31 December 2014/NT$1,000)
	Title1	Name1	Amount of Profit Sharingin Stock	Amount of Profit Sharingin Cash	Total	Proportion in Net Profit after Tax(%)
Executives	President	Wei-mingLiang	0	2,480	2,480	0.31%
	Vice President	Huang-ji Lin
	Vice President	Zhen-xingChen
	Director	Han Tao
	Director	PingLI
	Director	Qi-zhongChen
	Director	Hong-kai Luo
	Director	Wen-sen Huang
	Director	Jia-zhi Hsu
	Director	Jun-yu Chen
	Director	Li-li Huang
	Director	Li-hua Zhang
	Director	Jun-qiangWang
	Ass. Director	Cheng-lingLi
	Ass. Director	Xiu-sui Lin
	Ass. Director	Zhi-xiangZhang
	Ass. Director	Jie-liangChen
	Ass. Director	Yun-ru Huang
	Ass. Director	Jin-ze Zheng
	Ass. Director	Hao-min Hsu
	Ass. Director	Bing-chen Song
	Ass. Director	Xin-chun Wu
	CFO	Chi-Chou Chang

1 The name and title of executives must be indicated individually. The amount of employee profit sharing must be expressed in sum.

2 Fill in the amount of employee profit sharing (including stock and cash) for executives in the last year approved by the board before the allocation plan is approved by the shareholders’ meeting. If the amount cannot be estimated, calculate the planned amount for this year based on the actual amount distributed last year. The net profit after tax refers to the net profit after tax in the last year; or the net profit after tax of each entity or individual financial statements in the last year when IFRS is applied.

3 Referring to order in Letter Tai-Cai-Zi 0920001301 issued on 27 March 2003, the scope of executives (or managerial personnel) must cover:

a. President and its equivalent.

• b. Vice president and its equivalent.

c. Assistant vice president and its equivalent.

d. Financial department head.

• e. Accounting department head.

f. Other personnel entitled to administer organization affairs and make approvals with their signature.

4 Directors, presidents and vice presidents receiving employee profit sharing (including stock and cash) must be disclosed in both Tale 1-2 and this table.

• 3.3.4. Analysis of the proportion of the total amount of remunerations paid to directors, supervisors, presidents, and vice presidents by SINBON and all consolidated entities in last two years in net profit after tax; and the payment policy, standard, and combination of remunerations; procedure to remuneration determination; and their relevance to operational performance and future risk.

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(31 December 2014)

	(31 December 2014)	(31 December 2014)	(31 December 2014)	(31 December 2014)
Item	Proportion of Total Remuneration Amount in Net Profit after Tax(%)
	2013		2014
	SINBON	All Consolidated Entities	SINBON	All Consolidated Entities
Directors	2.81	3.60	2.49	3.01
Supervisors	0.44	0.47	0.40	0.41
Presidents and Vice Presidents	1.18	1.44	1.00	1.15
Note: Although the amount of remunerations in 2014 was higher than that of 2013, the percentage in net profit after tax remains the same.

• (1) Remunerations for directors and supervisors are calculated with reference to the organizational dividend policy and districted with approval of the shareholders’ meeting.

• (2) Remunerations for presidents and vice presidents are approved based on the organizational compensation system and performance evaluation.

3.4. Corporate Governance

3.4.1. Board Operation

Between March 2014 and April 2015, six (A) board meetings were held, and
director attendances are as follows:

Title	Name1	Actual Participation (Attendance)B	Agent Attendance	Actual Participation (Attendance) Rate (%) (B/A)2	Remarks
Chairman	Joseph Wang	6	0	100%
Director	Wei-mingLiang	5	1	83%
Director	Xin-chi Yeh	5	1	83%
Director	Cao-liang Wang, representative of ArgosyResearch Inc.	6	0	100%
Director	Meng-ru Zheng	6	0	100%
Independent Director	Chi-lin Wei	6	0	100%
Independent Director	Pi-Hsia Hsu-Chung	5	1	83%
Annotations (1) For items listed in Article 14-3 of the Securities and Exchange Act and board resolutions with dissenting opinion or qualified opinion expressed by independent directors and recorded in the minutes or in writing, specify the date and term of the board meeting and proposal content of corresponding board meetings, the opinion of all independent directors, and the management of their opinion: N/A. (2) For the recusal of proposals by directors for conflicts of interest, the name of directors, proposal content, reason for recusal, and voting status must be specified: When reviewing the list of independent directors at the 2ndboard meeting of 2015, Independent Director Chi-lin Wei was recused from the discussion and voting because he was one of the candidates. (3) Assessment of performance in improving board function and achieving relevant goals in this year and last year: The board procedural regulations have been established and implemented with reference to relevant regulations and two independent directors were established. In 2011, we established the Wage and Compensation Committee with reference to the regulations of competent authorities.

1 If directors and supervisors are entities, the name of corporate shareholders and their representative must be disclosed.

2

• (1) When directors or supervisors resign before the end of a fiscal year, the date of resignation must be specified in the Remarks, and their actual participation (attendance) rate (%) must be calculated with reference to their actual participation (attendance) frequency in the actual number of board meetings held during their term.

• (2) When there is a director or supervisor re-election before the end of a fiscal year, the current and past directors and supervisors must be disclosed, and their status (past, current, or re-elected) must be specified in the Remarks.

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Their actual participation (attendance) rate (%) must be calculated with reference to their actual participation (attendance) frequency in the actual number of board meetings held during their term.

3.4.2.Audit Committee Operation or Supervisor Participation in Board Operation:
SINBON adopted the supervisor system without establishing an audit committee.
Between March 2014 and April 2015, six (A) board meetings were held, and
supervisor attendances are as follows:

• Actual Attendance Actual Attendance

• Title Name Remarks (B) Rate (%) (B/A) (NB)

• Supervisor Min-cheng Lin 6 100% Supervisor Jun-xing Liang 6 100% Supervisor Andy T.C. Chiu 5 83% Annotations (1) Formation and duty of supervisors 1) Communication between supervisors and employees/shareholders: Supervisors have attended shareholders’ meetings over the years to communicate with and report to shareholders face to face. In addition, we have established the spokesperson and acting spokesperson mechanism to communicate with shareholders and investors. Internally, each department gathers the opinion and comments of employees and submits them to the board to forward to supervisors. After detecting problems in an internal audit, the chief auditor will voluntarily report them to supervisors and exchange opinion with them.

• 2) Communication between supervisors and chief auditor/CPA: Supervisors actively communicate organizational financial and sales situations with the chief auditor and CPA by phone, e-mail, or meeting. In addition, the chief auditor periodically submit the audit report to supervisors and CPA will send questionnaire to supervisors to implement two-way communication with supervisors.

• (2) If supervisors express opinion at a board meeting, specify the date and term of the board meeting, the proposal content, board resolutions, and the handling of opinion expressed by supervisors: At the first board meeting held in 2014, Supervisor Min-cheng Lin recommended the board report the details and amount of endorsements made by the Company at the next board meeting. The recommendation was included in the report for the next board meeting by the chairperson.

Notes

• (1) When supervisors resign before the end of a fiscal year, the date of resignation must be specified in the Remarks, and their actual attendance rate (%) must be calculated with reference to their actual attendance frequency in the actual number of board meetings held during their term.

• (2) When there is a supervisor re-election before the end of a fiscal year, the current and past supervisors must be disclosed, and their status (past, current, or re-elected) must be specified in the Remarks. Their actual attendance rate (%) must be calculated with reference to their actual attendance frequency in the actual number of board meetings held during their term.

3.4.3. Corporate Governance and Compliance with Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies (BPP)

Assessment Item			Status of Implementation1	Non-compliance with the BPP and reasons
	Yes	No.	Performance Summary
1. Does the Company establish and disclose a Corporate Governance Best-Practice Principles for TSEC/ GTSM Listed Companies with reference to the “BPP”?	�		The Company has established a Corporate Governance Best-Practice Principles for TSEC/ GTSM Listed Companies and disclosed it on the Market Observation Post System: http://mops.twse.com.tw/mops/web/t100sb04_1 .	No.
2. Shareholding structure & shareholders’ rights: (1) Does the Company establish and implement the internal operation procedures to handle shareholders’	� �		(1) The Company has established the spokesperson system to handle relevant affairs. (2) The Company maintains a list of major shareholders and their beneficial owners and has developed good investor relations with major shareholders.	No No

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Assessment Item			Status of Implementation1	Non-compliance with the BPP and reasons
	Yes	No.	Performance Summary
suggestions, concern, disputes and litigation matters? (2) Does the Company maintain a list of major shareholders and their beneficial owners? (3) Has the Company established and implemented a risk management system and “firewall” between the Company and its affiliates? (4) Has the Company established internal rules prohibiting insider trading on undisclosed information?	� �		(3) The Company has established the “Group Enterprise Management Regulations”, “Re-investment Management Regulations”, “Internal Control System”, “Internal Audit System”, and relevant laws and regulations to handle re-investments of the Company. (4) The Company has established the “Code of Business Ethics and Conduct” with reference to the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies to prohibit insider trading.	No No
3. Formation and responsibility of the board of directors: (1) Does the Company establish and implement diversified policies with reference to board formation? (2) After establishing the wage and compensation committee and audit committee by the law, does the Company voluntarily establish other functional committees? (3) Does the Company establish board performance evaluation regulations and methods to evaluate board performance every year? (4) Does the Company assess the independency of its CPAs?	� � �	�	(1) The Company has established two independent directors. Board members have been selected from qualified candidates by the chairperson with board authorization. (2) The Company does not establish any functional committees, except for the Wage and Compensation Committee. Functional committees will be established where necessary. (3) The chairman evaluates the performance of board members. Based on the Company’s business performance and articles of organization, the board proposes the remuneration for directors and supervisors for recognition by the shareholders’ meeting. (4) The Company assesses the independency of CPAs on a regular basis (once a year) with reference to Article 27 of the BPP and report the results to the board, and the last report was presented on 24 April 2015. The Company assesses the independency of CPA in terms of financial interests, financing and guaranty, business relations, family and individual relationship, employment relations, gift and special offers, CPA rotation and non-audit business. The Company has obtained the statement of independency issued by CPAs. So far, no incident or event affecting CPA independencyhas been detected.	No. No. No. No.
4. Does the Company establish mechanisms for communicating with stakeholders and a stakeholder site on the corporate website to appropriately respond to material CSR topics they concern about?	�		The Company has established the spokesperson system to handle relevant affairs. By the end of December in 2015, the Company will establish a stakeholder site on the corporate website.	No.
5. Does the Company assign professional registers to handle shareholder meetingaffairs?	�		The Company has assigned the Register Department of Taishin Commercial Bank as our register.	No.

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Assessment Item			Status of Implementation1	Non-compliance with the BPP and reasons
	Yes	No.	Performance Summary
6. Information disclosure (1) Has the Company established a website to disclose own financial and corporate governance information? (2) Does the Company disclose such information with other methods (e.g. English website, assigning a staff to gather and disclose relevant information, implementing the spokesperson system, and posting the conference call on the corporate website)?	� �		(1) The Company discloses relevant financial information and business information regularly and as necessary over the corporate website (www.sinbon.com) and MOPS(http://newmops.twse.com.tw ). (2) The Company has established the spokesperson system as required by authorities to handle relevant affairs and discloses material information over the Chinese and English versions of the corporate website at www.sinbon.com.	No. No.
7. Does the Company disclose other information for investors better understand its corporate governance practices (including but not limited to employee rights and benefits, employee care, investor relations, supplier relations, stakeholder rights and benefits, training for directors and supervisors, implementation of risk management policies and risk assessment standards, implementation of customer relations policies, and insurance for directors and supervisors)?	�		The Company has always been concerned about the rights and benefits of customers, suppliers, shareholders, and employees. Apart from implementing humanized management, we value work environment safety and health and has established the Employee Welfare Committee, arrange liability insurance for directors and supervisors, and establish the employee profit sharing system in our articles of incorporation. Apart from providing in-service corporate governance training for directors and supervisors at least three hours each year, we arrange 12 hours of corporate governance training for new directors and supervisors. The result of implementation is posted on the MOPS. Risk management policies and risk assessment are established and implemented with reference to the “Asset Acquisition and Settlement Management Regulations”, “Endorsement and Guaranty SOP”, “Code of Business Ethics”, “Board Procedural Standards”, and “Internal Material Information Processing SOP”. Investments with an amount of NT$300 million or paid-in capital over 20% are submitted to the board for resolution. The QA policy and customer rights and benefits protection are included in our ISO. Every year we arrange liability insurance for directors and supervisors as prescribed in the articles of incorporation.	No.
8. Does the Company implement self-evaluation of its corporate governance practices or appoint a third party to do so and maintain a report? (If yes, please specify the board opinion, self-evaluation or third-party evaluation results, major defects or recommendations and improvement.)2	�		The self-evaluation report of corporate governance practices is posted on the MOPS at http://mops.twse.com.tw/mops/web/t100sb10.	No.

1 Please describe the situation, either “yes” or “no” in the non-compliance column.

2 The self-evaluation report must contain the results of evaluation items for corporate governance practices, including the current condition of operation and implementation.

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3.4.4. Disclosure of the formation, responsibility, and operation of the Compensation Committee, if any.

(1)Members of the Wage and Compensation Committee

		(1) Members of the Wage and Co	(1) Members of the Wage and Co	(1) Members of the Wage and Co	mpensation Committee	mpensation Committee	mpensation Committee	mpensation Committee	mpensation Committee	mpensation Committee	mpensation Committee	mpensation Committee
Status1	Requirements Name	Do committee directors have over 5 years of relevant experience and the following professionalqualifications?			Compliance with Independency2								Also a compensation committee member of other public companies concurrently	Remarks3
		A faculty member of the discipline of commerce, law, finance, accounting, or other academic disciplines of a higher education establishment relating to the business of the Company	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialist who has passed a national examination and has been awarded a certificate in a profession required by the business of	Have work experience in commerce, law, finance, or accounting, or otherwise required by the business of the Company	1	2	3	4	5	6	7	8
Independent Director	Chi-lin Wei	Yes	No	Yes	�	�	�	�	�	�	�	�	6	-
Independent Director	Pi-Hsia Hsu-Chung	No	No	Yes	�	�	�	�	�	�	�	�	0	-
Director	Chao-liang Wang	No	No	Yes	�	�		�	�	�	�	�	0	Relieved on 19 March 2014 after the end of term
External individual	Mu-xiao Liu	No	No	Yes	�	�	�	�	�	�	�	�	0	Appointed on 21 March 2014

1 Please specify member status: director, independent director, or others.

• 2 Please tick the corresponding items when directors and supervisors comply with the following conditions two years before being elected and during their term.

• (1) Not an employee of the Company or any of its affiliates.

• (2) Not a director or supervisor of the Company or any of its affiliates (except as an independent director of the Company, or its parent company, or its subsidiary where the Company holds, either directly or indirectly, over 50% of the voting shares).

• (3) Not an individual shareholder holding shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of shares issued by the Company or ranks as one of its top ten shareholders.

• (4) Not a spouse, relative within the second degree by consanguinity, or lineal relative within the third degree by consanguinity, of any of the above persons in the above three items.

• (5) Not a director, or supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of shares issued by the Company or ranks as one of its top five shareholders.

• (6) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the Company;

• (7) Not a professional or an owner, partner, director, supervisor, officer, or spouse of a sole proprietorship, partnership, company, or institution providing commercial, legal, financial, and accounting services or consultation to the Company or its affiliates.

• (8) No violation of any items specified in Article 30 of the Company Act.

3 If a committee member is also a director of the Company, please specify compliance with paragraph 5 of Article 6 of the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter”.

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• (2) Operation of the Wage and Compensation Committee

• A. Committee members: 3.

• B. Current term: 24 August 2012 to 14 June 2015. By 13 March 2015, six committee meetings (A) were held, and the qualification and

attendance of committee members are as follows:

Title	Name	Actual Attendance(B)	Agent Attendance	Actual Attendance Rate(%) (B/A) (Note)	Remarks
Convener	Chi-lin Wei	6	0	100%
Committee Member	Pi-Hsia Hsu-Chung	6	0	100%
Committee Member	Chao-liang Wang	3	0	50%	An ordinary director taking up the role concurrently; relieved on 20 March 2014
Committee Member	Mu-xiao Liu	2	1	33.33%	Appointed on 21 March 2014
Annotations (1) If the board refuses or modifies the recommendation made by the committee, specify the date and term of the board meeting and proposal content, board resolution and handling of committee opinion (if the compensation approved by the board is better than the compensation recommended by the committee, specify the difference and causes): N/A. (2) When members disagree to or have reservations of a resolution made at the committee meeting with track records or written statements, specify the date and term of the committee meeting, proposal content, opinion of all members,and handlingof their opinion: N/A.

Note

(1) When committee members resign before the end of a fiscal year, the date of resignation must be specified in the Remarks, and their actual attendance rate (%) must be calculated with reference to their actual attendance frequency in the actual number of committee meetings held during their term.

(2) When there is a committee member re-election before the end of a fiscal year, the current and past committee members must be disclosed, and their status (past, current, or re-elected) must be specified in the Remarks. Their actual attendance rate (%) must be calculated with reference to their actual attendance frequency in the actual number of committee meetings held during their term.

3.4.5. CSR Performance

3.4.5. CSR Performanc	e	e
Assessment Item			Implementation1	Non-compliance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Yes	No	Performance Summary2
1. Corporate governance promotion (1) Does the Company establish a CSR policy or system and review the effectiveness of implementation? (2) Does the Company arrange CSR training on a regular basis? (3) Does the Company establish a dedicated (concurrent) unit to promote CSR with authorization from top management and to report the effectiveness of implementation to the board? (4) Does the Company establish a fair wage and compensation policy combing with the employee performance evaluation system and	� � � �		(1) The Company has established a Code of CSR Practice and has passed SA8000 social accountability certification and OHSAS18000 occupational safety and health certification. We also review the effectiveness of their implementation on a regular basis. (2) Units of the Group Administration Division arrange CSR-related training through division of labor. These units include the Administration, Marketing Planning, and Human Resource departments. (3) The Company reports the effectiveness and progress of CSR implementation to the board on a regular basis with reference to	No. No. No.

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Assessment Item			Implementation1	Non-compliance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Yes	No	Performance Summary2
CSR policy and an effective and well-defined reward and punishment system?			relevant regulations. (4) The wage and compensation policy of the Company: 1) wage resource planning based on cost efficiency and risk control; 2) wage resource allocation through performance differentiation; and 3) attraction, retention, and encouragement of key talents. Our employee performance evaluation system includes: closely link employee work targets with overall organizational targets to fulfill both long- and short-term organizational goals and provide a performance communication channel for fair and objective assessment of employee work performance and enable employees to make continual improvement; to provide a reference for employee development and transfer, promotion, and raise. Therefore, employees are evaluated at the end of each year. The reward and punishment system includes: To optimize operational management and maintain internal order to maintain the decent rights and benefits of the Company and employees. When employees violate any rules, they will be punished by a warning, minor demerit, major demerit, suspension, or dismissal, depending on the severity of offence. Employees with deeds will be rewarded by commendation, minor merit, and major merit to encourage them and make them an example for other employees.	No.
2. Development of a sustainable environment: (1) Does the Company make efforts to enhance resource efficiency and use recycled materials with lower environmental impact? (2) Does the Company establish an appropriate environmental management system (EMS) according to the characteristics of its industry? (3) Has the Company noticed the effect of climate change on its business activities and does it implement GHG inventory and establish an energy conservation and GHG reduction strategy?	� � �		(1) The Company sets RoHS, PFOA, PFOS as our production targets with reference to customer demand and international environmental trends. No product return due to RoHS issues was reported. (2) The Company establishes and implements the green product management system to control environmental-concerned chemical substances in the supply chain to reduce environmental and health risks. (3) The Company selects and uses eco-friendly materials. (4) The Company adopts the design for life-cycle extension policy. (5) The Company adopts power-saving design and uses green packaging. (6) The Company establishes the Green Committee to supervise the effectiveness of environmental policy implementation and implement the ISO14001 EMS(passed	No. No No.

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Assessment Item			Implementation1	Non-compliance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Yes	No	Performance Summary2
			certification in 2002). (7) In 2012, the Company passed ISO 14064-1 GHG inventory for enterprise certification, and we implement GHG inventory every year since then.
3. Implementation of philanthropy (1) Does the Company establishes relevant management policies and procedures with reference to relevant international regulations and international human rights treaties? (2) Does the Company establish mechanisms and channels for and properly handle employee grievances? (3) Does the Company provide employees with a safe and healthy work environment and regularly arrange safety and health training/education for employees? (4) Does the Company establish mechanisms for periodic employee communication and reasonably notify employees of significant operational changes that could substantially affect them? (5) Does the Company establish effective training plans for employees to develop employability? (6) Does the Company establish policies and procedures to protect consumer rights and benefits in R&D, procurement, production, operation, and service processes? (7) Does the Company follow relevant regulations and international standards to market and label products and services? (8) Does the Company assess if suppliers have a record of causing impacts on the environment and society? (9) When signing contracts with major suppliers, does the Company include the following terms in the contract: when suppliers violate the Company’s CSR policy and have significant impact on the environment and society, the Company may terminate or rescind the contract at any time? (10) Does the Company establish ESH standards and request suppliers to comply with such standards, so as to improve CSRperformance?	� � � � � � � � �		(1) The Company passed SA8000 social accountability certification in 2013 and voluntarily establishes our internal management policy and procedures with reference to the UN Global Compact. (2) The Company sets up the employee suggestion box and provide a hotline for general grievances and sexual harassment. (3) The Company passes GSV (Global Security Verification) and OHSAS 18000 occupational health and safety certification to implement organizational OHS management and ensure the security of employees and products. The Company also implements periodic inspection and maintenance of equipment and disaster prevention exercise, arranges health examinations for employees, and organizes ESH workshops. (4) The Company holds employee seminars regularly to discuss employee problems and make proper management afterwards. (5) In response to organizational strategic development goals and fulfill the work competency need of employees, the Company provides comprehensive learning methods and channels, such as internal training, external training, and annual learning subsidies. (6) The Company categorizes the problems reflected in customer complaints and take timely action to resolve them to regain customer satisfaction. (7) The Company markets and labels products with reference to relevant regulations and prohibits deception, misleading, fraud, and any conduct that can damage consumer trust and consumer rights and benefits. (8) 10 The Company has added contents (SA8000 and EICC) for implementing CSR in our procurement contracts. Before any business transactions, we request suppliers to sign the CSR compliance agreement and complete the self-evaluation sheet. We also implement on-site audit of suppliers to ensure CSR is implemented bysuppliers.	No. No. No. No. No. No. No. No.

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				Implementation1	Non-compliance with the
					Corporate Social
	Assessment Item	Yes	No	Performance Summary2	Responsibility Best Practice Principles for TWSE/GTSM
					Listed Companies and
					Reasons
4.	Reinforcement of disclosure of CSR
	information.	�		(1) The Company voluntarily discloses CSR	No.
	(1) Does the Company disclose relevant			information on the corporate website, and
	and reliable CSR information on the			“environmental sustainability, green
	corporate website and MOPS?			proclamation, and social commitment” are
				the three axes of implementation.
				(2) In the future, the Company will publish the
				CSR report to disclose our performance in
				CSR implementation.
5.	If the Company has established own code of	CSR practice with reference to the “Corporate Social Responsibility Best Practice
	Principles for TWSE/GTSM Listed Companies,” specify its operation and non-compliance with the best practice principles: No
	difference.

1. Other material information enabling a better understanding of CSR implementation:

2. (1) The Company implements CSR with reference to the four aspects: human rights, labor, environment, and anti-corruptions prescribed in The Ten Principles of UN Global Compact.

3. (2) The Company passed SA8000 social accountability certification at the end of 2013 and obtained the certificate in 2014.

4. (3) In recent years, the Company has been devoted to green product design and development. The Company also establishes the green committee to supervise the effectiveness of environmental policy implementation and implement energy conservation and emission reduction through four aspects: green building, green procurement, green production, and green product. The Company has developed the Go Green employee green education platform and combined with the CSP employee creative idea activity to recognize green experts and reward green innovation proposals, so as to implement environmental sustainability through planning and real action.

5. If the organizational CSR report has passed the verification standards of relevant certification authorities, please specify:

6. (1) Quality management systems: ISO 9001, ISO 14001, ISO 13485, UL Wiring Harness, Medical Device Good Manufacture Practice (GMP), and TS16949.

7. (2) Other systems: SA8000 social accountability system, GSV, OHSAS18000, and ISO 14064-1.

   • 1 Please describe the situation, either “yes” or “no” in the non-compliance column.

   • 2 If the Company has published a CSR report, please indicate the correspondence with the CSR report instead.

3.4.6. Performance in Fair and Ethical Business Operations and Measures

Fair and Ethical Business Operations

Assessment Item	Implementation1	Implementation1	Implementation1	Non-compliance with Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Yes	No	Performance Summary
1. Policies and plans for fair and ethical business operations (1) Does the Company specify its policies and practices to maintain fair and ethical business operations in relevant regulations and external documents? Do the board and management actively implement the commitments made in relevant policies? (2) Does the Company draw up programs to prevent unethical conduct and set out in each program and implement SOPs,	� � �		(1) The Company has established and implemented the “Code of Business Ethics” and “Fair and Ethical Operations SOP and Conduct Guidelines”. (2) The Company includes the above code, SOP, and conduct guidelines in annual training/education courses. (3) Internal audits are included in the annual audit program to audit the effectiveness of implementation of relevant policies and practices regularlyand irregularly.	No. No.

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conduct guidelines, penalties for violation, and a grievance system? (3) Does the Company take precautionary action to prevent business activities specified in paragraph 2 of Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and other business activities within its scope of business with higher behavioral risk?				No.
2. Implementation of fair and ethical business operations (1) Does the Company assess if trading counterparts are involved in any unfair and unethical business operations and include the fair and ethical business operations clause in the transaction agreement signed with them? (2) Does the Company establish a dedicated (concurrent) unit directly under the board to promote fair and ethical business operations and report the effectiveness of implementation directly to the board? (3) Does the Company establish and implement policies to prevent conflicts of interest and provide appropriate channels for reporting such conflicts? (4) Has the Company established effective accounting and internal control systems to implement fair and ethical business operations? Does the Company have these system audited regularly by the internal audit unit or a CPA? (5) Does the Company arrange regular internal/external training/ education for fair and ethical business operations?	� � � � �		(1) The fair and ethical business operations clause is included in our standard contracts. (2) The “Group Administration Division” is the responsible unit and will report to the board any violation from time to time. The internal audit unit also reports to the board regularly and where necessary. (3) The Company has established complaint channels and the suggestion box responsible by the “Administration Department”. (4) These systems are established and audited with reference to theEthical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, Code of Business Ethics and Fair and Ethical Operations SOP and Conduct Guidelines. (5) The board of the Company arranges the report on the Code of Business Ethics and include it in the training/ education for new employees.	No. No. No. No. No.
3. Operation of the whistleblower system (1) Has the Company established a practical whistleblower and reward system and channels to facilitate reporting of unfair and unethical business operations and assign appropriate personnel to handle a reported	� �		(1) The Company establishes a hotline and a dedicated e-mail for suppliers and customers to report unfair/ unethical business operations, and the audit office will handle all relevant reports. (2) The Company has establishes the Informer Rights and Benefits	No. No.

- 29 -

case? (2) Does the Company establish a SOP and a non-disclosure mechanism of relevant investigations? (3) Does the Company establish and implement an informer protection policy to ensure no informer will receive indecent treatment?	�		Protection Policy. (3) This protection policy includes non-disclosure of information sources, investigation by a third-party unit, and the signing of a non-disclosure agreement among all parties involved.	No.
4. Reinforcement of information disclosure (1) Does the Company disclose the content and effectiveness of implementation of the Code of Business Ethics on the corporate website and MOPS?	�		(1) Our corporate website: www.sinbon.com. (2) MOPS website2. (3) In 2014 no punishment for violation of fair and ethical business operations was reported.	No.
5. If the Company has established own code of business ethics with reference to the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies,” specify its operation and non-compliance with the best practice principles: No difference.
6. Other material information enabling a better understanding of fair and ethical business operations (such as review and revise the code of business ethics): The board arranges a report on the code of business ethics every year and included and includes it in the training/education for new employees andperiodic internal audit.

• 1 Please describe the situation, either “yes” or “no” in the non-compliance column.

2http://mops.twse.com.tw/mops/web/t100sb04_1 (market type: listed, search by stock number “3023” or by company name “SINBON”).

• 3.4.7. Search for code of corporate governance and relevant information: http://mops.twse.com.tw/mops/web/t100sb04_1 (market type: listed, search by stock number “3023” or by company name “SINBON”).

• 3.4.8. Other material information enabling a better understanding of corporate governance: See the corporate website of the Company.

• 3.4.9. Items to be disclosed to support the effectiveness of internal control:

- 30 -

(1) Statement of Internal Control

Statement of Compliance of Internal Control System

(13 March 2015)

The results of the self-inspection of the internal control system of the Company in 2014 are
as follows:

1. We understand it is the responsibility for the board of directors and executives of the Company to establish, implement, and maintain an internal audit system, and we have established, implemented and maintained this system. This system aims to appropriately ensure the effectiveness and efficiency of organizational operations (including profit, performance, and protection of asset security), the reliability of financial statements, and the compliance with relevant legal requirements.

2. Given all internal controls have own limitations, regardless of how well a system is designed, even an effectively implemented internal control system can only appropriately ensure the achievement of the above three goals. In addition, system effectiveness is subject to change in line with changes in the environment and different scenarios. Thanks to the self-supervisory mechanism included in our internal control system, corrections are made immediately after a defect is detected.

3. We judge the effectiveness of design and implementation of our internal control system with reference to the effectiveness judgment criteria specified in the Regulations Governing Establishment of Internal Control Systems by Public Companies (System Establishment Regulations) / Criteria for Establishment of Internal Control Systems by Public Companies. Based on the process of management control, the System Establishment Regulations divided an internal control system into five componential elements: (1) control environment; (2) risk assessment; (3) control; (4) information and communication; and (5) supervision, and each item contains different items. Please refer to the System Establishment Regulations for details.

4. We have examined the effectiveness of design and implementation of our internal control system with reference to the above criteria.

5. Referring to the above inspection results, we ascertain that as of 31 December 2014 the design and implementation of our internal control system (including supervision and management of subsidiaries), covering the revelation of the level of achievement of operational effectiveness and efficiency, reliability of financial statements, and compliance with relevant legal requirements, are effective and can appropriately achieve the said goals.

6. This statement will form part of the annual report and prospectus of the Company and will be disclosed to the public. If the information disclosed is untrue or incomplete, this will involve the liability specified in Articles 20, 32, 171, and 174 of the Securities and Exchange Act.

7. This statement was approved unanimously at the board meeting held on 13 March 2015.

SINBON Electronics Co., Ltd.

Joseph Wang
Chairman

Wei-ming Liang
President

- 31 -

• (2) The CPA audit review must be disclosed as the internal control system is audited by a CPA: N/A.

• 3.4.10. Punishment of the Company and employees by the law, punishment of employees by the Company for violation of internal control system regulations, and major defects and improvement in the last year and by the report publishing date: None.

• 3.4.11. Major resolutions made at the shareholders’ meeting and board meeting in the last year and by the report publishing date:

March 2014 Board Passed the consolidated financial statement and individual
Meeting financial statements of 2013.
Passed the Statement of Compliance of Internal Control System
Compliance of 2013
Passed the Business Plan 2014.
Passed the appointment of Mr. Mu-xiao Liu as a member of the
Wage and Compensation Committee.
Passed the CAP change proposal.
Passed the partial revision of the “Asset Acquisition and
Settlement SOP”.
Passed the indirect capital increase project at US$3 million for
re-invested enterprise “SINBON Shenzhen”.
Passed the back recognition of the investment settlement
project of INPAQ Technology.
Passed the plan for domestic issue of unsecured convertible
bonds for the fifth time at NT$300,000,000.
Passed the agenda and relevant affairs of the annual
shareholders’ meeting of 2014.
Passed the renewal of the integrated loan credit line at
Taichung Branch of Bangkok Bank.
Passed the renewal of the loan credit line at HSBC Bank
(Taiwan) Limited.
Passed the renewal of the loan credit line at Far Eastern
International Bank.
Passed the renewal of the loan credit line and financial product
trading credit line at Ta Chong Bank.
Passed the renewal of the loan credit line at First Bank.
Passed the renewal of the loan credit line at Chang Hua Bank.
Passed the addition of the integrated loan credit line at ANZ
Bank (Taiwan) Limited.

Passed the addition of the loan credit line at Shanghai Branch
of Land Bank of Taiwan.
Apr 2014 Board Passed the consolidated financial statement of Q1 2014.
Meeting Review of shareholders’ meeting proposals: No proposal.
Passed the profit allocation plan of 2013.
Passed the cash distribution of additional paid-in capital.

- 32 -

		Passed the renewal of the integrated loan credit line at Bank
		SinoPac.
		Passed the addition of loan credit line at HSBC Bank (Taiwan)
		Limited.
		Passed the addition of integrated loan credit line at Hsinchu
		Branch of the Export-Import Bank of the Republic of China.
		Passed the investment project for the US subsidiary SINBON
		USA Corporation.
Jun 2014	Shareholder’	Recognized the financial statement and consolidated financial
	Meeting	statement of 2013.
		Implementation: Announced as required.
		Recognized the profit allocation plan of 2013.
		Implementation: Record date was 27 August 2014, distribution
		was completed on 19 September 2014.
		Passed the partial revision of the “Asset Acquisition and
		Settlement SOP”.
		Implementation: Announced and revision completed.
		Passed the cash distribution of additional paid-in capital.
		Implementation: Record date was 27 August 2014, distribution
		was completed on 19 September 2014.
Jul 2014	Board	Passed the consolidated financial statement of Q2 2014.
	Meeting	Passed the ex-dividend affairs for 2014.
		Passed the renewal of the loan and transaction credit lines at
		Taipei-Fubon Bank.
		Passed the renewal of the loan credit line at HSBC (Taiwan)
		Limited.
		Passed the promotion of RD Director Zhen-xing Chen to be a
		VP.
Oct 2014	Board	Passed the consolidated financial statement of Q3 2014.
	Meeting	Passed the annual audit plan for 2015.
		Passed the partial revision of the Internal Control System
		Management Regulations and Internal Audit Management
		Regulations.
		Passed the capital increase project for DigiO2 International.
		Passed the organizational wage structure standard.
		Passed the renewal of the loan credit line at DBS Bank (Taiwan)
		Ltd.
		Passed the renewal of the integrated loan credit line at Mizuho
		Bank, Ltd. Taiwan.
		Passed the renewal of the short-term loan credit line at Land
		Bank of Taiwan.
		Passed the renewal of the integrated loan credit line at
		Taichung Branch of Bangkok Bank.
		Passed the renewal of the integrated loan and derivatives credit
		lines at Taihsin Bank.
		Passed the renewal of the integrated loan credit line at Mega
		Bank.

- 33 -

Mar 2015 Board Passed the consolidated financial statement and individual
Meeting financial statements of 2014.
Passed the profit allocation plan of 2014.
Passed the issue of new shares by transferring additional
paid-in capital to capital increase.
Passed the Statement of Compliance of Internal Control System
Compliance of 2014.
Passed the Business Plan 2015.
Passed the partial revision of the “Code of Corporate
Governance Practice”.
Passed the partial revision of the “Code of Business Ethics”.
Passed the director and supervisor re-election.
Passed the relief of the non-competition restriction for new
directors and their representatives.
Passed the agenda and relevant affairs of the annual
shareholders’ meeting of 2014.
Passed the renewal of the load credit line at Shanghai Branch of
Land Bank of Taiwan.
Passed the renewal of the credit line at DBS Bank (China)
Limited.
Passed the renewal of the integrated loan and derivatives credit
lines at Ta Chong Bank.
Passed the settlement of re-investments in SINACT Electronics.
Passed the investment in Top Taiwan Biotechnology Venture
Capital.
Apr 2015 Board Passed the consolidated financial statement of Q1 2015.
Meeting Review of shareholders’ meeting proposals and the
qualification of independent director candidates: Announced.
Passed the partial revision of the “Articles of Incorporation”.
Determined the share renewal base date for the issue of
unsecured convertible bonds for the fifth time.
Reviewed the assessment results of CPA independency:
Complied.
Passed the establishment of the “Code of CSR Practice”.
Passed the renewal of the loan credit line at Far Eastern
International Bank.
Passed the addition of the integrated loan credit line at ANZ
Bank (Taiwan) Limited.
Passed the renewal of the integrated loan credit line at Bank
SinoPac.

• 3.4.12. Summary of opinion difference in major resolutions at the board meeting between directors or supervisors in the last year and by the report publishing date with written records or statements: None.

• 3.4.13. Resignation and relief of relevant roles (including the organization chairman, president, accounting officer, financial officer, chief internal auditor, and R&D officer) in the last year and by the report publishing date:

- 34 -

Summary of Resignation or Relief of Relevant Roles

(by 30 April 2015)

		(by 30	April 2015)
Title	Name	Inaugural Date	Relief Date	Reasons for Resignation or Relief
N/A

Note: Relevant roles refer to organization chairman, president, accounting officer, financial officer, chief internal auditor, and R&D officer.

3.5. Accountant Service Fees:

• 3.5.1. Disclose the amount of the audit and non-audit service fees and content of non-audit services when the amount of non-audit service fees paid to CPAs, their firms and affiliates for is over a quarter of the audit service fees: The amount of the audit and non-audit service fees and content of non-audit services of the Company are disclosed as follows:

(unit: NY$1,000)

Company are disclosed as follows:		(unit: NY$1,000
CPA Firm	Ernst & Young Taiwan
Name of CPA (1)	Wen-bi Yan
Name of CPA (2)	Hong-guang Lin
Audit Service Fee	5,150
Non-audit Service Fee	System Design	0
	Factory Registration	0
	Human Resources	0
	Others2	0
	Subtotal	0
Does the audit period covers an entire accounting year?	Coverage	Yes
	Audit period	2014

• 3.5.2. Disclose the amount and proportion reduced and reasons when there is a change of CPA firm that the audit service fee is lower than the year before the CPA change: None.

• 3.5.3. Disclose the amount and proportion reduced and reasons when the audit service fee is fifteen percent less than last year: None.

CPA Service Fee Interval

	CPA Service Fee Interval	CPA Service Fee Interval
CPA Firm	Name of CPAs		Audit Period	Remarks
Ernst & Young Taiwan	Wen-bi Yan	Hong-guang Lin	2014	-

Note: If there is a CPA or CPA firm change in this year, please specify their audit periods and remark the reasons for change.

				(unit: NT$1,000
Service Fee Internal		Audit Service Fee	Non-Audit Service Fee	Total
1	Under 2,000
2	2,000(incl.)-4,000
3	4,000(incl.)-6,000	5,150	0	5,150

- 35 -

6,000(incl.)-8,000
8,000(incl.)-10,000
10,000 and over

CPA Service Fee

(unit: NT$1,000)

CPA Firm	CPAs	Audit Service		Non-Audit Service	Non-Audit Service	Non-Audit Service		Audit Period	Remarks
			System Design3	Factory Registration	Human Resources	Others2	Subtotal
Ernst & Young Taiwan	Wen-bi Yan	N/A	N/A	N/A	N/A	N/A	N/A	2014	-
	Hong-guang Lin							2014

1 If there is a CPA or CPA firm change in this year, please specify their audit periods, remark the reasons for change, and disclose the amount of audit and non-audit service fees and the content of non-audit services in order.

2 List all non-audit service items; if the amount of “others” shares 25% of all non-audit service fee, specify them in the Remarks.

3 The system design service fee refers the non-audit service fee for changing to IFRSs.

3.6. CPA Change Information

3.6.1. Information of Previous CPAs

Date of change	N/A	N/A	N/A	N/A	N/A
Reasons for change	N/A
Reasons for termination or rejection of assignment of the client or CPA.	PartyInvolved			CPA	Client
	Voluntarytermination of assignment			N/A	N/A
	Rejection of assignment			N/A	N/A
Comments and reasons for issuing audit reports without comments in last twoyears.	N/A
Different opinion with report issuer.	Yes	N/A	Accounting principles orpractices
		N/A	Financial statement disclosures
		N/A	Audit range orprocedures
		N/A	Others
	No	N/A
	Reasons: N/A
Other disclosures	N/A

3.6.2. Information Succession CPAs

3.6.2. Information Succession CPAs
CPA Firm	N/A
CPA	N/A
Assignment date	N/A
Consultation of possible certification comments and outcomes of the accounting methods or accounting principles and financial statements for specific transactions before assignment	N/A
Written comments of opinion difference between the succession CPA andpast CPA.	N/A

• 3.6.3. Past CPA’s replies to item 1 and item 2-3 of paragraph 5 of Article 10 of this code: N/A.

• 3.7. Disclose the name, title, and the period of service at the CPA firm or its affiliates if a director, the president, financial officer or accounting officer of the Company has worked at the CPA firm or its affiliates in the last year: N/A.

• 3.8. Share transfer and share mortgage of directors, supervisors, executives, and shareholders holding over 10% of shares in the last year and by the report publishing

- 36 -

date:

3.8.1. Share transfer of directors, supervisors, executives, and major shareholders:

(unit: share)

				(unit: share)	(unit: share)
		2014		ByApril 13 of currentyear
		I	Increase	I	Increase
Title	Name	ncrease (reduction) of shares held	(reduction) of shares mortgaged	ncrease (reduction) of shares held	(reduction) of shares mortgaged
Chairman	Joseph Wang	(2,000,000)	0	0	0
Director	Xin-chi Yeh	0	0	0	0
Director	ArgosyResearch	0	0	0	0
Representative of Director	Chao-liang Wang	0	0	0	0
Director	Wei-mingLiang	82,000	0	0	0
Director	Meng-ru Zheng	0	10,000	0	(230,000)
Independent Director	Chi-lin Wei	0	0	0	0
Independent Director	Pi-Hsia Hsu-Chung	0	0	0	0
Supervisor	Min-chengLin	0	0	0	0
Supervisor	AndyT.C. Chiu	0	0	0	0
Supervisor	Jun-xingLiang	0	0	0	0
President	Wei-mingLiang	82,000	0	0	0
Vice President	Huang-ji Lin	24,000	0	0	0
Vice President	Zhen-xingChen	0	0	0	0
Director	PingLI	0	0	0	0
Director	Han Tao	0	0	0	0
Director	Qi-zhongChen	0	0	0	0
Director	Wen-sen Huang	10,000	0	0	0
Director	Hong-kai Luo	0	0	0	0
Director	Jia-zhi Hsu	0	0	0	0
Director	Jun-yu Chen	0	0	0	0
Director	Li-hua Zhang	0	0	0	0
Director	Li-li Huang	0	0	0	0
CFO	Ji-zhou Zhang	41,000	0	0	0
Director	Jun-qiangWang	0	0	0	0
Assistant VP	Cheng-lingLi	0	0	0	0
Assistant VP	Xiu-sui Lin	0	0	0	0
Assistant VP	Zhi-xiangZhang	0	0	0	0
Assistant VP	Jie-liangChen	0	0	0	0
Assistant VP	Yun-ru Huang	0	0	0	0
Assistant VP	Jin-ze Zheng	0	0	0	0
Assistant VP	Hao-min Hsu	0	0	0	0
Assistant VP	Bing-chen Song	0	0	0	0
Assistant VP	Xin-chun Wu	0	0	0	0

1 Shareholders holding over 10% of shares are considered as major shareholders (no shareholders of the Company holds over 10% of shares of the Company.)

2 List the counterparty of share transfer or share mortgage in the table below.

3.8.2. Share Transfer Information

	Name	Reasons for Transfer2	Transaction Date	Transaction Counterparty	Relationship between the transaction counterparty and the Company, directors, supervisors, and shareholders holdingover 10% of shares	Shares	Transaction Price

- 37 -

Joseph Wang Legacy 14 Oct 2014 Yong-ning Chen Spouse 2,000,000 N/A

1 Fill in the name of directors, supervisor, and officers of the Company.

2 Fill in “acquisition” or “settlement”.

3.8.3. Share Mortgage Information

	3.8.3. S	hare Mortg	age Informatio	n
Name1	Reasons for Mortgage2	Change Date	Transaction Counterparty	Relationship between the transaction counterparty and the Company, directors, supervisors, and shareholders holding over 10% of shares	Shares	Shares Held (%)	Mortgage Rate (%)	Mortgage (redemption) amount (NT$1,000)
Meng-ru Zheng	Discharge	13 Feb 2014	Taichung Branch, Taishin Bank	No	1,803,000	0.87%	99%	N/A
Meng-ru Zheng	Set	3 Mar 2014	Yuanta Bank	No	1,813,000	0.87%	100%	N/A
Meng-ru Zheng	Discharge	29 Jan 2015	Yuanta Bank	No	230,000	0.87%	87%	N/A

1 Fill in the name of directors, supervisors, and executives of the Company.

2 Fill in mortgage or redemption.

3.9. Information of Top Ten Shareholders Who Are Interested Parties, Spouse, Relatives within Second Degree

Top Ten Shareholders Who Are Interested Parties

Name1	Shares held by o party	wn	Shares held by spouse or minor children	Shares held by spouse or minor children	Shares held under the name of others	Shares held under the name of others	The name and relationship of top ten shareholders who are interested parties, spouse, relatives within second degree3	The name and relationship of top ten shareholders who are interested parties, spouse, relatives within second degree3	Remarks
	Shares	%	Shares	%	Shares	%	Name	Relationship
Fubon Life Insurance	13,804,000	6.64	0 (represented by Ben-yuan Zheng)	0.00	0	0.00	N/A	N/A
Joseph Wang	4,625,023	2.22	2,029,295	0.98	0	0.00	Representative of Taiyi Venture Investment: Wei-zhong Wang. Trust account of Joseph Wang at Taishin Bank	Father and son Asset trust account
Argosy Research	3,624,354	1.74	296,494 (represented by Chao-liang Wang)	0.14	0	0.00	N/A	N/A
Taiyi Venture Capital	3,540,000	1.70	1,594,075 (represented by Zhong-wei Wang)	0.77	0	0.00	Joseph Wang	Father and son
Fiduciary account of the UBS (Lux) Equity SICAV– Emerging Markets at	3,141,761	1.51	0	0.00	0	0.00	N/A	N/A

- 38 -

Name1	Shares held by o party	wn	Shares held by spouse or minor children	Shares held by spouse or minor children	Shares held under the name of others	Shares held under the name of others	The name and relationship of top ten shareholders who are interested parties, spouse, relatives within second degree3	The name and relationship of top ten shareholders who are interested parties, spouse, relatives within second degree3	Remarks
	Shares	%	Shares	%	Shares	%	Name	Relationship
Dunbei Branch of Standard Chartered Bank
Trust account of Joseph Wang at Taishin Bank	3,000,000	1.44	2,029,295	0.98	0	0.00	Joseph Wang	Asset trust account
Guoxiang Investment	2,500,000	1.20	100,000 (represented by Guo-hongWang)	0.05	0	0.00	N/A	N/A
Chen Pang Blind Industrial	2,280,000	1.10	100,000 (represented by Guo-hongWang)	0.05	0	0.00	N/A	N/A
Xin-chi Yeh	2,154,160	1.04	73,522	0.04	0	0.00	N/A	N/A
Fubon Property & Casualty Insurance	2,050,000	0.99	0 (represented by Tian-heng Gong)	0.00	0	0.00	N/A	N/A

1 List all top ten shareholders and the name of companies and their representatives for corporate shareholders.

2 Share-holding percentage is calculated by the percentage of shares held by own persons, spouse, minor children, and under other’s name.

3 The relationship with the said shareholders, including corporations and natural persons, must be disclosed with reference to the Regulations Governing the Preparation of Financial Reports by Securities Issuers

3.10. Consolidated Percentage of Shares Held of Re-Invested Enterprises by the Company, Directors, Supervisors, Executives, or Enterprises under Direct/Indirect Control of the Company

(shares/percentage/31 December 2014)

Re-Invested Enterprise1	Company Investment	Company Investment	Investments by the Company, Directors, Supervisors, Executives, or Enterprises under Direct/ Indirect Control of the Company2	Investments by the Company, Directors, Supervisors, Executives, or Enterprises under Direct/ Indirect Control of the Company2	Consolidated Investments	Consolidated Investments
	Shares	%	Shares	%	Shares	%
SINBON International Enterprise Co., Ltd	-	100.00	-	-	-	100.00
SINBON Beijing	-	100.00	-	-	-	100.00
SINBON HongKong	-	100.00	-	-	-	100.00
Guanze Co.,Ltd.	23,560,000	100.00	-	-	23,560,000	100.00
LiandingVenture Investment	16,000,000	20.00	-	-	16,000,000	20.00
Super Elite Ltd.	-	64.48	-	-	-	64.48
Samoa Smart& Diligent Co.,Ltd	-	51.51	-	-	-	51.51
ArgosyResearch	2,945,034	3.50	14,624,200	17.40	17,569,234	20.90
Korea SINBON Electronics Co.,Ltd.	-	37.50	-	-	-	37.50
SINBON Electronics Beijing	-	100	-	-	-	100
SINBON Electronics Japan	350	70.00	-	-	350	70.00
World Wide Wire Harnesses Co.,Ltd.	-	50.00	-	-	-	50.00
SINBON Technologies L.L.C	-	51.00	-	-	-	51.00
Sinbon USA L.L.C	-	100.00	-	-	-	100.00

- 39 -

1 Investments by the equity method.

2 Investments in Guanze.

3 Items marked by “-”, “0”, N/A, or none; except for items with Remarks.

- 40 -

4. Fundraising

4.1. Capital and Shares

4.1.1. Capitalization

Month/Year	Issue Price	Authorized Shares/Capital	Authorized Shares/Capital	Capital Stock	Capital Stock	Remarks
		Shares (1K)	Amount (NT$1K)	Shares (1K)	Amount (NT$1K)	Sources of Capital (NT$1K)	Non-cash Capital Increase (NT$1K)	Others (NB)
Dec 1989	10	500	5,000	500	5,000	Establishment with cash at 5,000.	None	N/A
Jun 1991	10	1,300	13,000	1,300	13,000	Cash capital increase at 6,000.	Shareholder	N/A
							transactions
							at 2,000.
Dec 1994	10	2,900	29,000	2,900	29,000	Cash capital increase at 5,000.	Liability	N/A
							11,000.
Sep 1995	10	9,900	99,000	9,900	99,000	Cash capital increase at 70,000.	None	N/A
Dec1997	10	19,800	198,000	19,800	198,000	－	Consolidated	N/A
							increase
							99,000.
Sep 1998	10	50,000	500,000	30,000	300,000	Cash capital increase at 64,560. Amortization of premiums at 11,880. Capital surplus transferred to capital at 23,760. New share issue through capitalization of employee bonus at 1,800.		1
							None
Sep 1999	10	50,000	500,000	40,000	400,000	Cash capital increase at 37,000. Amortization of premiums at 30,000. Capital surplus transferred to capital at 30,000. New share issue through capitalization of employee bonus at 3,000.		2
							None
Jul 2000	10	50,000	500,000	46,800	468,000	Amortization of premiums at 44,000. Capital surplus transferred to capital at 16,000. New share issue through capitalization of employee bonus at 8,000.		3
							None
Nov 2000	10	50,000	500,000	50,000	500,000	Cash capital increase at 32,000.	None	4
Jun 2001	10	90,000	900,000	61,500	615,000	Amortization of premiums at 100,000. New share issue through capitalization of employee bonus at 15,000.		5
							None
Mar 2002	10	150,000	1,500,000	70,798	707,981	Conversion with convertible bonds at 92,981.	None	6
Aug 2002	10	150,000	1,500,000	88,213	882,132	Amortization of premiums at 141,596. New share issue through capitalization of employee bonus at 20,000. Conversion with convertible bonds at 12,555.		7
							None
Oct 2002	10	150,000	1,500,000	89,849	898,489	Conversion with convertible bonds at 16,357.	None	6
Oct 2002	10	150,000	1,500,000	90,028	900,279	Conversion with convertible bonds at 1,790.	None	8
Jan 2003	10	150,000	1,500,000	90,455	904,554	Conversion with convertible bonds at 4,275.	None	6
Mar 2003	10	150,000	1,500,000	90,578	905,780	Conversion with convertible bonds at 1,226.	None	6
Jun 2003	10	190,000	1,900,000	100,336	1,003,358	Amortization of premiums at 17,516. New share issue through capitalization of employee bonus at 10,000. Capital surplus transferred to capital at 70,062.		9
							None
Aug 2003	10	190,000	1,900,000	101,700	1,016,997	Conversion with convertible bonds at 13,638.	None	6
Sep 2003	10	190,000	1,900,000	101,797	1,017,971	Conversion with convertible bonds at 974.	None	6
Jul 2004	10	190,000	1,900,000	106,797	1,067,969	Amortization of premiums at 45,999. New share issue through capitalization of employee bonus at 4,000.		10
							None
Aug 2004	10	190,000	1,900,000	107,010	1,070,103	Conversion with convertible bonds at 2,134.	None	6
Jul 2005	10	240,000	2,400,000	131,970	1,319,695	Amortization of premiums at 230,016. Capital surplus transferred to capital at 19,576.		11
							None
Aug 2005	10	240,000	2,400,000	146,281	1,462,811	Conversion with convertible bonds at 143,115.		6
							None
Nov 2005	10	240,000	2,400,000	150,139	1,501,392	Conversion with convertible bonds at 38,581.	None	6

• 41 -

Month/Year	Issue Price	Authorized Shares/Capital	Authorized Shares/Capital	Capital Stock	Capital Stock	Remarks
		Shares (1K)	Amount (NT$1K)	Shares (1K)	Amount (NT$1K)	Sources of Capital (NT$1K)	Non-cash Capital Increase (NT$1K)	Others (NB)
Jul 2006	10	240,000	2,400,000	157,646	1,576,462	Capital surplus transferred to capital at 75,070.		12
							None
Jun 2007	10	450,000	4,500,000	176,563	1,765,636	Amortization of premiums at 157,646. Capital surplus transferred to capital at 31,529.		13
							None
Jun 2008	10	450,000	4,500,000	185,291	1,852,919	Amortization ofpremiums at 87,282.	None	14
Nov 2010	10	450,000	4,500,000	185,796	1,857,962	Conversion with convertible bonds at 5,043.	None	15
Apr 2011	10	450,000	4,500,000	183,796	1,837,962	Capital reduction by mature stock repurchases at 20,000, base date on 25 May 2011.		16
							None
Aug 2011	10	450,000	4,500,000	182,666	1,826,662	Capital reduction by mature stock repurchases at 11,300, base date on 20 August 2011.		16
							None
Nov 2011	10	450,000	4,500,000	179,516	1,795,162	Capital reduction by mature stock repurchases at 31,500, base date on 11 November 2011.		16
							None
May 2012	10	450,000	4,500,000	180,887	1,808,865	Conversion with convertible bonds at 13,704.	None	17
Jul 2012	10	450,000	4,500,000	180,928	1,809,282	Conversion with convertible bonds at 417.	None	17
Nov 2012	10	450,000	4,500,000	200,015	2,000,155	Conversion with convertible bonds at 190,873.		17
							None
Apr 2013	10	450,000	4,500,000	207,671	2,076,709	Conversion with convertible bonds at 76,554.	None	17
Apr 2015	10	450,000	4,500,000	207,956	2,079,563	Conversion with convertible bonds at 2,854.	None	18

NB 1:Approved by Letter (87) Tai-Cai-Cheng-(1) 47522 issued by the Securities and Futures Commission, Ministry of Finance, on 6 June
1998.
NB 2:Approved by Letter (88) Tai-Cai-Cheng-(1) 56082 issued by the Securities and Futures Commission, Ministry of Finance, on 20 June
1999.
NB 3:Approved by Letter (89) Tai-Cai-Cheng-(1) 58816 issued by the Securities and Futures Commission, Ministry of Finance, on 7 July
2000.
NB 4:Approved by Letter (89) Tai-Cai-Cheng-(1) 81883 issued by the Securities and Futures Commission, Ministry of Finance, on 2
October 2000.
NB 5:Approved by Letter (90) Tai-Cai-Cheng-(1) 123711 issued by the Securities and Futures Commission, Ministry of Finance, on 7 May
2001.
NB 6:Approved by Letter (90) Tai-Cai-Cheng-(1) 166362 issued by the Securities and Futures Commission, Ministry of Finance, on 9
November 2001.
NB 7:Approved by Letter (91) Tai-Cai-Cheng-(1) 0910139537 issued by the Securities and Futures Commission, Ministry of Finance, on
16 July 2002.
NB 8:Approved by Letter (91) Tai-Cai-Cheng-(1) 0910133858 issued by the Securities and Futures Commission, Ministry of Finance, on
27 June 2002.
NB 9:Approved by Letter (92) Tai-Cai-Cheng-(1) 0920126156 issued by the Securities and Futures Commission, Ministry of Finance, on
13 June 2003.
NB 10:Approved by Letter (93) Tai-Cai-Cheng-(1) 0930121806 issued by the Securities and Futures Commission, Ministry of Finance, on
18 May 2004.
NB 11:Approved by Letter Jin-Guan-Cheng-(1) 0940119716 issued by the Financial Supervisory Commission, Executive Yuan, on 18 May
2005.
NB 12:Approved by Letter Jin-Guan-Cheng-(1) 0950130935 issued by the Financial Supervisory Commission, Executive Yuan, on 17 July
2006.
NB 13:Approved by Letter Jin-Guan-Cheng-(1) 0960032589 issued by the Financial Supervisory Commission, Executive Yuan, on 28 June
2007.
NB 14:Approved by Letter Jin-Guan-Cheng-(1) 0970033372 issued by the Financial Supervisory Commission, Executive Yuan, on 4 July
2008.
NB 15:Approved by Letter Jin-Guan-Cheng-(1) 0990018240 issued by the Financial Supervisory Commission, Executive Yuan, on 4 May
2010.
NB 16:Cancelled with reference to Article 28-2 of the Securities and Exchange Act.
NB 17:Approved by Letter Jin-Guan-Cheng-Zi 090018240 issued on 4 May 2010 and Letter Jin-Guan-Cheng-Zi 1000060425 issued on 21
December 2011 by the Financial Supervisory Commission, Executive Yuan.
NB 18:Approved by Letter Jin-Guan-Cheng-Zi 1030017865 issued by the Financial Supervisory Commission, Executive Yuan, on 26 May
2014.

• 42 -

Unit: Shares

				Unit: Shares
Share Type	Authorized Shares/Capital			Remarks
	Externally circulated shares1,2	Unissued Shares	Total
Common Share	Listed shares 207,989,994	242,010,006	450,000,000	30,000,000 shares were reserved for subscription warrant, preferred shares with warrants, or exercise of subscription right conversion of equity warrant bonds.

1 Please specify stock status: listed or OCT-listed (remark stocks restricted from public offering or OTC trade).

2 Registration change has been applied for a total of 207,956,288 shares circulating on the market and a total of 33,706 shares remain unchanged.

4.1.2. Shareholder structure

(by 13 April 2015)

4.1.2. Shareholder structure			(by13 April 2015
Shareholder Structure	Count	Shares Held	Percentage
Government Agencies	2	1,441,103	0.69
Financial Institutions	58	33,479,111	16.10
Other Corporations	63	18,584,597	8.94
Foreign Institutions and Individuals	116	28,997,418	13.94
Individuals	28,089	125,487,765	60.33
Subtotal	28,328	207,989,994	100.00

Note: First-time listing and emerging companies shall disclose the shares held by mainland investors. Mainland investors are civilians, corporations, groups, and other organizations or investment companies they establish in a third-party region prescribed in Article 3 of the Regulations Governing Investments by Citizens from Mainland China.

4.1.3. Share distribution

.1.3. Share distribution
			(by13 April 2015)
Shares Held Grading	Number of Shareholders	Shares Held	Percentage
1-999	14,170	923,218	0.44
1,000-5,000	10,486	21,277,333	10.23
5,001-10,000	1,650	13,192,588	6.34
10,001-15,000	584	7,347,343	3.53
15,001-20,000	349	6,507,724	3.13
20,001-30,000	345	8,748,983	4.21
30,001-40,000	156	5,602,971	2.69
40,001-50,000	146	6,876,971	3.31
50,001-100,000	229	16,670,908	8.02
100,001-200,000	89	12,276,430	5.90
200,001-400,000	54	15,525,241	7.46
400,001-600,000	20	9,497,247	4.57
600,001-800,000	13	8,868,822	4.26
800,001-1,000,000	8	7,205,494	3.46
1,000,001-999,999,999	29	67,468,721	32.44
Total	28,328	207,989,994	100.00

4.1.4. List of major shareholders

.1.4. List of major shareholders
Shares Major Shareholder	Shares Held	Percentage
Fubon Life Insurance	13,804,000	6.64

• 43 -

Shares Major Shareholder	Shares Held	Percentage
Joseph Wang	4,625,023	2.22
ArgosyResearch	3,624,354	1.74
Taiyi Venture Capital	3,540,000	1.70
Fiduciary account of the UBS (Lux) Equity SICAV– Emerging Markets at Dunbei Branch of Standard Chartered Bank	3,141,761	1.51
Trust account of Joseph Wangat Taishin Bank	3,000,000	1.44
GuoxiangInvestment	2,500,000	1.20
Chen PangBlind Industrial	2,280,000	1.10
Xin-chi Yeh	2,154,160	1.04
Fubon Property& CasualtyInsurance	2,050,000	0.99

4.1.5. Market price per share, net value per share, equity per share, dividends per share and relevant information in last two years

Item	Year	Year	Year	2013	2014	By 30 April 20158
Market price per share1	Highest			42.05	50.50	55.00
	Lowest			25.80	34.7	43.65
	Average			30.52	43.14	49.60
Net value per share2	Before distribution			22.02	24.17	25.06
	After distribution			19.52	Undistributed	Undistributed
EPS	Weighted average			207,588,000 shares	207,670,000 shares	207,717,000 shares
	EPS3		Adjusted	3.20	3.82	1.15
			Unadjusted	3.20	3.82	Undistributed
Dividends per share	Cash dividends			2.20	2.80	Undistributed
	Dividends for capital surplus			0.30	-	Undistributed
	Stock Grants	Stock dividends from retained earnings		-	Undistributed	Undistributed
		Stock dividends from capital surplus		-	0.20	Undistributed
	Accumulative undistributed dividends4			-	-	Undistributed
ROI	Price/Earnings Ratio5			9.54	11.29	43.13
	Price/Dividends Ratio6			12.21	15.41	Undistributed
	Cash Dividends Yield7			8.19%	6.49%	Undistributed

*When distributing dividends with earnings or capital surplus transferred to capital, disclose the information of market price and cash dividends adjusted with reference to the number of shares distributed.

1 List the highest and lowest market prices each year and calculate the average market price based on the transaction value and transaction volume each year.

2 Fill in the distribution resolved at the shareholders’ meeting in the following year based on the number of shares issued by the end of year.

3 Where back adjustment was made for stock grants, list the adjusted and unadjusted EPS.

4 Where “undistributed dividends of the year can be accumulated for distribution until the year with profit” is specified for the issue of equity securities, disclose the accumulative undistributed dividends by the end of the year.

5 Price/Earnings Ratio=Average Market Price/ Diluted Earnings per Share

6 Price/Dividends Ratio = Average Market Price/Cash Dividends per Share

7 Cash Dividends Yield = Cash Dividends per Share/Average Market Price

8 Disclose the information by the last quarter of report publishing date audited (reviewed) by a CPA for the net value per share and EPS, and fill in the information of the year by the report publishing date for other columns.

4.1.6. Dividends policy and implementation

• 44 -

• (1) Dividends policy

Where there are surplus earnings after the general final accounting, after paying all taxes and adjusting according to relevant accounting principles, we shall compensate for previous losses. Next, we appropriate ten percent as legal reserve, unless the accumulative amount of legal reserve has reached the authorized capital amount. Apart from appropriating special reserve according to legal requirements, the surplus earnings will be distributed according to the following percentage:

• 1) Employee profit sharing: 1-15%.

• 2) Remunerations for directors and supervisors: Not more than 3%.

• 3) Others are all shareholder bonuses.

As the development of this company is under way, there will be a need for production line expansion and capital in the new few years. For this reason, bonuses for shareholders will be distributed in cash dividends at not be more than 20%. When the company can obtain adequate funds to support major capital expense for the year, however, no less than 50% of dividends will be distributed in cash dividends.

• (2) Implementation

Dividends distribution planned at the annual shareholders’ meeting 2014 is as follows:

follows:
Dividends Type	Amount per Share	Source	Status
Cash dividends	2.50	2.20 Undistributed earnings 0.30 Capital Surplus	Distributed on 16 September 2014
Stock dividends	-	-	-
Total	2.50

• 4.1.7. Effect of stock grants planned at current shareholders’ meeting on business performance and EPS

• (1) Effect on business performance

The amount of stock grants planned at the current shareholders’ meeting is “0”, and this will not have any effect on business operation.

• (2) Effect on EPS

The amount of stock grants planned at the current shareholders’ meeting is “0”, and this will not have any effect on EPS.

• 4.1.8. Employee profit sharing and remunerations for directors and supervisors

• (1) Percentage or range of employee profit sharing and remunerations for directors and supervisors specified in the articles of incorporation:

  • 1) Employee profit sharing: 1-15%

  • 2) Remunerations for directors and supervisors: Not more than 3%.

• (2) Bases for estimating employee profit sharing and remunerations for directors and supervisors this period, calculating stock sharing, and accounting solution for differences between actually distributed amount and estimated amount: None.

• (3) Employee profit sharing information passed by the board:

Stock Dividends	Stock Dividends	Cash Dividends	Cash Dividends	Remunerations for directors	Estimated EPS afterplanning
Shareholder Dividends	Employee Profit Sharing	Shareholder	Total

• 45 -

SRE (NT$/share)	Capital Surplus (NT$/share))	Total allotted shares (shares)	Total allotted amount (NT$)	Percentage of total allotted shares in the sum of net profit after tax and total amount of employee profit sharing in individual financial statements	Dividends (NT$/share)	amount of employee profit sharing (NT$)	and supervisors (NT$)	employee profit sharing and remunerations for directors and supervisors (NT$)
-	0.20	-	-	-	2.80	16,000,000	11,500,000	3.69

(4) Distribution of employee profit sharing and remunerations for directors and supervisors with surplus in last year

supervisors with surplus in lastyear	supervisors with surplus in lastyear	supervisors with surplus in lastyear	supervisors with surplus in lastyear	supervisors with surplus in lastyear
Stock Dividends					Cash Dividends		Remunerations for directors and supervisors (NT$)
Shareholder Dividends		Employee Profit Sharing			Shareholder Dividends (NT$/share)	Total amount of employee profit sharing (NT$)
SRE (NT$/share)	Capital Surplus (NT$/share))	Total allotted shares (shares)	Total allotted amount (NT$)	Percentage of total allotted shares in total SRE
-	-	-	-	-	2.50	12,500,000	10,000,000

The above actual distributions are the same as the distribution planned by the board.

4.1.9. Repurchase of corporate shares

30 April 2015

Repurchase session	N/A
Repurchase objective	N/A
Repurchaseperiod	N/A
Repurchaseprice range	N/A
Types andquantityof repurchased shares	N/A
Amount of repurchased shares	N/A
Qualityof cancelled and transferred shares	N/A
Accumulativequantityof own corporate shares	N/A
Percentage of accumulative quantity of own corporate shares in totally issued shares (%)	N/A

4.2. Corporate bonds

4.2.1. Corporate bonds

4.2. Corporate bonds 4.2.1. Corporate bonds
Corporate Bond Type2	Fifth-time Domestic Unsecured Convertible Corporate Bonds5
Issue date	23 June 2014
Face value	NT$100,000
Place of issue and transaction3	N/A
Issue Price	NT$100
Total amount	NT$300,000,000
Interest rate	0%

• 46 -

Expiry	Expiry	3years,until 23 June 2017
Guarantee organization		No.
Trustee		Taipei-Fubon Bank
Underwritingagency		Taipei-Fubon Securities
Certified lawyer		Kang-de Lu
CPA		Wen-bi Yan andQing-yuan Tu
Reimbursement method		Principal in one time on expiry
Outstandingamount		NT$285,800,000
Redemption or advance reimbursement terms		As specified in Articles 18-19 of the issue and conversion regulations.
Restrictions4		N/A
Name of credit rating agency, rating date, and rating results		None
Other additional rights	Amount of converted (conversion or subscription) common stocks, GDRs, and other marketable securities by the report publishingdate	None
	Issue and conversion (exchange) regulations	None
Potential dilution of shares and effect on current shareholder equity of the issue, conversion, exchange, or subscription regulations,and issue conditions.		Dilution rate is about 3% at the latest conversion price at NT$44.50.
Name of depositoryorganization of exchanged stocks		N/A

1 Corporate bonds are currently issued through public offering and private placement. Public offering means corporate bonds approved for issue by the FSC, while private placement means corporate bonds approved for issue by a board resolution.

2 Adjust the number of columns according to the frequency of corporate bond issues.

3 List out corporate bonds issued overseas.

4 Such as restrictions on cash dividends distributions, external investments, and request of maintaining assets at a specific percentage.

5 Highlight corporate bonds issued through private placement.

6 Disclose the information of bonds by nature according to the format in the list. These bonds include convertible bonds, exchangeable bonds, self-registration bonds, and equity warrant bonds.

• 4.2.2. Convertible corporate bonds: Unissued convertible corporate bonds by the report publishing date:

• 47 -

Bond Type1		Fifth-time Domestic Unsecured Convertible Corporate Bonds	Fifth-time Domestic Unsecured Convertible Corporate Bonds
Item	Year	2014	By 30 April 20154
Market price of bonds2 (NT$)	Highest	113.95	121.90
	Lowest	102.10	107.50
	Average	110.14	113.52
Conversionprice(NT$)		46.90	44.50
Issue date		23 June 2014	23 June 2014
Price at issue(NT$)		46.90	46.90
Conversion obligation3		New issued share	New issued share

1 Adjust the number of columns according to the frequency of corporate bond issues.

2 List all overseas transaction places, if any.

3 Delivered issued shares or new issued shares.

4 Disclose the information of the year by the report publishing date.

4.3. Issue of preferred shares: N/A

4.4. Issue of GDR: N/A

4.5. Issue of certificates of employee stock subscription: N/A

4.6. Issue of employee restricted shares: N/A

4.7. Acquisition (including mergers, buyouts, and spin-offs): N/A

4.8. Items to be disclosed in capital utilization plans: N/A

• 48 -

5. Operation Overview

5.1. Business operations:

5.1.1. Scope of operations:

1. CC01080 Electronic parts and components manufacturing.

2. F119010 Wholesale of electronic materials.

3. CC01110 Computers and computing peripheral equipment manufacturing.

4. F113050 Wholesale of computing and business machinery equipment.

5. CC01030 Electric appliance and audiovisual electric products manufacturing.

6. F113020 Wholesale of household appliances.

7. CC01101 Restrained telecom radio frequency equipment and materials manufacturing.

8. F401021 Restrained telecom radio frequency equipment and materials import.

9. CC01060 Wired communication equipment and apparatus manufacturing.

10. CC01070 Wireless communication equipment and apparatus manufacturing.

11. F113070 Wholesale of telecom instruments.

12. CC01090 Batteries manufacturing.

13. F113110 Wholesale of batteries.

14. I501010 Product designing.

15. CF01011 Medical materials and equipment manufacturing.

16. F108031 Wholesale of drugs, medical goods.

17. CE01021 Metrological instruments manufacturing

18. F113060 Wholesale of metrological instruments.

19. F401010 International trade.

20. ZZ99999 All business items not prohibited or restricted by law, except those that are subject to special approval.

5.1.2. Industry overview

Our Company specializes in the processing and manufacturing of cable assemblies as well as the distribution of connectors in Taiwan. Apart from the provision of integration, design and manufacturing services for electronic components, we are also the largest distributor in Asia for

• 49 -

Hirose connector products. Hirose is one of the top 10 connector manufacturers in the world. Our products have a wide range of applications ranging from Medical Health, Automotive, Green Energy, Industrial Application and Communication, or "MAGIC" for short.

1. Current state and developments of the industry:

Connector refers specifically to component and peripherals attached to electronic product signal and power sources. In more general terms, it refers to cable assemblies, sockets and plugs. It provides a detachable or replaceable interface for connecting two sub-systems within an electronic system so that signals or power can be transmitted. It can be considered the bridge between all signals.

A cable assembly refers to a device with cables in the middle and connectors on one or both ends. The main types of connectors are Chip-to-Board, Intra-equipment, and Inter-Equipment. Intra-equipment connections can be further divided into Board-to-Board, Wire-to-Board and Wire-to-Wire connectors. Board-to-Board connectors have both ends affixed to a printed circuit board (PCB). Depending on the implementation, it can be classified as Surface Mount Technology (SMT) or Dual In-line Package (DIP); Wire-to-Board and Wire-to-Wire connectors are those that have one or both ends affixed to the cable. Inter-equipment connections can be divided according to shape into circular connectors, rectangular connectors, co-axial connectors and fiber optic connectors. There are many types of cable assemblies and connector products. In addition to traditional interface standards such as RF Coaxial, Composite Video, S-Video, YPbPr, VGA, DVI, IEEE 1394, BNC and USB 2.0, market growth is now mainly driven by newer, high-speed interface standards such as HDMI, DisplayPort, Apple Lightning Connector, DockPort, Thunderbolt, HD-SDI, MHL, SlimPort and USB 3.0/3.1.

The connector production process is divided into three stages: front-end design, intermediate production and back-end assembly. Design encompasses product design and mold development, production consists of the stamping, molding and plating processes, while assembly includes the assembly and testing processes. A wide range of technologies are involved including terminal manufacture, mold manufacture, plastic

• 50 -

molding, surface treatment, cable manufacture, assembly, inspection and testing. Poor connector quality not only impacts the reliability of signal and power transmission but also has an effect on the operational quality, performance and service life of the entire electronic system and product. Modularity, systemization and high sensitivity are therefore all important in connector circuit design.

Connectors are an important and widespread part of the electronics industry with extensive applications in many end-user fields. A Bishop & Associates study suggested that Automotive, Telecommunications, Computers and Peripherals, Industrial, Military and Aerospace, Transportation, Consumer Electronics and Medical Health make up the main fields in the global connector application market (see Fig. 1, 2). According to the projected market growth rates for 2015, increased use of automotive electronics, the development of electric vehicles as well as the strong growth of the luxury and SUV markets in China and the U.S. all suggest that automotive connectors have the most growth potential at 8.1%. The supply chain is more closed, certification more difficult and time-consuming than other industries however so the threshold is higher; telecommunication connectors is a close second at 6.8% due to cloud and 4G introduction; transportation connectors are in 3rd place at 5.3%.

Figure 1. Global connector application market shares in 2014

Figure 2. Projected global connector application market shares for 2015

==> picture [380 x 64] intentionally omitted <==

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

Automotive Telecommunica Automotive Telecommunica
Computers and Peripherals Industrial Computers and Peripherals Industrial
Military and Aerospace Transportation Military and Aerospace Transportation
Consumer Electronics Medical Health Consumer Electronics Medical Health
Other Other
----- End of picture text -----

Source: Bishop & Associates (2015/03), compiled by Sinbon

1 Overview of Global Connector Market

A Bishop & Associates study put the size of the global connector market

• 51 -

at 52.86 billion USD in 2014, up 8.1% from 2013. It is also expected to grow by 5.1% in 2015 to reach 55.57 billion USD (see Fig. 3) then continue growing at 6.1% CAGR through to 2019 when it will be worth 70.88 billion USD. The top 3 regional markets for connectors were China, Europe and North America with 25.8%, 21.4% and 20.5% respectively of the global market in 2014 (see Fig. 4). Together they accounted for nearly 70% of the overall market. While growth has been strong in China and North America, the Asia-Pacific region's growth potential should not be ignored either. Europe and Japan on the other hand have seen a slowdown in growth; in 2015, growth will become moderate in each region while market shares remain unchanged (see Fig. 5).

==> picture [373 x 156] intentionally omitted <==

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

Figure 3. Global connect
圖三、全球連接器市場規模
700 629.5 660.0 10%
億 8.1% 587.9 成
600 555.7 8%
美 528.6 長
476.1 488.8
元 500 7.1% 6% 率
5.8%
400 5.1% 4.9% 4%
300 2%
2.7%
200 0%
100 -2%
-2.7%
0 -4%
2012 2013 2014 2015(F) 2016(F) 2017(F) 2018(F)
( (
) )(Growth Rate)
(100 Million USD)
----- End of picture text -----

Source: Bishop & Associates (2015/03), compiled by Sinbon

==> picture [382 x 183] intentionally omitted <==

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

Figure 4. Global connector Figure 5. Projected global
regional market shares in 2014 connector regional market shares
China Europe North America China Europe North America
Asia-Pacific Japan Other Regions Asia-Pacific Japan Other Regions
----- End of picture text -----

Source: Bishop & Associates (2015/03)

• 52 -

Environmental changes, such as the moderate economic recovery in the U.S., Europe's gradual emergences from the Euro-debit crisis and the devaluation of the Yen, have produced steady growth for the connector industry as a whole based on global GDP growth. The full-scale miniaturization of computers and consumer electronic products may have reduced some of the demand for connectors but the increase in miniaturized connector products with high unit prices means industry output has remained relatively unchanged; the increasing popularity of new applications such as cloud and Internet-of-Things (IoT) in recent years is also pushing up shipments for medical health, automotive, green energy, industrial and telecommunication connector products. Steady growth in the global connector market is being driven by developments centered around high-end emerging applications.

Connector developments in the future will be along two main directions. In the first, smaller, more sophisticated terminal products will call for miniature connectors suitable for mobile phones, tablets, ultra-light notebooks and other slim products. The technologies to reduce the amount of space required by connectors by shrinking intervals and attachment heights are currently still held by Japanese companies; in the second, the maturity of the cloud and IoT concepts means high-quality multimedia content that generate large amounts of data traffic. It is therefore essential to develop high-frequency connectors. Thunderbolt 2.0, MHL 3.0, USB 3.1 and Type C will therefore be the key technologies in the future market.

The top 10 connector manufacturers in the world account for around 60% of the overall market (see Fig. 6). They are dominated by American and Japanese companies due to their exceptional R&D capability, technical standards and product quality. Mergers, acquisitions and alliances are also frequently employed to maintain their market leadership and competitive advantage. Due to the wide scope of product applications, TE Connectivity has opened its lead against 2nd place and 3rd place Amphenol and Molex in size. Delphi Connection Systems has used the automotive electronics supply chain to its advantage and by cultivating the Chinese market surpassed Foxconn to become the 4th largest connector supplier. The top 4 American companies now own

• 53 -

around 40% of the overall market. Foxconn from Taiwan has benefited from group resources and its longstanding partnership with international customers such as Apple. Its business has remained steady and at 5.5% market share it is the 5th largest connector maker. Japanese companies Yazaki, JST, JAE, Sumitomo Wiring System and Hirose are in the 6th to 10th place and together account for around 15% of the overall market.

Figure 6. Global market shares of the top 10 connector manufacturers圖六、全球連接器前十大廠商比重

==> picture [362 x 142] intentionally omitted <==

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

17.8%
39.6%
8.8%
3.1% 4.9% 7.4%
2.0% 6.0%
2.1% 2.7% 5.5%
TE Connectivity Amphenol Molex
Delphi Connection Systems Foxconn (Hon Hai) Yazaki
JST JAE Sumitomo Wiring Systems
Hirose Others
----- End of picture text -----

Source: Bishop & Associates (2014/09), compiled by Sinbon

2 Overview of Chinese Connector Market

The rapid growth of the automotive, communication and consumer electronic end markets as well as the continued migration of global connector production capacity to Asia and China means Asia is now the region with the greatest development potential. China has also become the largest and fastest-growing market. Large international connector companies are all setting up production sites in China making it a key global manufacturing hub for electronic products. In 2014, China's connector market was worth 13.64 billion USD, up 14.5% from 2013. It was also the only region to see 2-digit growth. In 2015, it is expected to grow by 6.6% to 14.53 billion USD putting it firmly in the top spot globally (see Fig. 7). It is also expected to grow at 7.9% CAGR until 2019 to reach 19.94 billion USD and continue to grow at a rate higher than the global average.

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

Figure 7. Size of the Chinese connector market
圖七、中國連接器市場規模
160 136.4 145.3 16%
億 成
140 14%
美 114.4 119.1 長
元 120 14.5% 12% 率
100 10%
80 8%
60 6%
6.6%
40 4%
1.3% 4.0%
20 2%
0 0%
2012 2013 2014 2015(F)
)( ()(Growth Rate)
(100 Million USD)
----- End of picture text -----

Source: Bishop & Associates (2015/03), compiled by Sinbon

China's connectors consist mainly of low- to mid-range board and card connectors. The high-end connector segment is smaller but growing rapidly. The main applications are computers and peripherals, automotive and medical health connectors. Strong sales of domestic carmakers have driven up shipments of automotive electronic products. Growing demand and output from consumer electronics such as mobile phones and tablets have also helped drive the growth of the Chinese connector market. Chinese connector makers are actively looking for foreign partners to introduce management techniques and production technologies. This has helped spur the development of Chinese connector technology. The trend towards smaller, slimmer and high-performance terminal products have spurred the evolution of connector products towards miniaturization, small interval, high density, high frequency and high transfer rates. This will be the future of Chinese connector market developments.

Chinese connector companies are quickly expanding their technical capabilities and building up vertical integration synergies through acquisitions, investments, alliances and capital increases. This also allows them to realize strategic goals such as entry to the global supply chain, market expansion and patent acquisition. Its market share is now rapidly catching up to leading European, American and Japanese companies. Larger Chinese connector companies today include Shanghai Feilo, Deren Electronic, Jonhon, Aerospace Electronics, Sichuan Huafeng and Luxshare-ICT.

3 Overview of European Connector Market

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Due to the Euro-debt crisis in 2012, the automotive and energy industries experienced a slowdown that saw the regional market shrink by 12% to 9.92 billion USD and China take over as the leading global connector market. Europe is beginning to emerge from the shadow of Euro-debt, and in 2014, the European connector market was worth 11.31 billion USD, up 6.3% from 2013. In 2015, it is expected to grow by 4.5% to 11.82 billion USD making it the world's No. 2 market for now (see Fig. 8). It will then grow at 4.3% CAGR through to 2019 and reach 14.41 billion USD.

Around 81% of the European connector market is concentrated in West European countries such as Germany, France, U.K., Italy and Switzerland. Germany, France and U.K. alone account for 52%. Eastern European countries such as Turkey, Hungary, Poland and the Czech Republic account for 18% of the market. The top 10 European connectors account for around 23% of the European market. The top 5 are Rosenberger, Harting, Phoenix, Souriau and Radiall.

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

Figure 8. Size of the European connector market圖八、歐洲地區連接器市場規模 118.2
120 113.1 10%
106.4
億 99.2 成
美 100 7.3% 5% 長
6.3%
元 80 4.5% 率
0%
60
-5%
40
-10%
20
-12.0%
0 -15%
2012 2013 2014 2015(F)
() ()(Growth Rate)
(100 Million USD)
----- End of picture text -----

Source: Bishop & Associates (2015/03), compiled by Sinbon

4 Overview of North American Connector Market

In 2014, the North American connector market was worth 10.86 billion USD, up 7.8% on 2013. In 2015, it is expected to grow by 4.2% to 11.32 billion USD, putting it close behind Europe (see Fig. 9). It will also grow at 4.6% CAGR through to 2019 and reach 13.59 billion USD. The U.S. has leveraged its strength in capital to not only acquire complete technical solutions through acquisitions but also invest heavily in R&D to maintain its leadership in the connector industry. Leading manufacturers include TE Connectivity, Amphenol, Molex and Delphi Connections. These large international companies exert a major influence on the connector

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industry.

The slide in the price of 3C terminal devices in recent years has led to a gradual U.S. withdrawal from the PC, NB, tablet and smart phone connector markets to concentrate development on other applications including medical health, solar power, robotics, aerospace & defense, automated measurement, and 4G telecommunications. These consist mostly of large voltage, large current, RF, fiber optic, and high-frequency backplane connectors. Companies involved in this field include TE Connectivity, Amphenol and Molex. In addition to the two main applications of multimedia entertainment and mobile high-speed transmission, automotive connectors are also used in automotive safety applications such as semi-automated driving assistance, in-vehicle network system, and cabling for critical components. The safety standards and specifications are therefore more rigorous than consumer electronics. Apart from being waterproof, shockproof and dustproof, environmental tolerance for high and low temperatures must be higher as well. Delphi is currently the technology leader in this field.

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

Figure 9. Size of the North American connector market
圖九、北美地區連接器市場規模
120 113.2 9%
108.6
億 成
100.8 8%
美 100 95.3 長
元 7.8% 7% 率
80 6%
5.7% 5%
60
4%
4.2%
40 4.0% 3%
2%
20
1%
0 0%
2012 2013 2014 2015(F)
() (Growth Rate)()
(100 Million USD)
----- End of picture text -----

Source: Bishop & Associates (2015/03), compiled by Sinbon

5 Overview of Japanese Connector Market

In 2014, the Japanese connector market was worth 5.6 billion USD, up 4.3% on 2013. In 2015, it is expected to grow by 2.9% to 5.77 billion USD (see Fig. 10). Japanese companies do not enjoy the advantage of strong financial backing like the U.S. but have remained competitive on high-end products through accumulated past technical expertise. Apart

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from increasing its share of the consumer electronics market that the U.S. withdrew from, it is also actively positioning itself in the green energy market such as solar power, wind power, electric vehicles, and intelligent home energy management systems by providing high-precision miniaturized board connectors, I/O connectors, charger and battery connectors. It is also strengthening its automotive connector solutions through acquisitions, mergers and alliances. The leading connector manufacturers in Japan today include Yazaki, JST, JAE, Sumitomo Wiring System and Hirose.

Technology R&D in Japan is also developing along the two main directions of miniaturization and high-frequency. As the design for terminal products such as Ultralike NBs, tablets, mobile phones and wearable devices become even thinner, lighter and smaller, the critical technologies for connectors now focus on reducing intervals and attachment height. Production now focuses on smaller footprints, thinner intervals, fool-proofing and resistance to electromagnetic interference (EMI) so that connectors take up even less space. Japanese companies have an advantage in miniaturization technology. 0.3 mm intervals are possible and attachment height can be kept below 0.6 mm.

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

Figure 10. Size of the Japanese connector market 圖十、日本連接器市場規模
70 64.0 10%
億 56.0 57.7 成
美 60 53.8 5% 長
元 50 4.1% 4.3% 2.9% 0% 率
40
-5%
30
-10%
20
10 -15%
-16.0%
0 -20%
2012 2013 2014 2015(F)
( (
) )
(100 Million USD) (Growth Rate)
----- End of picture text -----

Source: Bishop & Associates (2015/03), compiled by Sinbon

6 Overview of Domestic Connector Market

According statistics from the Industrial Technology Research Institute (ITRI)'s Industrial Economics and Knowledge (IEK) center, in 2014, Taiwan's connector exports were estimated to be worth 130.1 billion NTD, up 7.6% on 2013 (see Fig. 11) and accounted for about 10% of the

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global market. There are around 345 local connector companies so many contract manufacturers involved with the assembly of electronic systems and products are headquartered in Taiwan. Taiwan is also main source of connectors for China.

In 2013, Taiwan's top 3 customers for connector exports were China, the U.S. and Hong Kong. The emergence of a local supply chain, improvements in technology and higher self-sufficiency affected Taiwan's connector exports so they slid from 22.8% in 2012 to 21% in 2013 (see Fig. 12 and 13). Taking advantage of China's greater west strategy to merge into the emerging local supply chain and secure potential markets offer Taiwanese connector a major opportunity; the U.S. is now withdrawing from the low-end 3C connector market because its large companies are turning their attention to the development of niche connector applications such as medical health, green energy and industrial so its imports from Taiwan increased from 18.7% in 2012 to 19.4% in 2013; exports to Germany and Japan consist mainly of automotive and digital domestic appliance connectors respectively.

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

Figure 11. Value of connector exports and imports in Taiwan
圖十一、台灣連接器進出口產值
1357.4 1358.4
1400 1301.2 1321.5 10%
新 1209.4 7.6% 成
1200
台 2.8% 5% 長
幣 1000 0.4% 1.6% 率
億 2.6% 0%
800 0.9% 0.9%
元 -4.9%
-5.5%
600
-5%
431.9 410.8 421.4 425.2 428.9
400
-10%
200
-10.9%
0 -15%
2012 2013 2014(F) 2015(F) 2016(F)
台灣連接器出口產值Value of connectors exported from Taiwan
台灣連接器進口產值Value of connectors imported to Taiwan
（ (Growth Rate)（
﹚
(100 Million NTD)
﹚
----- End of picture text -----

Source: IEK (2014/07), compiled by Sinbon

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

Figure 12. Taiwan's export markets 圖十二、2012年台灣連接器 Figure 13. Taiwan's export markets 圖十三、2013年台灣連接器
for connectors in 2012出口國比重 for connectors in 2013出口國比重
28.9% 22.8% 29.3% 21.0%
2.5% 18.7% 2.6% 19.4%
14.5% 14.8%
4.3% 4.0%
5.4% 4.4%
4.6% 4.5%
China 中國 U.S 美國 Hong Kong 香港 Germany 德國 China 中國 U.S 美國 Hong Kong 香港 Germany 德國
Japan 日本 U.K 英國 Thailand 泰國 Other 其他 Japan 日本 U.K 英國 Thailand 泰國 Other 其他
----- End of picture text -----

Source: IEK (2014/07), compiled by Sinbon

Taiwan's connectors are mainly used in computers & peripherals, consumer electronics and communication products (see Fig. 10). These together account for 94% of all connector production in Taiwan. Shipments are mostly in the form of board connectors, card connectors, rectangular I/O connectors and IC sockets. Computer products have the highest share but weak demand, less need for connectors in thinner, lighter products, and cut-price competition from Chinese companies have all led to Taiwan's connector production lagging behind the rest of the world.

Figure 14. Distribution of the Taiwanese connector market 圖十四、台灣連接器應用市場比重

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

6.0%
23.8% 44.9%
25.3%
電腦與週邊Computers and Telecommunications電信通訊 Consumer 消費電子 Other其他
peripherals electronics
----- End of picture text -----

Source: IEK (2013/11), compiled by Sinbon

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Since 2012, however, domestic connector companies began adjusting their product mix, expanding the types of applications and transitioning over to niche markets in order to reduce their dependence on computer applications. In 2014, the emergence of the cloud and IoT, as well as the mass introduction of electronic parts by the automotive industry, saw a significant growth in non-computer shipments by Taiwanese companies for automotive, server, networking and other consumer electronic applications. Medical health, green energy and industrial applications have also made progress in breaking into the supply chain of large international companies, resulting in industry growth. In the future, computer applications will be superseded by connectors related to consumer electronics, cloud and automotive electronics. Compared to European, American and Japanese companies' balance approach in each field, Taiwanese companies are weak when it comes to medical health, green energy and aerospace applications that show strong future potential. There is still significant room for future growth.

To reduce production costs and be close to customer demand, Taiwanese connector companies are now moving highly standardized, high-volume production lines to China. Domestic production is now focused on high-end connectors for NBs, high-frequency, high-speed connectors for networking and consumer electronics, as well as highly customized niche connector products for medical health, automotive and green energy. Automotive connectors have a high threshold. Domestic connector companies now mainly focus on multimedia entertainment, navigation and other non-safety-critical systems. They are also developing cabling and connector products for electric vehicle chargers and battery systems.

Increasingly sophisticated and miniaturized terminal product designs, as well as the increasing maturity of cloud and IoT technologies/applications, mean that connector development will focus on miniaturization and high frequency. Taiwanese connector manufacturers currently still behind Japanese companies in miniaturization technology. Local companies are now aggressively looking for upgrade opportunities and engaging in

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strategic cooperation on complementary product technologies for the sake of industry integration and transformation. They are also using their proficiency in supply chain integration to aggressively expand production in China and increase the level of automation. By greatly reducing production costs and R&D times, they hope to meet with success again in the next wave of market competition.

Sinbon has many years of experience in niche connector markets such as the medical health, automotive, green energy and industrial application markets. We have since won the trust of our customers over the years. The growth of customers, the increase in quantity and share of customers' cable assembly sales have sustained the steady growth of our business.

2. Supply chain relationship:

A connector product consists of the terminals and plastic casing. The industry structure and value chain (Fig. 15) can be divided between the upstream raw material suppliers, mid-stream connector manufactures and down-stream application industries.

1 Upstream

Upstream can in turn be divided among the suppliers of metals, plastics, electroplating and other materials. They account for around 60% of production costs. Metal materials account for the largest share followed by plastics then electroplating.

Metals are used to make connector terminals. To avoid signals being obstructed or degraded during transmission, brass or phosphor bronze are turned into copper alloy plates to ensure good electrical conductivity, heat tolerance and mechanical strength; plastics frequently used for connector casing include PBT, PPS, Nylon and LCP resin; electroplating is related to the connector's conductivity and mating life cycles. Gold and tin electroplating liquid are the most commonly used follow by nickel and

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silver-plating. Commonly used brass, PBT, and tin-lead electroplating liquid can all be sourced from domestic suppliers. High-end materials such as phosphor bronze, LCP, pure tin and tinned copper electroplating liquid are mostly imported from the U.S. and Japan.

The upstream material industry's size, supply and demand, and pricing changes have a major effect on the development of the connector industry. The quality of raw materials is also critical to the manufacture of high-quality connectors. Plastic prices have remained relatively stable so metal prices are crucial to the industry. In early 2014, the drop in gold and tin prices reduced production costs and increased profit margins for connector manufacturers. The rapid obsolescence rate of electronic products however mean that connectors should monitor external changes in supply and demand as well as product upgrade cycles carefully so they can release connector products that match market trends; internally, they should strengthen their inventory management to avoid inventory losses due to changes in material prices. Taiwanese connector manufacturers now have full control over the main midstream processes. Upstream materials and equipment are however still mostly controlled by Japanese companies and there is little domestic R&D into related fields. Local companies are still in a relatively weak position when it comes to bargaining with upstream suppliers.

2 Midstream

Midstream connector manufacturers encompass metal stamping, plastic injection, electroplating and assembly companies. The connector manufacturing process includes the front-end product design & mold development, the intermediate metal stamping, plastic injection and electroplating processes, then back-end assembly and testing (conductivity & signal performance, pressure resistance, high-frequency characteristics etc.). Connector manufacturing can be broken down into a "metal part" and "plastic part". The metal parts are formed through machining, stamping and die-casting before electro-plating. Machining is

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frequently used for the manufacture of RF connector terminals and casing, stamping is usually used for manufacture of terminals and casings, though die-casting can also be used for casing manufacture. Technical and cost considerations mean that electroplating is usually outsourced; plastic parts generally use injection-molding.

3 Downstream

Depending on the product specifications and design, connectors are extensively used in fields such as automotive, telecommunications, computers and peripherals, industrial, military and aerospace, transportation, consumer electronics and medical health. Its development will directly determine the market, product mix and R&D direction for connector products. Connector manufacturers generally have a particular specialty. Downstream application companies usually work closely with midstream connector manufacturers to ensure stable quality, cost and delivery.

Slowing demand from the global computer market and the high level of maturity in the connector industry means that room for future market growth is limited with terminal products becoming more minimalist in design and using less connectors. This is why Taiwanese connector companies have, in recent years, increasingly shifted away from downstream application industries such as computers and peripherals, telecommunications and consumer electronics into other applications such as medical health, automotive, green energy, industrial, networking, cloud and wearable device connectors. These make-up a relatively small proportion of the overall output and there is still plenty of room for development.

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Figure 15. Connector industry supply chain

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

Metals Electroplating Plastics Other
Brass Gold plating Zinc Alloy
Phosphor Bronze Tin plating Materials used for
Beryllium Bronze Tin-Lead plating welding and sealing base
Titanium Bronze Tin-Copper plating and casing
Cold-rolled steel Nickel plating Ceramic
(SPCC) Silver plating Glass
Palladium-Nickel Alloy
Electroplating process
Plate then stamp
Die stamping Plastic molding Die manufacture
Machining Direct-injection
Die-casting Injection molding
die casting
Electroplating process
Other
Assembly
Testing
Connector product
Source: IEK. Compiled by Sinbon
Upstream material suppliers
manufacturers Midstream connector
Downstream Industrial Automotiv
e
Other industries
application industries
Automotive industry Automotive industry industry
Telecommunications industry Computers and peripherals industry Military and aerospace industries Transportation industry Consumer lectronics industry Medical health industry
----- End of picture text -----

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3. Product development trends:

The electronic parts and components produced, sold and distributed by our Company are divided into the five main industries listed below and is known as MAGIC for short:

(1) Medical Health:

Aging populations and the growing number of chronically ill will push the development of diagnostic imaging products. Emerging markets such as the Asia-Pacific, Latin America and Central/Eastern Europe are expected to be the driving force in the growth of the global medical diagnostic imaging market. Statistics from BMI Esipcom indicated that in 2013, the global market for medical diagnostic imaging products was worth around 82.5 billion USD. The Asia-Pacific region accounted for 24% of the global diagnostic imaging medical device market, second only to North America at 47% and ahead of Europe at 22%. Most Asia-Pacific nations are emerging markets and by 2017 they should grow to 29.8 billion USD, for a CAGR of 8.2% between 2013 ~ 2017 (see Fig. 1).

Market size Growth rate

==> picture [32 x 174] intentionally omitted <==

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

M
Unit: Million USD
----- End of picture text -----

Source: BMI (2014), compiled by Sinbon

Figure 1. Size of the Asia-Pacific market for medical diagnostic imaging-related medical device products and growth forecast

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IEK statistics indicate that, in 2013, the Asia-Pacific market for diagnostic imaging instruments and equipment was worth around 10.4 billion USD. Japan was the largest market at 4.3 billion USD followed by China at 3.1 billion USD, Australia at 700 million USD and India at 680 million USD. Their shares of the Asia-Pacific diagnostic imaging instrument and equipment market were 41.4%, 30%, 6.8% and 6.5% respectively. United Imaging is China's leader in high-end medical imaging equipment. In 2014 the uDR 770i and uDR 580i equipment produced by United Imaging won iF design awards and were the first large medical equipment from China to win that prize. Sinbon is already a supplier to United Imaging and once the product enters mass production, passes certification and receives the protection and support of the local government this will help drive sales growth. According to Chinese officials, the price of imported high-end medical equipment is too high. In China, a high-end magnetic resonance imaging (MRI) unit costs between 1.2 ~ 2.5 million RMB when imported while a Gamma Knife radiosurgery unit costs around 10 million RMB to import. Equivalent products cost just half that overseas. Government protection as well as the policy of replacing imports with domestically produced equivalents will undoubtedly lead to large and steady growth in shipments by United Imaging and Neusoft.

In the global portable medical electronics market, at the end of 2013 BCC Research reported that the global market for portable medical devices will reach up to 77.4 billion USD in 2017 for a CAGR of 8.3%. This is one of the key areas of development at Sinbond. The portable medical electronics market in China has maintained a CAGR of 20 ~ 30% for 5 successive years so far. In 2013, medical electronic devices for diagnostics, imaging, therapy and monitoring grew steadily in China. Output is expected to rise to 7.4 billion USD in 2016 with an average CAGR of 13% (see Fig. 12). This could mostly be attributed to the rapid increase in demand for CAT, MRI and high-end ultrasonic diagnostics instrument products that spurred the expansion of the medical electronics market.

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Analysis of China's medical electronics output for 2009 ~ 2016 (by field of application)

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

Source: HIS iSuppli (2012/12)
(Output in millions of USD)
----- End of picture text -----

Figure 12. Analysis of China's medical electronics output for 2009 ~ 2016

(2) Automotive:

The electric vehicle (EV) industry has been developing rapidly in recent years. Graph (1) shows that EV sales have risen quickly in the past three years. Most importantly, sales of pure electric vehicles in 2013 grew by 228.88% compared to 2012; sales of Plug-in Hybrid Electric Vehicles (PHEV) grew by 26.87% over the same period. The data shows that the gap between sales of EVs (46,148) and PHEVs (48,951) is narrowing and in 2014, EV will outstrip PHEV. Graph (2) shows that the U.S. was No. 1 in the world in terms of EV and electric vehicle supply equipment (EVSE) stock, with Japan and France in 2nd and 3rd place respectively. China was No.2 in terms of EVSE stock followed by Japan, the Netherlands and Germany.

==> picture [85 x 33] intentionally omitted <==

Graph (1) Source: EV Obsession, 2013

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Graph (2) Source: Global EV Outlook, 2013

Future Prospects

An analysis by Bharat Book Bureau proposed the following three viewpoints:

1. The EV industry has gradually become the optimal solution for energy security as well as solving the problem with greenhouse gases and other pollutants.

2. Total EV sales are expected to reach 7.5 million units per year by 2020.

3. Between 2014 and 2020, sales of EV will grow at a CAGR of 19%.

Sights Set on EV Charging and Automotive Parts

EVs are now the trend for the future. Many Taiwanese companies are now beginning to move from consumer electronics over to telematics hardware and services. Nevertheless, EV charging systems are still not widespread or standardized. Three major standards currently exist worldwide, the first being the SAE Combo being promoted by 8 leading Western carmakers, Tesla Supercharger developed by Tesla itself, and CHAdeMO which was developed by large Japanese carmakers.

The carmakers supporting SAE Combo include Audi, BMW, Ford, Porsche and Daimler. These brands will equip their EVs with the SAE charging

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standard in the future. SAE aims for quick charging stations to finish charging under 10 minutes with DC power. Public charging stations must be able to provide power at 500V. The Tesla Supercharger specification only supports Tesla models but the company expects to establish 100 charging stations on key American roads by 2015. Tesla still has development potential. CHAdeMO is the fastest growing of the three specifications. Its members, made up of mostly Japanese car companies, are working together to develop and unify the charging specifications for EVs and PHEVs.

Now that Tesla has raised its sales target for the year the demand for EV parts such as charging units and sockets have also increased as well. Plans at other international carmakers suggest that 100,000 charging stations will be built across Europe and America in the future. This will generate 3 billion NTD in associated business opportunities.

Among automotive electronics, smart electronics applications will account for up to 40% of the market in the future. Expectations are particularly high for driving information, safety assistance and onboard electronics. The Ministry of Economic Affairs statistics indicate that Taiwanese automotive parts have grown steadily in recent years and in 2012 accounted for 33.2% of all automotive parts. Leading carmakers are now integrating LTE onboard terminal systems into their offerings and onboard access terminals are expected to be the focus of future developments for the next few years.

The continued increase in global automotive sales will help boost the output for automotive parts. Many electronic features are now being adopted by carmakers including automated detection, automatic braking system and lane deviation detection system.

(3) Green Energy:

Global Solar Power Developments

Government policy still exerts a strong influence on the solar power industry. Generally speaking, relatively stable political environment, gradual economic recovery and continued support for environmentalism have helped spur demand and R&D investments in solar power in 2014.

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The favorable macro conditions for solar power development may lead to the market demand growing in leaps and bounds. With the exception of the U.S. and Japan, demand in the coming year will be concentrated in developing countries where the variables and uncertainty will be higher than European countries.

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

Global new installed
capacity
----- End of picture text -----

In 2014, the global photovoltaic (PV) market grew by 10% to 40 GW. The European market has continued to shrink while China and Japan will become the market focus with around 50% of the global market.

Compared to 2013, 2014 demand from environmentally aware Eastern and Southern European countries will decrease. Previous market leaders such as Germany and Italy will also see a sharp decline in demand. With the exception of Japan and U.S. where demand will remain strong, new demand will now be concentrated in emerging countries such as India, Thailand, South Africa and Chile as well as China with its extensive territories. The signs suggest that demand for solar power will remain strong in the coming year but with a greater emphasis on low prices. Without focusing on markets with relatively high prices such as Japan, it will be relatively difficult to push for price increases in the industry chain.

==> picture [368 x 204] intentionally omitted <==

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

Unit: GW
2014
2013
Japan
Other Japan Other
Germany
China
China
Germany U.S.
U.S.
----- End of picture text -----

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Comparison of the top 4 global PV markets in 2013 and 2014

The Solar Power Industry in Taiwan

The solar power system installation market in Taiwan: The MOEA Bureau of Energy boosted the solar power promotion target to 210 MW this year (2014). This is an increase of 20% on the 175 MW in the previous year.

Risks for Taiwanese Solar Power cell manufacturers: The U.S. Department of Commerce was slated to issue its preliminary anti-subsidy judgment for "new anti-dumping and anti-subsidy duties" on March 28, 2014. This has been pushed back to June 2, 2014. This means that the timetable for the "new anti-dumping and anti-subsidy duties" will be pushed back as well, reducing the impact on the cross-strait PV industry for the year. This translates into more time during 2014 for increasing prices and looking for ways to compensate for the potential impacts of the "new anti-dumping and anti-subsidy duties". The recovery of the global economy, strong demand from China and Japan, as well as geographic access means that Taiwanese companies should at least see an improvement due to better production utilization. This may even lead to a wave of additional capitalization. Nevertheless, the new U.S. anti-dumping and anti-subsidy investigation as well as the coming industry revolution due to government-led reforms to the industry will continue to have a short-term impact and long-term pressure on Taiwanese companies. This means they must be alert to these challenges even as they enjoy high growth during the year.

Global Wind Power Developments

In 2013, new global installed wind power capacity was estimated to be 34,321 MW, down 25.2% on the 45,877 MW from 2012. The decline was due to uncertainty over American wind power policy that impacted on developer confidence and led to a major decrease in new wind power installed capacity in the U.S. during 2013. New installed wind power capacity in the U.S. in 2013 was estimated to be just 1,500 MW, a slump of 88.3% compared to the 12,884 MW in 2012. The U.S. government may release a new wave of wind power subsidy proposals that will increase new installed wind power capacity again. In 2014, the global wind power

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market is expected to surpass the 2012 levels and continue to grow steadily from then on.

Global wind power market between 2008 ~ 2017

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

Global new
----- End of picture text -----

Source: MAKE Consulting, compiled by ITRI IEK (2013/12)

Offshore wind power currently accounts for a relatively small proportion of the overall wind power market. Compared to the terrestrial wind power market where growth is slowing, however, offshore wind power will grow at a faster rate in the future and increase its share of the overall market.

In 2012, new offshore wind power installed capacity was 1,409 MW, or 3.1% of the total wind power market. In 2013, new installed capacity was estimated to be 1,869 MW, an increase of 32.6% on 2012. Offshore wind power's proportion of the total wind power market increased to 5.5% as well. By 2017, new installed capacity is expected to grow to 5.6 GW with offshore wind power increasing its market share to 10.1%. Between 2013 and 2017, the CAGR will be 31.7%.

Many companies are now working on offshore wind turbines rated over 5 MW. Companies that have units in commercial operation include AREVA from France as well as Repower and BARD from Germany. Companies now in pilot trials include China's XEMC and Sinovel, Spain's Gamesa, Germany's Siemens, France's Aston and South Korea's Samsung Heavy Industries.

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Companies that are still in development include China's Haizhuang Windpower Equipment, Dong Fang Turbines, Goldwind and United Power, South Korea's STX and Hyundai Heavy Industries, Japan's Mitsubishi Heavy Industries and DSME, Spain's Gamesa and Denmark's Vestas.

Global offshore wind power market between 2007 ~ 2016

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Global new
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Source: MAKE Consulting, compiled by ITRI IEK (2013/12)

Terrestrial wind power accounts for over 90% of the global wind power market and is the mainstream market at the present. In 2012, new installed terrestrial wind power capacity was 44,467 MW, and accounted for 96.9% of the overall market. In 2013, new installed capacity was estimated to be 32,452 MW, down 27% from 2012 and its proportion of the overall wind power market reduced to 94.6% as well.

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Global terrestrial wind power market between 2008 ~ 2017

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Global new
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Source: MAKE Consulting, compiled by ITRI IEK (2013/12)

For 2014, China has, after two years of rigorous controls on new installed capacity as well as aggressive development on new power grids and using wind power for heating in winter, managed to increase the integration rate for wind power. The "abandoned wind" phenomenon (wind turbine installed but cannot be grid-connected for power generation) is now showing signs of improvement. The continued support for wind power devices under the "12th 5-Year Plan" means the terrestrial wind power market in China can expected steady growth to continue.

2013 Prospects for the world's top 5 terrestrial wind power markets

Unit: MW, %

Country China Germany India Canada U.S.

Source: MAKE Consulting, compiled by ITRI IEK (2013/12)

Generally speaking, the global terrestrial wind power market will grow steadily in the future and new installed capacity should remain between 47 ~ 50 GW per year between 2014 ~ 2017. The market in region will grow or decline at different rates however. In terms of market scale and future development potential, China offers the best prospects because the Chinese government continues to consider the development of wind power to be an important policy. The 12th 5-Year Plan has set clear installation targets so the continued development of large wind power sites and wind powered heating in winter will lead to the market's

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continued steady growth. Apart from China, other countries with favorable market prospects include Germany, India, Canada and Brazil.

(4) Industrial Application

Industrial automation

IMI Research pointed out that, despite the economic recession in some parts of Europe, steady economic growth in other regions around the world saw the global industrial automation industry grow from 159.8 billion USD to 200 billion USD between 2012 ~ 2015. The U.S. and the Asia-Pacific markets together accounted for 65% of all revenues.

Automation equipment includes programmable logic controller (PLC), machine vision, human-machine interface (HMI), motion control. I/O module, server and step drivers. The world's main automation system providers are concentrated in the U.S., Germany, Switzerland and Japan. They include Emerson, Honeywell and Rockwell in the U.S., Siemens in Germany, ABB in Switzerland as well as Omron, Mitsubishi and Yokogawa in Japan. Among these, Honeywell, Rockwell and Siemens are all customers that Sinbond has close links with.

Forrest & Sullivan noted that with the development of advanced technologies such as network communications and smart sensing as well as the support of national governments, future trends in industrial automation will be influenced by three key factors: energy efficiency, smart technology and emerging economic entities. The German Federal Government has proposed the Industry 4.0 concept and predicted that industrial automation technology is now evolving towards intelligence, networking and integration. This will in turn bring boundless opportunities for system equipment and semiconductor vendors within this ecosystem.

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Semiconductor equipment

SEMI estimated at the end of the year that the global semiconductor equipment market can expect revenues to reach 32 billion USD in 2013, a decrease of 13.3%; the global outlook for the semiconductor equipment market is very positive for 2014 and a growth of 23.2% is expected; market growth will continue through to 2015 and is estimated to be 2.4%. Taiwan, Korea and North America continue to the largest spenders on semiconductor equipment assets. Taiwan's capital expenditure is on track to be No. 1 for the 4th successive year.

Global semiconductor equipment expenditure

Semiconductor equipment encompasses front-end wafer process equipment and the back-end packaging & testing equipment. SEMI noted that wafer process equipment continues to generate the most equipment revenues but this is expected to be 25.1 billion USD in 2013, down 10.7%. The packaging equipment market is expected to decline by 22.1% to 2.4 billion USD while the testing equipment market is also expected to decline by 20.7% to 2.8 billion USD. The top three global vendors of semiconductor equipment are AMAT in the U.S., ASML in the Netherlands, and TEL in Japan. Sinbond has a close working relationship with ASML.

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The official merger of AMAT and TEL in 2013 gave it 25% of the world market.

The growth in demand from low to mid-end mobile communications and wearable devices has led semiconductor manufacturers to expand their investment in 16- and 20-nm high-end processing equipment. Semiconductor equipment B/B value in 2013 also tended to be greater than 1 so semiconductor manufacturers have their order books full. The Taiwanese government is continuing to push for higher rates of self-sufficiency on semiconductor equipment so the outlook is good for local semiconductor equipment suppliers.

(5) Consumer Electronics (Communication):

Consumer electronics encompass a wide range of fields. Sinbond is mainly involved with mobile phone and NB-related applications. The markets for these two industries are detailed below.

Global mobile phone industry

The global mobile market has been estimated to be 1.7 billion units in 2013 and 1.8 billion units in 2014. Shipments are growing at a rate of around 100 million units per year. Annual growth is estimated to be between 5 ~ 10%.

Estimatedglobal mobilephone shipments for 2010 ~ 2014 Unit: Million units	Estimatedglobal mobilephone shipments for 2010 ~ 2014 Unit: Million units	Estimatedglobal mobilephone shipments for 2010 ~ 2014 Unit: Million units	Estimatedglobal mobilephone shipments for 2010 ~ 2014 Unit: Million units	Estimatedglobal mobilephone shipments for 2010 ~ 2014 Unit: Million units	Estimatedglobal mobilephone shipments for 2010 ~ 2014 Unit: Million units
	2010	2011	2012	2013(e)	2014(f)
Global mobilephones	1,329	1,610	1,780	1,860	1,970
Global smartphones	280	450	680	992	1,280

Source: TRI, 2013/10

In terms of product type, the proportion of smart phones increased in 2011 and reached around 450 million units. As smart phones offered greater profit margins so service providers, hardware manufacturers and branded vendors all rushed to enter this market. The development of feature phones does not look as favorable as smart phones. Pressure from low-price smart phones means the market segment is rapidly shrinking. Since Motorala, HTC and Samsung entered the low to mid-end smart phone segment, feature phones will be replaced at an even faster rate in

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the future. The basic phone segment will depend on demand from emerging markets.

Global NB industry

The global NB market is estimated to be around 170 million units in 2013, down 14% on the previous year. In 2014, it slid even further to around 160 million units as well. The main reasons for the decline are the global economic weakness as well as substitution effect of tablet PCs.

Global NB and Tablet PC shipment estimates for 2010 - 2014 Unit: Million Units	Global NB and Tablet PC shipment estimates for 2010 - 2014 Unit: Million Units	Global NB and Tablet PC shipment estimates for 2010 - 2014 Unit: Million Units	Global NB and Tablet PC shipment estimates for 2010 - 2014 Unit: Million Units	Global NB and Tablet PC shipment estimates for 2010 - 2014 Unit: Million Units	Global NB and Tablet PC shipment estimates for 2010 - 2014 Unit: Million Units
	2010	2011	2012	2013(e)	2014(f)
NB	201	208	201	172	162
Tablet	17	62	113	172	206

Source: TRI, 2013/10

In terms of product trends, tablet PCs with touch control can be expected to gradually dominate the market.

4. Competition among main products

Our Company’s main products are connectors and cable assemblies used in electronic peripheral parts, opto-electronic parts, wireless communications parts, energy products, automotive industry and medical electronic parts. Listed or OTC companies that have a business portfolio similar to our Company include Foxlink, JPC, and BizLink. Our competitors' product portfolios are listed below:

Company Name	Main Products
Foxlink (2392)	Manufacture, sale and support of connectors, cables, batteries and power supply products for the information, communication, automation equipment, precision machinery and consumer electronic industries.
JPC (6197)	Manufacture, sale and support of connectors, cable assemblies and antennae
BizLink (3665)	The R&D, production and sale of parts, cable assemblies,connectors,wiringand opto-electronic

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Company Main Products Name component products for the computer, automotive, medical health, communication and solar power equipment industries.

Source: Compiled by Fubon Securities.

5.1.3. Technology & R&D:

• Our Company had already developed connectors for HDMI, DDR3, DDR4 and USB before 2014 and boosted our solar power-related development efforts. The Junction Box, PV Connector and Cable have now passed TUV and UL certification to international standards on solar power. Our Company’s investment subsidiary DigiO2 is also collaborating with the National Taiwan University Hospital Telecare Center on a telecare project. The latest portable nebulizer "Brezze® Nebulizer" has won an iF design award from Germany in 2013. In 2014, our Group allocated $351,754,000 to R&D, an increase of 1.55% on the previous year. R&D efforts are concentrated on electronic parts for IoT, warehouse automation equipment, robotics and smart family. During the 4th meeting of Board of Directors in 2014, approval was given to invest a further $150 million in DigiIO to give full support to the development of OEM and ODM products for telecare, portable electronic biomedical devices. The group expects to invest at least 300 Million NTD or at least 3% of revenues in R&D each year in the future.

5.1.4. Long and short-term business development plan:

1. Short-term business development plan:

2. (1) Short-term business direction:

   • A. R&D, integration and manufacture of various electronic parts: These include the manufacture of various cable assemblies, PCBA, LED backlight modules, wireless communication parts and integrated electronics parts. We have also successfully entered the automotive electronic parts, electronic medical device parts, green energy and industrial control instrumentation fields in recent years.

   • B. Distribution of electronic parts: These include distributing connectors from HRS of Japan, GPS modules, wireless antenna

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modules, and driver IC as well as the distribution and trading of other strategic electronic parts.

• C. Expand electronic parts business through strategic alliances and acquisitions: These include acquiring stakes in T-conn Precision and Comtek Electronics to become involved in the connector production and manufacture.

• D. Our Company hopes to provide customers with a one-stop shop for total solutions. In addition to aggressive development of new products and providing total solutions, we are also consolidating the resources of the group's investments through organizational reform and IT system integration in order to maximum their returns.

• (2) Important production and sales policies:

• A. Strategic alliances, mergers and acquisitions: Use strategic alliances, mergers or acquisitions to adapt to a fast changing industry and achieve rapid expansion.

• B. Continued performance improvements: Establish a functioning group performance evaluation department that will provide direct oversight over the operating performance of each business unit.

C. Development of niche products: Our Company’s production and sales have always attached high importance to the development of high-margin niche products. We have so far successfully developed electronic parts for automotive O2 sensors, aviation/maritime/automotive navigation systems, high-precision wireless communications U.FL wiring, electronic fetal movement counter, telecare platform, portable physiological signal device; high-end cable assemblies for X-ray machines, MRI machines, bone density testing machines, wind turbines, petrol pumps and CNC machines. We are also actively developing electronic parts for industrial control, industrial computers, electronic medical devices, solar power and wind power.

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  • D. Cultivation of iMAGIC industries: To keep up with industry trends, we are not only developing cabling and PCBA products for the Medical, Auto, Green, Industrial and Communication industries but also incorporating requirements from Internet-of-Things (IoT) to develop electronic parts for automated warehouse storage systems, robotics and smart grid systems. Our aim is to become a specialist supplier of electronic parts.

• Long-term business development plan:

• (1) Expand the strategic matrix (new customers for old products, new products for old customers, new products and new customers) to continue the pursuit of high growth.

• (2) Establish Strategy & Marketing as a dedicated unit under the Group's general administration division that will actively track market developments and future trends in order to identify the company's next-generation product.

• (3) Strategic alliance, mergers and acquisitions: Sinbond has been searching for strategic alliances or partners through various channels in recent years.

5.2. Market, Production and Sales:

5.2.1. Market analysis:

Unit: 1000 NTD

				Unit: 1000 NTD	Unit: 1000 NTD
Sales Region		FY 2013		FY 2014
		Amount	%	Amount	%
Domestic Sales		507,950	4.81	711,689	6.11
Export Sales	U.S.	959,021	9.08	1,216,713	10.45
	Europe	423,051	4.01	530,825	4.56
	China	6,940,726	65.76	7,152,919	61.44

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	Other	1,724,513	16.34	2,030,573	17.44
Total		10,555,261	100.00	11,642,719	100.00

5.2.2. Key product applications and production process:

Key Products	Key applications or functions	Production process
Electronic peripheral parts	Cables: PCMIA signal cable, computers & peripherals I/O cable, USB link cable, flat cable, barcode scanner I/O interface module, LCD flex board, LCD ultra-thin co-axial signal cable. Connectors: Various types of connectors used in network communications, computer peripherals and consumer electronic products. System products: Sweep receiver, USB pen drive, R&D and manufacture of service and consumer electronic products.	1. Cable trimming and stripping 2. Crimping 3. Assembly, stamping 4. Inspection 5. Packaging
Energy products	Manufacture and sale of power rectifier.
Wireless communica tions	Mobile phone link cable, mobile phone connector, wireless antenna, RFID.
Fiber communica tionsparts	Fiber optic connectors, LED, LCM, and high-frequency co-axial cable.
Other	Parts of automotive, medical health and industrial products.	1. SMT 2. Assembly 3. Inspection 4. Packaging

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5.2.3. Supply of key raw materials:

Material Name	Supplier	SupplyStatus
Connector	Hirose, NDK	Good, stable
Cable	Allwin, LTK, Amphenol	Good, stable

5.2.4. Names of customers that accounted for over 10% of total purchases or sales in any year within the last two years, their proportion of purchases and sales, and explanation for any changes:

1. Customers:

Unit: 1000 NTD

		FY 2013	FY 2013	FY 2013		FY 2014	FY 2014	FY 2014		FY 2015 Q1	FY 2015 Q1	FY 2015 Q1
Item	Name	Amount	Proportio n of Net Sales for the Year (%)	Relati onshi p to Publis her	Name	Amount	Proportio n of Net Sales for the Year (%)	Relati onshi p to Publis her	Name	Amount	Proportion of Net Sales as of Preceding Quarter this Year	Relati onshi p to Publis her
1	Symbol	408,118	3.87	None	Symbol	467,900	4.02	None	Beijing Etechwin Electric	147,632	4.91	None
2	Wistron Infocomm (Kunshan)	275,627	2.61	None	HONDA TSUSHIN KOGYO	461,457	3.96	None	Symbol	127,102	4.23	Non e
3	Other	9,871,516	93.52	-	Other	10,713,362	92.02	-	Other	2,731,599	90.86	-
	Net Sales	10,555,261	100.00	-	Net Sales	11,642,719	100.00	-	Net Sales	3,006,333	100.00	-

Reason for Change: Increase in HONDA TSUSHIN KOGYO sales was due to increase in customer demand.

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2. Suppliers:

Unit: 1000 NTD

		FY 2013	FY 2013			FY 2014	FY 2014			FY 2015 Q1	FY 2015 Q1
Item	Name	Amount	Proportio n of Net Purchases for the Year (%)	Relatio nship to Publish er	Name	Amount	Proportio n of Net Purchases for the Year (%)	Relatio nship to Publish er	Name	Amount	Proportion of Net Purchases as of Preceding Quarter this Year	Relation ship to Publish er
1	Hirose (Taiwan)	833,202	11.63	None	Hirose (Taiwan)	1,195,296	15.62	None	Hirose (Taiwan)	248,444	12.69	None
2	Hirose Electric (Shanghai )	799,136	11.15	None	Hirose Electric (Shanghai )	768,891	10.04	None	Hirose Electric (Shanghai )	202,040	10.32	None
3	Other	5,534,111	77.22	-	Other	5,689,526	74.34	-	Other	1,507,058	76.99	-
	Net Purchases	7,166,449	100.00	-	Net Purchases	7,653,713	100.00	-	Net Purchases	1,957,542	100.00	-

Reason for Change: Amount of purchases increased in 2014 due to increase in sales.

5.2.5. Production output and value in the last two years:

Unit: 1000 pcs, 1000 NTD

				Unit: 1000pcs,1000 NTD	Unit: 1000pcs,1000 NTD	Unit: 1000pcs,1000 NTD
Year By major product (or by department) Production Quality	2013			2014
	Productio n Capacity	Productio n Output	Production Value	Productio n Capacity	Productio n Output	Production Value
Cable Assembly	-	96,910	3,157,058	-	221,349	6,860,589
Connector	-	123,539	3,483,785	-	81,184	526,277
Other	-	4,794	32,693	-	7,344	525,145

Note 1: Production capacity refers to the quantity that can be produced using existing production operation under normal conditions after factoring in essential stoppages and days off.

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Note 2: If production lines for different products are inter-changeable then production capacity can be consolidated and noted accordingly.

Note 3: Our Company is a distributor for connector products and they are manufactured in-house.

5.2.6. Production and sales in the last two years:

Unit: 1000 pcs, 1000 units; 1000 NTD

					Unit: 1000pcs,1000 units;1000 NTD	Unit: 1000pcs,1000 units;1000 NTD	Unit: 1000pcs,1000 units;1000 NTD	Unit: 1000pcs,1000 units;1000 NTD
Year By major product (or by department) Production Quality	FY 2013				FY 2014
	Domestic Sales		Export Sales		Domestic Sales		Export Sales
	Quantity	V a l u e	Quantity	V a l u e	Quantity	V a l u e	Quantity	V a l u e
Cable	26,173	271,400	517,705	5,368,323	29,393	378,405	451,673	5,811,567
Connector	20,929	217,028	413,989	4,292,843	23,413	301,400	359,786	4,629,291
Other	1,883	19,522	37,239	386,145	2,479	31,884	38,094	490,172
Total	48,985	507,950	968,933	10,047,311	55,285	711,689	849,553	10,931,030

5.3. The number of employees as well as their average seniority, average age and

education distribution in the past two years and as of the date of publication:

March 31, 2015

				March 31,2015
	Year	2013	2014	As of March 31,2015
No. of Employees	Direct employee	1,800	2,711	2,721
	Indirect employee	1,709	1,664	1,651
	Total	3,509	4,375	4,372
Average Age		26.3	27.7	28.5
Average Seniority		2.5	2.7	2.8
Distribution of Academic Background	Post-Graduate	0.03%	0.0%	0.0%
	Graduate	1.85%	1.2%	1.2%
	College/University	24.96%	22.7%	22.7%
	High School	39.13%	38.6%	32.7%
	Below High School	34.03%	37.5%	43.4%
	Total	100.00%	100.00%	100.00%

5.4. Environmental expenditure:

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(1) Total amount of losses or punitive damages due to environmental pollution in the most recent year and as of this annual report’s date of publication: None.

(2) Future response strategies and potential costs:

1. Our Company does not produce wastewater or air pollution during production.

2. The cooling water used in chillers used by the factory during production are recycled. The cooling water is channeled to dedicated water towers and cooled before being recycled again.

3. Waste generated by our Company includes waste paper or stationery products from office workers as well as small amounts of wire ends from trimming processes on the production line. Our Company enforces waste recycling and sorting. General trash is disposed of by the Miaoli City Government while industrial waste is disposed by licensed contractors in accordance with the law.

4. Most raw materials are pre-processed by contractors before being shipped to our Company for assembly into the final product. The amount of industrial waste produced is therefore extremely limited and does not cause environmental pollution.

5.5. Labor relations:

• (1) The benefits, in-service education, training and retirement scheme for our employees as well as their actual implementation:

• All employees are enrolled in Labor Insurance and National Health Insurance:

All employees are enrolled by the company in Labor Insurance and National Health Insurance by the company from the day they start to protect their rights.

1. Group insurance:

Employees are enrolled in group insurance in accordance with our Company's insurance regulations. This encompasses life insurance, accident insurance, hospital cover and cancer insurance. The amount of insurance coverage varies according to position and nature of work. The insurance costs are fully funded by the company and employees incur no costs.

1. Employee housing:

2. 87 -

For the convenience of employees who live in other regions and to avoid the hassles of commuting, our Company has dormitories available for employees who need them.

1. Regular employee health exams:

Employees are important assets to the company and their health has a direct impact on productivity and family life. All personnel above the grade of manager at our Company can therefore undergo one health exam each year. For other employees, health exams are organized in accordance with the labor safety and health regulations.

1. Employee training:

To meet the Group targets for strategic development and equip employees with the skills they need for work, our Company offers a variety of learning methods and channels including: in-house training, domestic/foreign training, overseas study and book clubs.

1. Employee dividends:

Employees share in the profits from company growth to cultivate a high level of employee rapport and team spirit.

1. Employee Welfare Committee:

2. (1) Cash gifts and subsidies for weddings, funerals and celebrations.

3. (2) Regular employee holidays.

4. (3) Organization of various club activities to promote labor

communications and harmony.

• (4) Gifts of cash or goods for holidays, celebrations and birthdays.

(5) Discount programs with many merchants to provide employees with discounts and promotions.

• (6) Hospitalization, treatment and disaster assistance.

• (7) Employee in-service education scholarships.

• (8) Hosting of professional workshops at different times.

• Employee retirement scheme:

Retirement regulations have been defined in accordance with government regulations to take care of employees after their retirement. The company contributes a set proportion of their salary each month to their retirement fund.

1. Free parking:

Parking is difficult for the Taipei office. The company has paid for the rental of parking spaces for the free use of designated employees.

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• Employee maternity/paternity leave regulations that exceed the Labor Standards Act:

The company offers 61 days off for maternity leave where the legal requirement is 56 days. "Caregiver leave for seriously ill/injured parents or spouse" added that is superior to the Labor Standards. This leave is not required by law but to take care of employees, our Company allows employees to take up to 10 days off in both the first and second half of the year in the first year for "Caregiver leaver for seriously ill/injured parents or spouse". This gives them the time they need to make arrangements or look after their parents or their spouse in the event of a serious illness or injury.

(2) Losses due to labor disputes in the past year and as of the date of this annual report’s publication: None.

5.6. Important contracts:

Type of Contract	Party	Starting Date	Summary	Restrictions
Commitment to Honest Trading	A	2014.1.29~ Contract end date	We and Company A have committed ourselves to make honesty the basis of all mutual transactions. All forms of illegal behavior are banned including business bribery.	None
Supplier Contract	H	2014.8.14~ Contract end date	We are a part of the supply chain for Company H, a leadingconsumer	None

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			electronics product supplier. Supplier guidelines were also signed with CompanyH.
Confidentiality Agreement	P	2014.1.1~ Contract end date	Our Company is an OEM contractor for Company P, a large foreign medical company. A confidentiality agreement was signed to protect Company P's R&D info and our production know-how.	None
Commission Agreement	N	2013.10.8~ 2014.10.7	Distributor N mainly distributes industrial control BUproducts	None

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6. Financial Status

6.1. Condensed Balance Sheet, Integrated Income Statement, CPA Name and Comments:

6.1.1. IFRS Condensed Balance Sheet and Statement of Comprehensive Income:

Condensed Balance Sheet (IFRS and Consolidated)

Unit：NTD in thousand

Year Item	Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Financial data of ending date in current year on Mar. 31, 2015 （Reviewed Only）
		2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
C u r r e n t a s s e t s						6,295,025	6,768,638	7,949,062	8,034,324
F i x e d a s s e t s						1,598,775	1,554,838	1,539,336	1,314,103
Intangible assets						47,505	4,784	9,150	8,193
O t h e r a s s e t s						167,916	145,237	158,299	229,243
T o t a l a s s e t s						8,879,288	9,385,164	10,486,831	10,426,161
C u r r e n t liabilities	B e f o r e distribution					4,063,787	4,126,418	4,795,863	4,541,325
	A f t e r distribution			IF~~R~~		4,416,828	4,583,294	Not yet	Not yet
N o n C u r r e n t l i a b i l i t i e s				S n		704,670	605,493	606,852	611,008
T o t a l liabilities	B e f o r e distribution		y	t e		4,768,457	4,731,911	5,402,715	5,152,333
	A f t e r distribution			~~t~~a~~d~~		5,121,498	5,188,787	Not yet	Not yet
Equity Attributable t o t h e p a r e n t c o m p a n y			p	ote		3,972,644	4,572,456	5,019,057	5,210,995
C ap i t a l s t o c k						2,065,638	2,076,709	2,076,709	2,079,563
C ap i t a l s u rp l u s						848,735	797,621	746,795	756,229
Retained e a r n i n g s	B e f o r e distribution					1,308,193	1,601,051	1,936,291	2,174,952
	A f t e r distribution					955,152	1,144,175	Not yet	Not yet
O t h e r Eq u i t i e s						(249,922)	97,075	259,262	200,251
Treasury Stocks						-	-	-	-
N on- cont ro ll in g i n t e r e s t s						138,187	80,797	65,059	62,833
T o t a l e q u i t y	B e f o r e distribution					4,110,831	4,653,253	5,084,116	5,273,828
	A f t e r distribution					3,757,790	4,196,377	Not yet	Not yet

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Condensed Balance Sheet (IFRS and Parent)

		Unit：NTD in thousand	Unit：NTD in thousand	Unit：NTD in thousand	Unit：NTD in thousand	Unit：NTD in thousand	Unit：NTD in thousand	Unit：NTD in thousand	Unit：NTD in thousand
Year Item		Five-Year Financial Summary							Financial data of ending date in current year on Mar. 31, 2015 （N o P a r e n t Company’s Reports）
		2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
C u r r e n t a s s e t s						1,436,435	1,687,250	2,157,908	N.A.
F i x e d a s s e t s						280,904	266,597	283,533	N.A.
Intangible assets						-	-	-	N.A.
O t h e r a s s e t s						23,877	20,627	22,754	N.A.
T o t a l a s s e t s						6,056,686	7,041,112	7,963,782	N.A.
C u r r e n t liabilities	B e f o r e distribution			IF		1,402,245	1,892,807	2,369,698	N.A.
	After distribution			~~R~~S		1,755,286	2,349,683	Not yet	N.A.
N o n C u r r e n t l i a b i l i t i e s				ot		681,797	575,849	575,027	N.A.
T o t a l liabilities	B e f o r e distribution			et a		2,084,042	2,468,656	2,944,725	N.A.
	After distribution			o		2,437,083	2,925,532	Not yet	N.A.
Equity Attributable t o t h e p a r e n t c o m p a n y				ted		3,972,644	4,572,456	5,019,057	N.A.
C a p i t a l s t o c k						2,065,638	2,076,709	2,076,709	N.A.
C ap i t a l s u r p l u s						848,735	797,621	746,795	N.A.
Retained e a r n i n g s	B e f o r e distribution					1,308,193	1,601,051	1,936,291	N.A.
	After distribution					955,152	1,144,175	Not yet	N.A.
O t h e r E q u i t i e s						(249,922)	97,075	259,262	N.A.
Treasury Stocks						-	-	-	N.A.
N on- cont ro ll in g i n t e r e s t s						-	-	-	N.A.
T o t a l e q u i t y	B e f o r e distribution					3,972,644	4,572,456	5,019,057	N.A.
	After distribution					3,619,603	4,115,580	Not yet	N.A.

• 92 -

Condensed Statement of Comprehensive Income (IFRS and Consolidated)

Unit：NTD in thousand

Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Financial data of ending date in current year on Mar. 31, 2015 （Reviewed Only）
	2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
Operating revenue					10,011,618	10,555,261	11,642,719	3,006,333
G r o s s p r o f i t					2,152,815	2,268,093	2,530,400	675,009
I n c o m e f r o m o p e r a t i o n s					689,402	732,998	950,590	265,218
Non-operating income a n d e x p e n s e s					35,619	134,046	92,932	54,557
N e t i n c o m e b e f o r e t a x					725,021	867,044	1,043,522	319,775
I n c o m e f r o m o p e r a t i o n s o f c o n t i n u e d segments - after tax		IFRS~~n~~			479,051	608,426	774,947	236,981
Income or Loss from d i s c o n t i n u e d d e p a r t m e n t s		ot ye			-	-	-	-
Net income(loss)		~~a~~			479,051	608,426	774,947	236,981
O t h e r c o m p r e h e n s i v e income/loss (Net of t a x )		dopted			(101,421)	319,823	163,618	(59,557)
T o t a l o t h e r c o m p r e h e n s i v e income (loss), net of t a x					377,630	928,249	938,565	177,424
N e t i n c o m e a t t r i b u t a b l e t o stockholders of the p a r e n t					548,495	663,263	793,752	238,661
N e t i n c o m e a t t r i b u t a b l e t o n o n - c o n t ro l l i n g i n t e r e s t s					(69,444)	(54,837)	(18,805)	(1,680)
C o m p r e h e n s i v e i n c o m e ( l o s s ) a t t r i b u t a b l e t o stockholders of the p a r e n t					468,382	992,896	954,303	179,650

• 93 -

Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Financial data of ending date in current year on Mar. 31, 2015 （Reviewed Only）
	2010	2011	2012 （Audited）	2013 （Audited）	2014 （Audited）
C o m p r e h e n s i v e i n c o m e ( l o s s ) a t t r i b u t a b l e t o n o n - c o n t ro l l i n g i n t e r e s t s			(90,752)	(64,647)	(15,738)	(2,226)
Earnings per share			2.93	3.20	3.82	1.15

Condensed Statement of Comprehensive Income (IFRS and Parent)

Unit：NTD in thousand

Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Financial data of ending date in current year on Mar. 31, 2015 （N o P a r e n t Company’s Reports）
	2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
Operating revenue					2,405,583	3,041,504	3,946,131	N.A.
G r o s s p r o f i t					536,678	687,572	814,569	N.A.
I n c o m e f r o m o p e r a t i o n s					81,724	168,101	272,749	N.A.
Non-operating income a n d e x p e n s e s					553,209	625,448	667,406	N.A.
N e t i n c o m e b e f o r e t a x		IFR			634,933	793,549	940,155	N.A.
I n c o m e f r o m o p e r a t i o n s o f c o n t i n u e d segments - after tax		not ye			548,495	663,263	793,752	N.A.
Income or Loss from d i s c o n t i n u e d d e p a r t m e n t s		~~t~~ado~~p~~			-	-	-	N.A.
Net income(loss)		t~~e~~			548,495	663,263	793,752	N.A.
O t h e r c o m p r e h e n s i v e income/loss (Net of t a x )	d	d			(80,113)	329,633	160,551	N.A.

• 94 -

Year Item	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Five-Year Financial Summary	Financial data of ending date in current year on Mar. 31, 2015 （N o P a r e n t Company’s Reports）
	2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
T o t a l o t h e r c o m p r e h e n s i v e income (loss), net of t a x					468,382	992,896	954,303	N.A.
N e t i n c o m e a t t r i b u t a b l e t o stockholders of the p a r e n t			IFRS no		-	-	-	N.A.
N e t i n c o m e a t t r i b u t a b l e t o n o n - c o n t ro l l i n g i n t e r e s t s		y	~~t~~et ad		-	-	-	N.A.
C o m p r e h e n s i v e i n c o m e ( l o s s ) a t t r i b u t a b l e t o stockholders of the p a r e n t	p	p	ted		-	-	-	N.A.
C o m p r e h e n s i v e i n c o m e ( l o s s ) a t t r i b u t a b l e t o n o n - c o n t ro l l i n g i n t e r e s t s					-	-	-	N.A.
Earnings per share					2.93	3.20	3.82	N.A.

6.1.2. Auditors’ Opinions from 2010 to 2014:

Year	CPA Firm	CPA's Name	Auditing Opinion
2010	Ernst & Young	Lin, Hong-Kuang Tu, Ching-Yuan	Modified Unqualified
2011	Ernst & Young	Yan, Wen-Pi Tu, Ching-Yuan	Modified Unqualified
2012	Ernst & Young	Yan, Wen-Pi Tu, Ching-Yuan	Modified Unqualified
2013	Ernst & Young	Yan, Wen-Pi Tu, Ching-Yuan	Modified Unqualified
2014	Ernst & Young	Yan, Wen-Pi Lin, Hong-Kuang	Modified Unqualified

• 95 -

6.2. Financial Analysis of the Last Five Years:

6.2.1. Financial Analysis:

	Year Item	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial data of ending date in current year on Mar. 31, 2015 （Reviewed Only）
		2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
Financial structure (%)	Ratio of liabilities to assets					53.70	50.42	51.52	49.42
	Ratio of long-term capital to fixed assets					290.99	321.56	349.93	423..32
Solvency (%)	Current ratio					154.91	164.03	165.75	176.92
	Quick ratio					115.25	123.72	121.24	131.80
	Times interest earned ratio					12.90	24.39	26.71	34.76
Operating ability	Accounts receivable turnover(turns)					3.71	3.59	3.76	3.75
	Average collection period					98	102	97	97
	Inventory turnover (turns)			IF		4.66	4.96	4.93	4.74
	Accounts payable turnover(turns)		~~n~~	S		5.03	4.77	4.78	4.92
	Average days in sales		o	t		78	74	74	77
	Fixed assets turnover (turns)		~~y~~e	t		5.95	6.69	7.53	8.43
	Total assets turnover (turns)		o	d		1.13	1.12	1.17	1.15
Profitabili- ty	Return on total assets (%)		e	t		6.08	7.00	8.14	2.34
	Return on stockholders' equity (%)					12.58	13.88	15.92	4.58
	Pre-tax income to issued capital(%)					36.25	41.75	50.25	15.40
	Profit ratio (%)					4.78	5.76	6.66	7.88
	Earnings per share ($)					2.93	3.20	3.82	1.15
Cash flow	Cash flow ratio (%)					14.52	21.31	12.84	5.53
	Cash flow adequacy ratio (%)					64.73	68.03	95.85	120.13
	Cash reinvestment ratio (%)					5.06	7.36	1.40	4.27
Leverage	Operating leverage					3.17	3.13	2.69	2.46

• 96 -

	Year Item	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial data of ending date in current year on Mar. 31, 2015 （Reviewed Only）
		2010	2011	2012 （Audited）	2013 （Audited）	2014 （Audited）
	Financial leverage			1.10	1.05	1.04	1.04

	Year Item	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial data of ending date in current year on Mar. 31, 2015 （No Parent Company’s Reports）
		2010		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）
Financial structure (%)	Ratio of liabilities to assets					34.41	35.06	36.98	N.A.
	Ratio of long-term capital to fixed assets					1,605.44	1,841.15	1,770.18	N.A.
Solvency (%)	Current ratio					102.44	89.14	91.06	N.A.
	Quick ratio					81.39	73.41	75.60	N.A.
	Times interest earned ratio			I~~F~~		25.88	49.97	45.73	N.A.
Operating ability	Accounts receivable turnover(turns)			RS		3.68	3.44	3.72	N.A.
	Average collection period			ot		99	106	98	N.A.
	Inventory turnover (turns)			et		7.15	8.03	9.48	N.A.
	Accounts payable turnover(turns)			do		4.62	3.95	3.82	N.A.
	Average days in sales			te		51	45	39	N.A.
	Fixed assets turnover (turns)			~~d~~		8.69	11.11	14.35	N.A.
	Total assets turnover (turns)					0.42	0.46	0.53	N.A.
Profitabili- ty	Return on total assets (%)					11.38	12.36	10.81	N.A.
	Return on stockholders' equity (%)					15.18	15.52	16.55	N.A.
	Pre-tax income to issued capital (%)					30.74	38.21	45.27	N.A.
	Profit ratio (%)					22.80	21.81	20.11	N.A.
	Earnings per share ($)					2.93	3.20	3.82	N.A.

• 97 -

	Year Item	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial analysis in the past five years (IFRS and Parent)	Financial data of ending date in current year on Mar. 31, 2015 （No Parent Company’s Reports）
		2010	2011	2012 （Audited）	2013 （Audited）	2014 （Audited）
Cash flow	Cash flow ratio (%)			(8.93)	18.50	6.90	N.A.
	Cash flow adequacy ratio (%)			66.06	48.55	35.17	N.A.
	Cash reinvestment ratio (%)			(9.01)	(1.23)	(6.17)	N.A.
	Operating leverage			5.59	3.65	2.85	N.A.
Leverage	Financial leverage			1.55	1.13	1.08	N.A.

6.3. Supervisor or Auditor Audit Report of Financial Statements in the Last Year:

SUPERVISOR’S REVIEW REPORT

The Board of Directors has prepared the Company’s 2014 Financial
Statements. The CPA firm of Ernst & Young, by CPA Yan, Wen-Pi and Lin,
Hong-Kuang, 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 2014 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.

Supervisor: Lin, Min-Cheng

          Chiu, Te-Chen
          Liang, Jun-Xing
March 31, 2015

• 98 -

6.4. Financial Statements in the Last Year (including CPA audit reports, cross-reference of balance sheets of two years, integrated income statements, equipment change list, case flows list, and remarks or tables):

AUDIT REPORT OF INDEPENDENT ACCOUNTANTS

English Translation of a Report Originally Issued in Chinese

To SINBON Electronics Co., Ltd.

We have audited the accompanying consolidated balance sheets of SINBON Electronics Co., Ltd. and subsidiaries (collectively, the “Company”) as of December 31, 2014, and December 31, 2013, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and cash flows for the years ended December 31, 2014 and 2013. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. Certain subsidiaries, which were accounted for under the consolidated statements based on the financial statements of the subsidiaries, were audited by other independent accountants. The relevant assets of these consolidated subsidiaries audited by other accountants amounted to NT$1,599,071 thousand, and NT$1,768,912 thousand, which represented 15.25%, and 18.85% of the total consolidated assets of the Company as of December 31, 2014 and 2013, respectively; total revenues amounted to NT$2,726,302 thousand and NT$2,918,197 thousand, which represented 23.42% and 27.65% of the consolidated revenues of the Company for the years ended December 31, 2014 and 2013, respectively. Certain investments, which were accounted for under the equity method based on the financial statements of the investees, were audited by other independent accountants. Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT$401,167 thousand and NT$399,066 thousand, which represented 3.83% and 4.25% of the total consolidated assets as of December 31, 2014 and 2013, respectively; the related shares of investment income from the associates and joint ventures amounted to NT$31,660 thousand and NT$21,437 thousand, which represented 3.03% and 2.47% of the consolidated income from continuing operations before income tax for the years ended December 31, 2014 and 2013, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$8,412 thousand and NT$22,183 thousand, which represented 5.14% and 6.94% of the consolidated total comprehensive income (loss) for the years ended December 31, 2014 and 2013, respectively; are based solely on the reports of other independent accountants.

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

• 99 -

In our opinion, based on our audits and the reports of other independent accountants, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for the years ended December 31, 2014 and 2013, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards, interpretations developed by the International Financial Reporting Interpretations Committee which are endorsed by Financial Supervisory Commission of the Republic of China.

We have audited and expressed a modified unqualified opinion on the parent company only financial statements of SINBON Electronics Co., Ltd. for the years ended December 31, 2014 and 2013.

Ernst & Young

Taiwan Republic of China

March 13, 2015

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.

• 100 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2014 and 2013

(Expressed in Thousand New Taiwan Dollars)

Assets	Notes	As of December 31,	As of December 31,
		Amount $2,412,474 45,349 399,250 2,820,962 120,518 1,936,312 198,331 15,866 7,949,062 175,446 205,275 419,921 1,539,336 9,150 30,342 158,299 2,537,769 2014	Amount $1,879,453 4,000 331,897 2,675,008 124,412 1,629,228 104,406 20,234 6,768,638 254,001 211,454 418,037 1,554,838 4,784 28,175 145,237 2,616,526 2013
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss, current Notes receivable, net Accounts receivable, net Other receivables Inventories Prepayments Other current assets Total current assets Non-current assets Available-for-sale financial assets, noncurrent Financial assets measured at cost, noncurrent Investments accounted for under the equity method Property, plant and equipment Other intangible assets Deferred tax assets Other assets Total non-current assets	4,6(1) 4,6(2) 4,6(3) 4,6(4) 4,6(5) 4,6(6) 4,6(7) 4,6(8) 4,6(9) 4,6(22) 4,6(10)

(Continued)

$10,486,831

$9,385,164

Total assets

• 101 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(Continued) December 31, 2014 and 2013

(Expressed in Thousand New Taiwan Dollars)

Liabilities and Equity Current liabilities Short-term loans Financial liabilities at fair value through profit or loss, current Notes payable Accounts payable Other payables Current tax liabilities Current portion of long-term bank loans Other current liabilities Total current liabilities Non-current liabilities Financial liabilities at fair value through profit or loss, noncurrent Bonds payable Long-term loans Deferred tax liabilities Long-term deferred revenue Accrued pension liabilities Other liabilities-others Total non-current liabilities Total liabilities Equity attributable to the parent company Common stock 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 on available-for-sale financial assets Subtotal Non-controlling interests Total equity Total liabilities and equity	Notes	As of December 31,	As of December 31,
		Amount $1,842,548 27,802 24,672 2,090,145 659,623 108,533 - 42,540 4,795,863 1,950 288,440 12,166 208,535 19,402 76,357 2 606,852 5,402,715 2,076,709 746,795 552,022 134,446 1,249,823 1,936,291 203,424 55,838 259,262 65,059 5,084,116 $10,486,831 2014	Amount $1,330,911 13,449 1,155 1,915,835 580,501 68,860 182,000 33,707 4,126,418 - - 346,460 165,479 19,184 74,368 2 605,493 4,731,911 2,076,709 797,621 485,695 249,922 865,434 1,601,051 64,705 32,370 97,075 80,797 4,653,253 $9,385,164 2013
	4,6(11) 4,6(12) 7 4,6(14) 6(12) 4,6(13) 4,6(14) 4,6(22) 4,6(15) 4,6(16) 6(17) 6(17) 6(22) 4 4,6(17)

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

• 102 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2014 and 2013

(Expressed in Thousand New Taiwan Dollars, Except Earnings Per Share)

Notes Operating revenues 4,6(18) Operating costs 6(19),7 Gross profit-net Operating expenses 6(19),7 Sales and marketing expenses General and administrative expenses Research and development expenses Subtotal Operating income Non-operating income and expenses 6(20) Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures 4,6(8) Subtotal Income from continuing operations before income tax Income tax expense 4,6(22) Net income Other comprehensive income (loss) 6(21) Exchange differences on translation of foreign operations Unrealized loss on available-for-sale financial assets Actuarial loss on defined benefit plans Share of other comprehensive income of associates and joint ventures Income tax related to components of other comprehensive income Total other comprehensive income (loss), net of tax Total comprehensive income Net income attributable to: 4,6(23) Stockholders of the parent Non-controlling interests Comprehensive income (loss) attributable to: Stockholders of the parent Non-controlling interests Earnings per share (NTD) Earnings per share-basic 4,6(23) Earnings per share-diluted	Notes	For theyears ended December 31,	For theyears ended December 31,
		$11,642,719 (9,112,319) 2,530,400 (615,205) (612,851) (351,754) (1,579,810) 950,590 111,765 (9,244) (40,581) 30,992 92,932 1,043,522 (268,575) 774,947 169,561 15,056 (1,971) 8,412 (27,440) 163,618 $938,565 $793,752 (18,805) $774,947 $954,303 (15,738) $938,565 $3.82 $3.79 2014	2013
			$10,555,261 (8,287,168)
			2,268,093
			(605,388) (583,321) (346,386)
			(1,535,095)
			732,998
			154,837 (6,441) (37,075) 22,725
			134,046
			867,044 (258,618)
			608,426
			170,153 178,192 (20,921) 22,183 (29,784)
			319,823
			$928,249
			$663,263 (54,837)
			$608,426
			$992,896 (64,647)
			$928,249
			$3.20
			$3.19

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

• 103 -

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

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2014 and 2013

(Expressed in Thousands of New Taiwan Dollars)

Appropriation and distribution of 2012 retained earnings Legal reserve Special reserve Cash dividends Payable Bonds with attached warrents Share of changes in net assets of associates and joint ventures accounted for using equity method Capital surplus- Cash dividends Net income in 2013 Other comprehensive income (loss), net of tax in 2013 Total comprehensive income (loss) Bonds convert to stock Increase in non-controlling interests Appropriation and distribution of 2013 retained earnings Legal reserve Special reserve Cash dividends Share of changes in net assets of associates and joint ventures accounted for using equity method Capital surplus- Cash dividends Net income in 2014 Other comprehensive income (loss), net of tax in 2014 Total comprehensive income (loss) Balance as of January 1, 2013 Balance as of December 31, 2013 Balance as of January 1, 2014 Balance as of December 31, 2014				EquityAttributable to theparent company	EquityAttributable to theparent company		Total $3,972,644 - - (353,041) 11,240 (53) (62,301) 663,263 329,633 992,896 11,071 - $4,572,456 $4,572,456 - - (456,876) 11,475 (62,301) 793,752 160,551 954,303 $5,019,057	Non- Controlling Interests $138,187 (54,837) (9,810) (64,647) 7,257 $80,797 $80,797 (18,805) 3,067 (15,738) $65,059	Total Equity
	Common stock $2,000,155 - 76,554 - $2,076,709 $2,076,709 - $2,076,709	Certificates of Bond-to-Stock Conversion $65,483 - (65,483) - $- $- - $-	Additional Paid-in Capital $848,735 11,240 (53) (62,301) - $797,621 $797,621 11,475 (62,301) - $746,795		Special Reserve Unappropriated Earnings $178,457 $698,790 (54,749) 71,465 (71,465) (353,041) 663,263 (17,364) - 645,899 $249,922 $865,434 $249,922 $865,434 (66,327) (115,476) 115,476 (456,876) 793,752 (1,636) - 792,116 $134,446 $1,249,823 Retained earnings	Exchange Differences on Translation of Foreign Operations Unrealized Gains or Losses on Available- For-Sale Financial Assets $(83,476) $(166,446) 148,181 198,816 148,181 198,816 $64,705 $32,370 $64,705 $32,370 138,719 23,468 138,719 23,468 $203,424 $55,838 Other components of equity
				Legal Reserve $430,946 54,749 - $485,695 $485,695 66,327 - $552,022	Special Reserve $178,457 71,465 - $249,922 $249,922 (115,476) - $134,446	Exchange Differences on Translation of Foreign Operations $(83,476) 148,181 148,181 $64,705 $64,705 138,719 138,719 $203,424
									$4,110,831 - - (353,041) 11,240 (53) (62,301) 608,426 319,823
									928,249
									11,071 7,257
									$4,653,253
									$4,653,253 - - (456,876) 11,475 (62,301) 774,947 163,618
									938,565
									$5,084,116

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

• 104 -

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 December 31, 2014 and 2013

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation Amortization Interest expense Bad debt reversal Interest revenue Share of profit of associates and joint ventures Loss on disposal of property, plant and equipment Gain (loss) from market value decline, obsolete and slow-moving of inventories Loss on disposal of investments Gain on disposal of investments Impairment loss on financial assets Loss of financial assets at fair value through profit or loss Gain of financial assets at fair value through profit or loss Changes in operating assets and liabilities: Increase in financial asset held for trading Increase in notes receivable Increase in accounts receivable Decrease (increase) in other receivables Increase in inventories, net Increase in prepayments Decrease (increase) in other current assets Increase in other noncurrent assets Increase in notes payable Increase in accounts payable Increase in other payables Increase (decrease) in other current liabilities Increase (decrease) in accrued pension liabilities Cash generated from operations Interest received Interest paid Income tax paid Net cash provided by operating activities	For theyears ended December 31,	For theyears ended December 31,
	2014 $1,043,522 167,884 60,009 40,581 (2,250) 15,051 (30,992) 22,663 (14,284) 607 (14,076) 343 20,901 (21,915) (27,304) (67,353) (143,704) 3,894 (292,800) (93,925) 4,368 (72,532) 23,517 174,310 71,419 8,833 18 876,785 (15,051) (30,721) (215,451) 615,562	2013
		$867,044 169,643 66,077 37,075 (16,896) 6,754 (22,725) 4,243 (6,433) - - 71,031 1,284 (87,931) (4,000) (59,592) (88,582) (25,833) (47,667) (32,988) (13,829) (41,423) 519 290,467 90,343 (14,723) (857)
		1,141,001
		(6,754) (38,035) (216,924)
		879,288

(Continued)

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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 December 31, 2014 and 2013

(Expressed in Thousands of New Taiwan Dollars)

	For theyears ended	December 31,
	2014	2013
Cash flows from investing activities:
Acquisition of property, plant and equipment	$(165,117)	$(92,543)
Proceeds from disposal of property, plant and equipment	18,295	26,061
Increase in other intangible assets	(4,366)	(2,450)
Decrease in investments accounted for under the equity method	20,000	20,000
Decrease in financial assets measured at cost	5,893	5,000
Acquisition of financial assets measured at cost	-	(19,789)
Proceeds from disposal of available-for-sale financial assets	107,667	44,443
Dividends received from investee company	21,083	13,177
Net cash Provided by (used in) investing activities	3,455	(6,101)
Cash flows from financing activities:
Decrease (Increase) in short-term loans	511,637	(208,052)
Decrease in long-term loanss (include current portion)	(516,294)	(175,901)
Increase in bonds payable	300,000	-
Cash dividends	(519,177)	(415,342)
Decrease in long-term deferred revenue	(423)	(410)
Increase non-controlling interests	-	7,257
Net cash used in financing activities	(224,257)	(792,448)
Effect of exchange rate changes on cash and cash equivalents	138,261	98,325
Net increase in cash and cash equivalents	533,021	179,064
Cash and cash equivalents at beginning of period	1,879,453	1,700,389
Cash and cash equivalents at end of period	$2,412,474	$1,879,453

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

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2014 and 2013

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. HISTORY AND ORGANIZATION

SINBON Electronics Co., Ltd. (the Company) was incorporated in 1989. The main activities of the Company include manufacturing and selling computer peripherals, connectors, wires and other parts. The shares of the Company commenced trading on Taiwan’s Over-the-Counter Market in May 2001 and were listed on the Taiwan Stock Exchange in August 2002.

The number of employees of the Company and its subsidiaries (“the Group”) for the years ended December 31, 2014 and 2013 were 5,219 and 4,753, respectively.

1. DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE

The consolidated financial statements of the Group for the years ended December 31, 2014 and 2013 were authorized for issue by the Company’s board of directors (the Board) on March 13, 2015.

1. Newly issued or revised standards and interpretations

2. (1) International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended, which are recognized by Financial Supervisory Commission (“FSC”) and would be applicable for annual periods beginning on or after 1 January 2015, but not yet adopted by the Group at the date of issuance of the Group’s financial statements are listed below.

(a) Improvements to International Financial Reporting Standards (issued in 2010):

IFRS 1 “First-time Adoption of International Financial Reporting Standards”

The annual improvements to International Financial Reporting Standards (“IFRS”) issued in 2010 made the following amendments to IFRS 1: If a first-time adopter changes its accounting policies or its use of the exemptions in IFRS 1 after it has published an interim financial report, it needs to explain those changes and update the reconciliations between previous GAAP and IFRS in accordance with paragraph 23 of IFRS 1.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Furthermore, the amendment allows first-time adopters to use an event-driven fair value as deemed cost, even if the event occurs after the date of transition, but before the first IFRS financial statements are issued. The amendment also expands the scope of ‘deemed cost’ for property, plant and equipment or intangible assets to include items used subject to rate regulated activities. The exemption will be applied on an item-by-item basis. All such assets will also need to be tested for impairment at the date of transition. The amendment allows entities with rate-regulated activities to use the carrying amount of their property, plant and equipment and intangible balances from their previous GAAP as its deemed cost upon transition to IFRS. These amendments became effective for annual periods beginning on or after 1 January 2011.

IFRS 3 “Business Combinations”

Under the amendment, IFRS 3 (as revised in 2008) do not apply to contingent consideration that arose from business combinations whose acquisition dates precede the application of IFRS 3 (as revised in 2008). Furthermore, the amendment limits the scope of the measurement choices for non-controlling interest. Only the components of non-controlling interests that are present ownership interests that entitle their holders to a proportionate share of the entity’s net assets, in the event of liquidation could be measured at either fair value or at the present ownership instruments’ proportionate share of the acquiree’s identifiable net assets. Other components of non-controlling interest are measured at their acquisition date fair value.

The amendment also requires an entity in a business combination to account for the replacement of the acquiree’s share-based payment transactions (when the acquirer is not obliged to do so) as new share-based payment awards in the post-combination financial statements.

Outstanding share-based payment transactions that the acquirer does not exchange for its share-based payment transactions: if vested — they are part of non-controlling interest; if unvested — they are measured at market based value as if granted at acquisition date, and allocated between NCI and post-combination expense.

These amendments became effective for annual periods beginning on or after 1 July 2010.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 7 “Financial Instruments: Disclosures”

The amendment emphasizes the interaction between quantitative and qualitative disclosures and the nature and extent of risks associated with financial instruments. The amendment became effective for annual periods beginning on or after 1 January 2011.

IAS 1 “Presentation of Financial Statements”

The amendment clarifies that an entity will present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity or in the notes to the financial statements. The amendment became effective for annual periods beginning on or after 1 January 2011.

IAS 34 “Interim Financial Reporting”

The amendment clarifies that if a user of an entity's interim financial report have access to the most recent annual financial report of that entity, it is unnecessary for the notes to an interim financial report to provide relatively insignificant updates to the information that was reported in the notes in the most recent annual financial report. Furthermore the amendment adds disclosure requirements around disclosures of financial instruments and contingent liabilities/assets. The amendment is effective for annual periods beginning on or after 1 January 2011.

IFRIC 13 “Customer Loyalty Programmes”

The amendment clarifies that when the fair value of award credits is measured based on the value of the awards for which they could be redeemed, the amount of discounts or incentives otherwise granted to customers not participating in the award credit scheme is to be taken into account. The amendment is effective for annual periods beginning on or after 1 January 2011.

• (b) IFRS 1 “First-time Adoption of International Financial Reporting Standards” — Limited Exemption from Comparative IFRS 7 Disclosures for First-time

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Adopters

IFRS 1 has been amended to allow first-time adopters to utilize the transitional provisions of IFRS 7 Financial Instruments: Disclosures. These provisions give relief from providing comparative information in the disclosures required by amendments to IFRS 1 in the first year of application. The amendment is effective for annual periods beginning on or after 1 July 2010.

• (c) IFRS 1 “First-time Adoption of International Financial Reporting Standards” — Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters

The amendment has provided guidance on how an entity should resume presenting IFRS financial statements when its functional currency ceases to be subject to severe hyperinflation. The amendment also removes the legacy fixed dates in IFRS 1 relating to derecognition and day one gain or loss transactions. The amended standard has these dates coinciding with the date of transition to IFRS. The amendment is effective for annual periods beginning on or after 1 July 2011.

(d) IFRS 7 “Financial Instruments: Disclosures” (Amendment)

The amendment requires additional quantitative and qualitative disclosures relating to transfers of financial assets, when financial assets are derecognised in their entirety, but the entity has a continuing involvement in them, or financial assets are not derecognised in their entirety. The amendment is effective for annual periods beginning on or after 1 July 2011.

(e) IAS 12 “Income Taxes” — Deferred Taxes: Recovery of Underlying Assets

The amendment to IAS 12 introduce a rebuttable presumption that deferred tax on investment properties measured at fair value will be recognized on a sale basis, unless an entity has a business model that would indicate the investment property will be consumed in the business. The amendment also introduces the requirement that deferred tax on non-depreciable assets measured using the revaluation model in IAS 16 should always be measured on a sale basis. As a result of this amendment, SIC 21 Income Taxes — Recovery of Revalued Non-Depreciable Assets has been withdrawn. The amendment is effective for annual periods beginning on or after 1 January 2012.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(f) IFRS 10 “Consolidated Financial Statements”

IFRS 10 replaces the portion of IAS 27 that addresses the accounting for consolidated financial statements and SIC-12. The changes introduced by IFRS 10 primarily relate to the elimination of the perceived inconsistency between IAS 27 and SIC-12 by introducing a new integrated control model. That is, IFRS 10 primarily relates to whether to consolidate another entity, but does not change how an entity is consolidated. The standard is effective for annual periods beginning on or after 1 January 2013.

(g) IFRS 11 “Joint Arrangements”

IFRS 11 replaces IAS 31 and SIC-13. The changes introduced by IFRS 11 primarily relate to increase comparability within IFRS by removing the choice for jointly controlled entities to use proportionate consolidation, so that the structure of the arrangement is no longer the most important factor when determining the classification as a joint operation or a joint venture, which then determines the accounting. The standard is effective for annual periods beginning on or after 1 January 2013.

(h) IFRS 12 “Disclosures of Interests in Other Entities”

IFRS 12 primarily integrates and makes consistent the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities and presents those requirements in a single IFRS. The standard is effective for annual periods beginning on or after 1 January 2013.

(i) IFRS 13“Fair Value Measurement”

IFRS 13 primarily relates to defining fair value, setting out in a single IFRS a framework for measuring fair value and requiring disclosures about fair value measurements to reduce complexity and improve consistency in application when measuring fair value. However, IFRS 13 does not change existing requirements in other IFRS as to when the fair value measurement or related disclosure is required. The standard is effective for annual periods beginning on or after 1

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

January 2013.

• (j) IAS 1 “Presentation of Financial Statements” — Presentation of Items of Other Comprehensive Income

The amendments to IAS 1 change the grouping of items presented in Other Comprehensive Income. Items that would be reclassified (or recycled) to profit or loss in the future would be presented separately from items that will never be reclassified. The amendment is effective for annual periods beginning on or after 1 July 2012.

(k) IAS 19 “Employee Benefits” (Revised)

The revision includes: (1) For defined benefit plans, the ability to defer recognition of actuarial gains and losses (i.e., the corridor approach) has been removed. Actuarial gains and losses are now recognized in Other Comprehensive Income. (2) Amounts recorded in profit or loss are limited to current and past service costs, gains or losses on settlements, and net interest income (expense). (3) New disclosures include quantitative information about the sensitivity of the defined benefit obligation to a reasonably possible change in each significant actuarial assumption. (4) Termination benefits will be recognized at the earlier of when the offer of termination cannot be withdrawn, or when the related restructuring costs are recognized under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, etc.. The revised standard is effective for annual periods beginning on or after 1 January 2013.

(l) IFRS 1 “First-time Adoption of International Financial Reporting Standards” — Government Loans

The IASB has added an exception to the retrospective application of IFRS 9 (or IAS 39) and IAS 20. These amendments require first-time adopters to apply the requirements of IAS 20 prospectively to government loans existing at the date of transition to IFRS. However, entities may choose to apply the requirements of IFRS 9 (or IAS 39, as applicable) and IAS 20 to government loans retrospectively if the information needed to do so had been obtained at the time of initially accounting for those loans. The amendment is effective for annual periods

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

beginning on or after 1 January 2013.

• (m) IFRS 7 “Financial Instruments: Disclosures” — Disclosures — Offsetting Financial Assets and Financial Liabilities

These amendments require an entity to disclose information about rights of set-off and related arrangements. The disclosures would provide users with information that is useful in evaluating the effect of netting arrangements on an entity’s financial position. The new disclosures are required for all recognized financial instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or ‘similar agreement’. The amendment is effective for annual periods beginning on or after 1 January 2013.

(n) IAS 32 “Financial Instruments: Presentation” — Offsetting Financial Assets and Financial Liabilities

The amendment clarifies the meaning of “currently has a legally enforceable right to set-off” in IAS 32. The amendment is effective for annual periods beginning on or after 1 January 2014.

(o) IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine”

This Interpretation applies to waste removal (stripping) costs incurred in surface mining activity, during the production phase of the mine. If the benefit from the stripping activity will be realized in the current period, an entity is required to account for the stripping activity costs as part of the cost of inventory. When the benefit is the improved access to ore, the entity recognizes these costs as a non-current asset (“stripping activity asset”), only if certain criteria are met. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset. The interpretation is effective for annual periods beginning on or after 1 January 2013.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (p) Improvements to International Financial Reporting Standards (2009-2011 cycle):

IFRS 1 “First-time Adoption of International Financial Reporting Standards”

The amendment clarifies that an entity that has stopped applying IFRS may choose to either: Re-apply IFRS 1, even if the entity applied IFRS 1 in a previous reporting period; or Apply IFRS retrospectively in accordance with IAS 8 (i.e., as if it had never stopped applying IFRS) in order to resume reporting under IFRS. The amendment is effective for annual periods beginning on or after 1 January 2013.

IAS 1 “Presentation of Financial Statements”

The amendment clarifies the difference between voluntary additional comparative information and the minimum required comparative information. Generally, the minimum required comparative period is the previous period. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The additional comparative period does not need to contain a complete set of financial statements. The opening statement of financial position (known as ’the third balance sheet’) must be presented when an entity changes its accounting policies (making retrospective restatements or reclassifications) and those changes have a material effect on the statement of financial position. The opening statement would be at the beginning of the preceding period. However, unlike the voluntary comparative information, the related notes are not required to include comparatives as of the date of the third balance sheet. The amendment is effective for annual periods beginning on or after 1 January 2013.

IAS 16 “Property, Plant and Equipment” (Amendment)

The amendment clarifies that major spare parts and servicing equipment that meet the definition of property, plant and equipment are not inventory. The amendment is effective for annual periods beginning on or after 1 January 2013.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IAS 32 “Financial Instruments: Presentation” (Amendment)

The amendment removes existing income tax requirements from IAS 32 and requires entities to apply the requirements in IAS 12 to any income tax arising from distributions to equity holders. The amendment is effective for annual periods beginning on or after 1 January 2013.

IAS 34 “Interim Financial Reporting” (Amendment)

The amendment clarifies the requirements in IAS 34 relating to segment information for total assets and liabilities for each reportable segment to enhance consistency with the requirements in IFRS 8 Operating Segments. Besides, total assets and liabilities for a particular reportable segment need to be disclosed only when the amounts are regularly provided to the chief operating decision maker and there has been a material change in the total amount disclosed in the entity’s previous annual financial statements for that reportable segment. The amendment is effective for annual periods beginning on or after 1 January 2013.

(q) IFRS 10 “Consolidated Financial Statements” (Amendment)

The Investment Entities amendments provide an exception to the consolidation requirements in IFRS 10 and require investment entities to measure particular subsidiaries at fair value through profit or loss, rather than consolidate them. The amendments also set out disclosure requirements for investment entities. The amendment is effective for annual periods beginning on or after 1 January 2014.

The abovementioned standards and interpretations issued by IASB and recognized by FSC so that they are applicable for annual periods beginning on or after 1 January 2015. Apart from item (h) to (k) which would affect the presentation of financial statements and increase the level of disclosure in the financial reports, the remaining standards and interpretations have no material impact on the Group.

• (2) Standards or interpretations issued by IASB but not yet recognized by FSC at the date of issuance of the Group’s financial statements are listed below.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) IAS 36 “Impairment of Assets” (Amendment)

This amendment relates to the amendment issued in May 2011 and requires entities to disclose the recoverable amount of an asset (including goodwill) or a cash-generating unit when an impairment loss has been recognized or reversed during the period. The amendment also requires detailed disclosure of how the fair value less costs of disposal has been measured when an impairment loss has been recognized or reversed, including valuation techniques used, level of fair value hierarchy of assets and key assumptions used in measurement. The amendment is effective for annual periods beginning on or after 1 January 2014.

(b) IFRIC 21 “Levies”

This interpretation provides guidance on when to recognize a liability for a levy imposed by a government (both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain). The interpretation is effective for annual periods beginning on or after 1 January 2014.

(c) IAS 39 “Financial Instruments: Recognition and Measurement” (Amendment)

Under the amendment, there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met. The interpretation is effective for annual periods beginning on or after 1 January 2014.

(d) IAS 19 “Employee Benefits” (Defined benefit plans: employee contributions)

The amendments apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments is to provide a policy choice for a simplified accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary. The amendment is effective for annual periods beginning on or after 1 July 2014.

• (e) Improvements to International Financial Reporting Standards (2010-2012 cycle):

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 2 “Share-based Payment”

The annual improvements amend the definitions of 'vesting condition' and 'market condition' and adds definitions for 'performance condition' and 'service condition' (which were previously part of the definition of 'vesting condition'). The amendment prospectively applies to share-based payment transactions for which the grant date is on or after 1 July 2014.

IFRS 3 “Business Combinations”

The amendments include: (1) deleting the reference to "other applicable IFRSs" in the classification requirements; (2) deleting the reference to "IAS 37 Provisions, Contingent Liabilities and Contingent Assets or other IFRSs as appropriate", other contingent consideration that is not within the scope of IFRS 9 shall be measured at fair value at each reporting date and changes in fair value shall be recognized in profit or loss; (3) amending the classification requirements of IFRS 9 Financial Instruments to clarify that contingent consideration that is a financial asset or financial liability can only be measured at fair value, with changes in fair value being presented in profit or loss depending on the requirements of IFRS 9. The amendments apply prospectively to business combinations for which the acquisition date is on or after 1 July 2014.

IFRS 8 “Operating Segments”

The amendments require an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments. The amendments also clarify that an entity shall only provide reconciliations of the total of the reportable segments' assets to the entity's assets if the segment assets are reported regularly. The amendment is effective for annual periods beginning on or after 1 July 2014.

IFRS 13 “Fair Value Measurement”

The amendment to the Basis for Conclusions of IFRS 13 clarifies that when deleting paragraph B5.4.12 of IFRS 9 Financial Instruments and paragraph AG79 of IAS 39 Financial Instruments: Recognition and Measurement as consequential amendments from IFRS 13 Fair Value Measurement, the IASB did not intend to change the measurement requirements for short-term receivables and payables.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IAS 16 “Property, Plant and Equipment”

The amendment clarifies that when an item of property, plant and equipment is revalued, the accumulated depreciation at the date of revaluation is adjusted to equal the difference between the gross carrying amount and the carrying amount of the asset. The amendment is effective for annual periods beginning on or after 1 July 2014.

IAS 24 “Related Party Disclosures”

The amendment clarifies that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity. The amendment is effective for annual periods beginning on or after 1 July 2014.

IAS 38 “Intangible Assets”

The amendment clarifies that when an intangible asset is revalued, the accumulated amortization at the date of revaluation is adjusted to equal the difference between the gross carrying amount and the carrying amount of the asset. The amendment is effective for annual periods beginning on or after 1 July 2014.

• (f) Improvements to International Financial Reporting Standards (2011-2013 cycle):

IFRS 1 “First-time Adoption of International Financial Reporting Standards”

The amendment clarifies that an entity, in its first IFRS financial statements, has the choice between applying an existing and currently effective IFRS or applying early a new or revised IFRS that is not yet mandatorily effective, provided that the new or revised IFRS permits early application.

IFRS 3 “Business Combinations”

This amendment clarifies that paragraph 2(a) of IFRS 3 Business Combinations excludes the formation of all types of joint arrangements as defined in IFRS 11 Joint Arrangements from the scope of IFRS 3; and the scope exception only applies to the financial statements of the joint venture or the joint operation itself. The amendment is effective for annual periods beginning on or after 1 July 2014.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 13 “Fair Value Measurement”

The amendment clarifies that paragraph 52 of IFRS 13 includes a scope exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis. The objective of this amendment is to clarify that this portfolio exception applies to all contracts within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9 Financial Instruments, regardless of whether they meet the definitions of financial assets or financial liabilities as defined in IAS 32 Financial Instruments: Presentation. The amendment is effective for annual periods beginning on or after 1 July 2014.

IAS 40 “Investment Property”

The amendment clarifies the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property or owner-occupied property; in determining whether a specific transaction meets the definition of both a business combination as defined in IFRS 3 Business Combinations and investment property as defined in IAS 40 Investment Property, separate application of both standards independently of each other is required. The amendment is effective for annual periods beginning on or after 1 July 2014.

(g) IFRS 14 “Regulatory Deferral Accounts”

IFRS 14 permits first-time adopters to continue to recognize amounts related to rate regulation in accordance with their previous GAAP requirements when they adopt IFRS. However, to enhance comparability with entities that already apply IFRS and do not recognize such amounts, the Standard requires that the effect of rate regulation must be presented separately from other items. IFRS 14 is effective for annual periods beginning on or after 1 January 2016.

• (h) IFRS 11 “Joint Arrangements” (Accounting for Acquisitions of Interests in Joint Operations)

The amendments provide new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business. The amendments require the entity to apply all of the principles on business combinations accounting in IFRS 3 “Business Combinations”, and other IFRS (that do not conflict with the guidance in IFRS 11), to the extent of its share in a joint operation acquired. The amendment also requires certain disclosure. The amendment is effective for annual periods beginning on or after 1 January 2016.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (i) IAS 16“Property, Plant and Equipment and IAS 38 “Intangible Assets” — Clarification of Acceptable Methods of Depreciation and Amortization

The amendment clarified that the use of revenue-based methods to calculate depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset, such as selling activities and change in sales volumes or prices. The amendment also clarified that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. This presumption, however, can be rebutted in certain limited circumstances. The amendment is effective for annual periods beginning on or after 1 January 2016.

(j) IFRS 15 “Revenue from Contracts with Customers”

The core principle of the new Standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new Standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. The Standard is effective for annual periods beginning on or after 1 January 2017.

• (k) IAS 16“Property, Plant and Equipment and IAS 41 “Agriculture” — Agriculture: Bearer Plants

The IASB decided that bearer plants should be accounted for in the same way as property, plant and equipment in IAS 16 Property, Plant and Equipment, because their operation is similar to that of manufacturing. Consequently, the amendments include them within the scope of IAS 16, and the produce growing on bearer plants will remain within the scope of IAS 41. The amendment is effective for annual periods beginning on or after 1 January 2016.

(l) IFRS 9“Financial Instruments”

The IASB has issued the final version of IFRS 9, which combines classification and measurement, the expected credit loss impairment model and hedge accounting. The standard will replace IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9 Financial Instruments (which include standards issued on classification and measurement of financial assets

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

and liabilities and hedge accounting).

Classification and measurement: Financial assets are measured at amortized cost, fair value through profit or loss, or fair value through other comprehensive income, based on both the entity’s business model for managing the financial assets and the financial asset’s contractual cash flow characteristics. Financial liabilities are measured at amortized cost or fair value through profit or loss. Furthermore there is requirement that ‘own credit risk’ adjustments are not recognized in profit or loss.

Impairment: Expected credit loss model is used to evaluate impairment. Entities are required to recognize either 12-month or lifetime expected credit losses, depending on whether there has been a significant increase in credit risk since initial recognition.

Hedge accounting: Hedge accounting is more closely aligned with risk management activities and hedge effectiveness is measured based on the hedge ratio.

The new standard is effective for annual periods beginning on or after 1 January 2018.

• (m) IAS 27“Separate Financial Statements” — Equity Method in Separate Financial Statements

The IASB restored the option to use the equity method under IAS 28 for an entity to account for investments in subsidiaries and associates in the entity’s separate financial statements. In 2003, the equity method was removed from the options. This amendment removes the only difference between the separate financial statements prepared in accordance with IFRS and those prepared in accordance with the local regulations in certain jurisdictions.

The amendment is effective for annual periods beginning on or after 1 January 2016.

• (n) IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full. IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture. The amendment is effective for annual periods beginning on or after 1 January 2016.

• (o) Improvements to International Financial Reporting Standards (2012-2014 cycle):

IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”

The amendment clarifies that a change of disposal method of assets (or disposal groups) from disposal through sale or through distribution to owners (or vice versa) should not be considered to be a new plan of disposal, rather it is a continuation of the original plan. The amendment also requires identical accounting treatment for an asset (or disposal group) that ceases to be classified as held for sale or as held for distribution to owners. The amendment is effective for annual periods beginning on or after 1 January 2016.

IFRS 7 “Financial Instruments: Disclosures”

The amendment clarifies that a servicing contract that includes a fee can constitute continuing involvement in a financial asset and therefore the disclosures for any continuing involvement in a transferred asset that is derecognized in its entirety under IFRS 7 Financial Instruments: Disclosures is required. The amendment also clarifies that whether the IFRS 7 disclosure related to the offsetting of financial assets and financial liabilities are required to be included in the condensed interim financial report would depend on the requirements under IAS 34 Interim Financial Reporting. The amendment is effective for annual periods beginning on or after 1 January 2016.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IAS 19 “Employee Benefits”

The amendment clarifies the requirement under IAS 19.83, that market depth of high quality corporate bonds is assessed based on the currency in which the obligation is denominated, rather than the country where the obligation is located. The amendment is effective for annual periods beginning on or after 1 January 2016.

IAS 34 “Interim Financial Reporting”

The amendment clarifies what is meant by “elsewhere in the interim financial report” under IAS 34; the amendment states that the required interim disclosures must either be in the interim financial statements or incorporated by cross-reference between the interim financial statements and wherever they are included within the greater interim financial report. The other information within the interim financial report must be available to users on the same terms as the interim financial statements and at the same time. The amendment is effective for annual periods beginning on or after 1 January 2016.

(p) IAS 1 “Presentation of Financial Statements” (Amendment):

The amendments contain (1) clarifying that an entity must not reduce the understandability of its financial statements by obscuring material information with immaterial information or by aggregating material items that have different natures or functions. The amendments reemphasize that, when a standard requires a specific disclosure, the information must be assessed to determine whether it is material and, consequently, whether presentation or disclosure of that information is warranted, (2) clarifying that specific line items in the statement(s) of profit or loss and OCI and the statement of financial position may be disaggregated, and how an entity shall present additional subtotals, (3) clarifying that entities have flexibility as to the order in which they present the notes to financial statements, but also emphasize that understandability and comparability should be considered by an entity when deciding on that order, (4) removing the examples of the income taxes accounting policy and the foreign currency accounting policy, as these were considered unhelpful in illustrating what significant accounting policies could be, and (5) clarifying that the share of OCI of associates and joint ventures accounted for using the equity method must be presented in aggregate as a single line item, classified between those items that will or will not be subsequently reclassified to profit or loss. The amendment is effective for annual periods beginning on or after 1 January 2016.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (q) IFRS 10“Consolidated Financial Statements”, IFRS 12 “Disclosure of Interests in Other Entities”, and IAS 28“Investments in Associates and Joint Ventures” — Investment Entities: Applying the Consolidation Exception

The amendments contain (1) clarifying that the exemption from presenting consolidated financial statements applies to a parent entity that is a subsidiary of an investment entity when the investment entity measures all of its subsidiary at fair value, (2) clarifying that only a subsidiary that is not an investment entity itself and provides support services to the investment entity is consolidated when all other subsidiaries of an investment entity are measured at fair value, and (3) allowing the investor, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries. The amendment is effective for annual periods beginning on or after 1 January 2016.

The abovementioned standards and interpretations issued by IASB have not yet recognized by FSC at the date of issuance of the Group’s financial statements, the local effective dates are to be determined by FSC. The standards and interpretations have no material impact on the Group.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of Compliance

The consolidated financial statements of the Group for the years ended December 31 2014 and 2013 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”), IFRSs, IASs, IFRIC and SIC, which are endorsed by the FSC (collectively referred to as “TIFRSs”).

(2) Basis of Preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“$”) unless otherwise stated.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (3) General Description of Reporting Entities

Preparation principle of consolidated financial statements

Subsidiaries are fully consolidated from the date of acquisition (the date on which the Group obtains control), and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, and unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Company loses control of a subsidiary, it:

• (a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;

• (b) derecognizes the carrying amount of any non-controlling interest;

• (c)recognizes the fair value of the consideration received;

• (d) recognizes the fair value of any investment retained;

• (e) recognizes any surplus or deficit in profit or loss; and

• (f) reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The consolidated entities are as follows:

I n v e s t o r	S u b s i d i a r y	M a i n b u s i n e s s e s	Percentage of	ownership (%)
			2014.12.31	2013.12.31
The Company	Sinbon International Enterprise Co., Ltd.(SB(B.V.I))	Holding company	100.00%	100.00%
The Company	Hong Kong Sinbon Electronics Co., Ltd. (HKSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
The Company	Super Elite Ltd.(SEL)	Holdingcompany	64.48%	64.48%
The Company	Beijing Sinbon Electronics Co., Ltd. (BJSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
The Company	Samoa Smart and Diligent Co., Ltd. (Samoa S&D)	Holding company	51.51%	51.51%
The Company	Sinbon Technologies L.L.C. (USSB)	Selling a wide variety of connectors, wires and cables	51.00%	51.00%
The Company	Japan Sinbon Electronics Co., Ltd. (JPSB)	Selling a wide variety of connectors, wires and cables	70.00%	70.00%
The Company	Worldwide Wire Harnesses Co.,Ltd.	Holdingcompany	50.00%	50.00%
The Company	Kwan-Ze Corporation Ltd. (Kwan-Ze)	Selling a wide variety of electronic materials and holdingcompany	100.00%	100.00%
The Company	Sinbon USA L.L.C.	Logistic center	100.00%	-
The Company	Beijing Sinbon Tongan Electronics Co., Ltd.(BJSB Tongan)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
B V I	Jiangyin Sinbon Electronics Co., Ltd. (JYSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

I n v e s t o r	S u b s i d i a r y	M a i n b u s i n e s s e s	Percentage of	ownership (%)
			2014.12.31	2013.12.31
B V I	Shenzhen Sinbon Electronics Co., Ltd. (SZSB)	Selling a wide variety of connectors, wires and cables	100.00%	100.00%
B V I	Shanghai Sinbon Electronics Co., Ltd. (SHSB)	Selling a wide variety of connectors and cables	100.00%	100.00%
B V I	Tong Cheng Sinbon Electronics Co., Ltd . (TCSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
B V I	Sinact (Hong Kong) Co., Ltd. (HK Sinact)	Holding company	100.00%	100.00%
S E L	Hong Kong Comtek Electronics Co., Ltd.(HongKongCMK)	Selling a wide variety of connectors and cables	64.48%	64.48%
S E L	T-CONN Precision (Zhongshan) Co., Ltd.( T-CONN Zhongshan)	Manufacturing and selling a wide variety of connectors, wires and cables	64.48%	64.48%
S E L	T-CONN Precision Co., Ltd.( T-CONN)	Manufacturing and selling a wide variety of connectors, wires and cables	64.48%	64.48%
S E L	Super Progressive Ltd. (SPL)	Logistic center	64.48%	64.48%
H K S i n a c t	Jiangyin Sinact Electronics Co., Ltd. (JY Sinact)	Manufacturing and selling a wide variety of electronic materials	100.00%	100.00%
W o r l d w i d e Wire Harnesses Co.,Ltd.	Sinbon Technologies Tennessee L.L.C. (STT)	Logistic Center	50.00%	50.00%
K w a n - Z e	Digi O2 International Co., Ltd. (Digi O2)	Selling a wide variety of connectors and cables	85.48%	85.48%

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Foreign Currency Transactions

The Group’s consolidated financial statements are presented in NT$, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date. Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

• (a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.

• (b) Foreign currency items within the scope of IAS 39 Financial Instruments: Recognition and Measurement are accounted for based on the accounting policy for financial instruments.

• (c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(5) Translation of Foreign Currency Financial Statements

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following are accounted for as disposals even if an interest in the foreign operation is retained by the Group: the loss of control over a foreign operation, the loss of significant influence over a foreign operation, or the loss of joint control over a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or jointly controlled entity that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

• (6) Current and non-current distinction

An asset is classified as current when:

• (a) The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (b) The Group holds the asset primarily for the purpose of trading

• (c) The Group expects to realize the asset within twelve months after the reporting period

• (d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

• (a) The Group expects to settle the liability in its normal operating cycle

• (b) The Group holds the liability primarily for the purpose of trading

• (c) The liability is due to be settled within twelve months after the reporting period

• (d) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

• (7) Cash Equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (include fixed-term deposits that have maturities of 3 months from the date of acquisition).

(8) Financial Instruments

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

Financial assets and financial liabilities within the scope of IAS 39 Financial Instruments: Recognition and Measurement are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs..

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial Assets

The Group accounts for regular way purchase or sales of financial assets on the trade date.

Financial assets of the Group are classified as financial assets at fair value through profit or loss, held-to-maturity investments, available-for-sale financial assets and loans and receivables. The Group determines the classification of its financial assets at initial recognition.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. A financial asset is classified as held for trading if:

• i. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

• ii. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

• iii. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial asset at fair value through profit or loss; or a financial asset may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

• i. it eliminates or significantly reduces a measurement or recognition inconsistency; or

• ii. a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial assets at fair value through profit or loss are measured at fair value with changes in fair value recognized in profit or loss. Dividends or interests on financial assets at fair value through profit or loss are recognized in profit or loss (including those received during the period of initial investment). If financial assets do not have quoted prices in an active market and their fair value cannot be reliably measured, then they are classified as financial assets measured at cost on balance sheet and carried at cost net of accumulated impairment losses, if any, as at the reporting date.

Available-for-sale financial assets

Available-for-sale investments are non-derivative financial assets that are designated as available-for-sale or those not classified as financial assets at fair value through profit or loss, held-to-maturity financial assets, or loans and receivables.

Foreign exchange gains and losses and interest calculated using the effective interest method relating to monetary available-for-sale financial assets, or dividends on an available-for-sale equity instrument, are recognized in profit or loss. Subsequent measurement of available-for-sale financial assets at fair value is recognized in equity until the investment is derecognized, at which time the cumulative gain or loss is recognized in profit or loss.

If equity instrument investments do not have quoted prices in an active market and their far value cannot be reliably measured, then they are classified as financial assets measured at cost on balance sheet and carried at cost net of accumulated impairment losses, if any, as at the reporting date.

Held-to-maturity financial assets

Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention and ability to hold it to maturity, other than those that are designated as available-for-sale, classified as financial assets at fair value through profit or loss, or meet the definition of loans and receivables.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

After initial measurement held-to-maturity financial assets are measured at amortized cost using the effective interest method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or transaction costs. The effective interest method amortization is recognized in profit or loss.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than those that the Group upon initial recognition designates as available for sale, classified as at fair value through profit or loss, or those for which the holder may not recover substantially all of its initial investment.

Loans and receivables are separately presented on the balance sheet as receivables or bond investments for which no active market exists. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fee or transaction costs. The effective interest method amortization is recognized in profit or loss.

Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence that a financial asset other than the financial assets at fair value through profit or loss is impaired. A financial asset is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more loss events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows of the financial asset. The carrying amount of the financial asset impaired, other than receivables impaired which are reduced through the use of an allowance account, is reduced directly and the amount of the loss is recognized in profit or loss.

A significant or prolonged decline in the fair value of an available-for-sale equity instrument below its cost is considered a loss event.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Other loss events include:

• i significant financial difficulty of the issuer or obligor; or

• ii. a breach of contract, such as a default or delinquency in interest or principal payments; or

• iii. it becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

• iv. the disappearance of an active market for that financial asset because of financial difficulties.

For held-to-maturity financial assets and loans and receivables measured at amortized cost, the Group first assesses individually whether objective evidence of impairment exists individually for financial asset that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exits for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows. The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. Interest income is accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Receivables together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to profit or loss.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

In the case of equity investments classified as available-for-sale, where there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss - is removed from other comprehensive income and recognized in profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairment are recognized directly in other comprehensive income.

In the case of debt instruments classified as available-for-sale, the amount recorded for impairment is the cumulative loss measured as the difference between the amortized cost and the current fair value, less any impairment loss on that investment previously recognized in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recognized in profit or loss. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed through profit or loss.

Derecognition of financial assets

A financial asset is derecognized when:

• i. The rights to receive cash flows from the asset have expired

• ii. The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred

• iii. The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Compound instruments

The Group evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Group assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IAS 39 Financial Instruments: Recognition and Measurement.

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

Financial liabilities within the scope of IAS 39 Financial Instruments: Recognition and Measurement are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. A financial liability is classified as held for trading if:

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• i. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

• ii. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

• iii. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

• i. it eliminates or significantly reduces a measurement or recognition inconsistency; or

• ii. a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

If the financial liabilities at fair value through profit or loss do not have quoted prices in an active market and their far value cannot be reliably measured, then they are classified as financial liabilities measured at cost on balance sheet and carried at cost as at the reporting date.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(c)Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(d) Fair value of financial instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(9) Derivative financial instruments

The Group uses derivative financial instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss (held for trading) except for derivatives that are designated effective hedging instruments which are classified as derivative financial assets or liabilities for hedging.

Derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognized in equity.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss.

(10) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Cost is presented by all the essential expenditures incurred to the ready status as being sold or finished products. Materials, work in process and finished goods are calculated on the following bases:

Raw materials - Purchase cost on a first in, first out basis

Finished goods and work in progress - Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(11) Investments accounted for under the equity method

The Group’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence.

Under the equity method, the investment in the associate is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate. After the interest in the associate is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Unrealized gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s related interest in the associate.

When changes in the net assets of an associate occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Group’s percentage of ownership interests in the associate, the Group recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate on a pro-rata basis.

When the associate issues new stocks, and the Group’s interest in an associate is reduced or increased as the Group fails to acquire shares newly issued in the associate proportionately to its original ownership interest, the increase or decrease in the interest in the associate is recognized in Additional Paid in Capital and Investment in associate. When the interest in the associate is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

reclassified to profit or loss on a pro rata basis when the Group disposes the associate.

The financial statements of the associate are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired in accordance with IAS 39 Financial Instruments: Recognition and Measurement. If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets. In determining the value in use of the investment, the Group estimates:

• (a) Its share of the present value of the estimated future cash flows expected to be generated by the associate, including the cash flows form the operations of the associate and the proceeds on the ultimate disposal of the investment; or

• (b) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets.

Upon loss of significant influence over the associate, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss.

The Group recognizes its interest in the jointly controlled entities using the equity method other than those that meet the criteria to be classified as

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

held for sale. A jointly controlled entity is a joint venture that involves the establishment of a corporation, partnership or other entity.

(12) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 “Property, plant and equipment”. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Items Buildings Machinery and equipment Transportation equipment Office equipment Other equipment Leasehold improvements	Useful Lives
	5～50 years 3～10 years 5 years 3～10 years 2～15 years Lower of leasehold years or useful lives

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

(13) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

A summary of the policies applied to the Group’s intangible assets is as follows:

Useful lives Amortization method used Internally generated or acquired	Computer software
	1~5 years Amortized on a straight- line basis over the estimated useful life Acquired

(14) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(15) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Provision for decommissioning, restoration and rehabilitation costs

The provision for decommissioning, restoration and rehabilitation costs arose on construction of a property, plant and equipment. Decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognized as part of the cost of that particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is expensed as incurred and recognized as a finance cost. The estimated future costs of

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset.

Sales returns and allowances

A provision has been recognized for sales returns and allowances based on past experience and other known factors.

(16) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The following specific recognition criteria must also be met before revenue is recognized:

Sale of goods

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

• (a) the significant risks and rewards of ownership of the goods have transferred to the buyer;

• (b) neither continuing managerial involvement nor effective control over the goods sold have been retained;

• (c) the amount of revenue can be measured reliably;

• (d) it is probable that the economic benefits associated with the transaction will flow to the entity; and

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

Interest income

For all financial assets measured at amortized cost (including loans and receivables and held-to-maturity financial assets) and available-for-sale financial assets, interest income is recorded using the effective interest

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

rate method and recognized in profit or loss.

Dividends

Revenue is recognized when the Group’s right to receive the payment is established.

(17) Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(18) Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

Where the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(19) Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore fund assets are not included in the Group’s consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations. Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. The Group recognizes all actuarial gains and losses in the period in which they occur in other comprehensive income. Actuarial gains and losses recognized in other comprehensive income are recognized immediately in retained earnings.

(20) Income Tax

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The 10% income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred income tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

• (a) Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• (b) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

• (a) Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities 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.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(21) Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at acquisition date fair value. For each business combination, the acquirer measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and are classified under administrative expenses.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at the acquisition-date fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IAS 39 Financial Instruments: Recognition and Measurement either in profit or loss or as a change to other comprehensive income. However, if the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

Goodwill is initially measured as the amount of the excess of the aggregate of the consideration transferred and the non-controlling interest over the net fair value of the identifiable assets acquired and the liabilities assumed. If this aggregate is lower than the fair value of the net assets acquired, the difference is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purpose and is not larger than an operating segment before aggregation.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation disposed of and the portion of the cash-generating unit retained.

5. Significant accounting judgments, estimates and assumptions

The preparation of the Group’s consolidated financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the 。 asset or liability affected in future periods

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(1) Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flow model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Please refer to Note 6 for more details.

(3) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company's domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

6. Contents of significant accounts

• (1) Cash and cash equivalents

Cash and cash equivalents
As of December 31, 2014 2013 Cash on hand $11,453 $10,758 Demand deposits 2,391,000 1,868,149 Total 2,402,453 1,878,907 Add: Allowance for foreign exchange gains 10,021 546 Net amount $2,412,474 $1,879,453 Financial assets at fair value through profit or loss -Current As of December 31, 2014 2013 Held for trading: Derivatives not designated as hedging instruments Forward foreign exchange contracts $14,318 $ - Non-derivative financial assets Fund 31,324 4,000 Total 45,642 $4,000 Less: Adjustments for change in value of investment (293) - Net amount $45,349 $4,000	As of December 31,
	2014
	$11,453 2,391,000
	2,402,453 10,021
	$2,412,474

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

Financial assets held for trading were not pledged.

• (3) Notes receivables

Notes receivables
Notes receivables Less: allowance for doubtful debts Net amount	As of December 31,
	2014	2013 $331,897 - $331,897
	$399,250 -
	$399,250

Notes receivables were not pledged.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Trade receivables

Trade receivables
Trade receivables Less: allowance for doubtful debts Add: Allowance for foreign exchange gains Total Accounts receivable – related parties Net amount	As of December 31,
	2014	2013 $2,674,254 (6,150) 6,904 2,675,008 - $2,675,008
	$2,786,340 (12,253) 41,470
	2,815,557 5,405
	$2,820,962

Trade receivables were not pledged.

Trade receivables are generally on 60-120 day terms. The movements in the provision for impairment of trade receivables are as follows:

As of January 1, 2014 Charge/reversal for the current period Write off due to uncollection As of December 31 2014 As of January 1, 2013 Charge/reversal for the current period Write off due to uncollection As of December 31, 2013	Individually impaired	Collectively impaired	Total
	$ - - -	$6,150 8,353 (2,250)	$6,150 8,353 (2,250)
	$ -	$12,253	$12,253
	$ - - -	$27,311 (4,265) (16,896)	$27,311 (4,265) (16,896)
	$ -	$6,150	$6,150

Impairment loss that was individually determined for the years ended December 31, 2014 and 2013, arose due to the fact that the counterparty was in financial difficulties. The amount of impairment loss recognized was the difference between the carrying amount of the trade receivable and the present value of its expected recoverable amount. The Group does not hold any collateral for such trade receivables. There was no impairment loss of individually accounts receivable for the years ended December 31 2014 and 2013.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Ageing analysis of trade receivables and trade receivables-related parties that are past due as at the end of the reporting period but not impaired is as follows:

As of December 31,	Neither past due nor impaired		Past	due but not impaired	due but not impaired		Total
		<=30 days	31~60 days	61~90 days	91~120 days	>=121 days
2014 2013	$2,715,718 $2,561,856	$59,764 $68,340	$14,867 $23,985	$5,259 $6,867	$7,649 $7,589	$17,705 $6,371	$2,820,962 $2,675,008

(5) Inventories

Raw materials Supplies & parts Work in progress Finished goods Merchandise Total Less: allowance for inventory valuation losses Net amount	As of December 31, 2014 2013 $731,066 $662,494 7,282 5,940 142,280 92,972 489,043 529,166 636,080 402,378 2,005,751 1,692,950 (69,439) (63,722) $1,936,312 $1,629,228	As of December 31, 2014 2013 $731,066 $662,494 7,282 5,940 142,280 92,972 489,043 529,166 636,080 402,378 2,005,751 1,692,950 (69,439) (63,722) $1,936,312 $1,629,228
	2014 $731,066 7,282 142,280 489,043 636,080 2,005,751 (69,439) $1,936,312
		$662,494 5,940 92,972 529,166 402,378
		1,692,950 (63,722)
		$1,629,228

The inventory cost recognized as expenses for the years ended December 31, 2014 and 2013 were $9,112,319 and $8,287,168, respectively. The price reduction (recovery) of inventories related to cost of goods sold were $5,717 and (9,434).

Gain from price recovery of inventories was due to the deposited obsolete products and the net realized value recovery for the year ended December 31, 2013.

No inventories were pledged.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Available-for-sale financial assets

INPAQ Technology Co., Ltd. Add：Unrealized gain or loss on available -for-sale financial assets Less: accumulated impairment- available-for-sale financial assets Net amount	As of December 31,	As of December 31,
	2014 $168,381 15,056 (7,991) $175,446	2013 $ 266,656 - (12,655) $ 254,001

Available-for-sale financial assets were not pledged.

(7) Financial assets measured at cost

Financial assets at fair value through profit or loss Top Taiwan VII Venture Capital Co., Ltd. Top Taiwan III Venture Capital Co., Ltd. Top Taiwan II Venture Capital Co., Ltd. General Research Of Electronics Inc. Shanghai Guoshun Shimen Investment Center (limited partnership) Niigata Seimitsu Co., Ltd. Ultracap Technologies Co., Ltd. Dynahz Technologies Co., Ltd. Sintex Material Co., Ltd Bandrich, Inc. Argosy (Beijing) Technologies Co., Ltd. Actmax Technologies Inc. Taiwan B2C Co., Ltd. Total Less: accumulated impairment - financial assets measured at cost Net amount	As of December 31,	As of December 31,
	2014	2013 $60,750 50,000 45,000 23,184 19,789 13,460 12,667 6,150 4,500 4,125 2,264 1,441 1,500 244,830 (33,376) $211,454
	$60,750 50,000 40,000 23,184 20,450 13,460 12,667 6,150 4,500 4,125 2,398 1,441 -
	239,125 (33,850)
	$205,275

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The fair value of the above investments in unlisted entities are not reliably measurable as the variability in the range of reasonable fair value measurements is significant for the instrument and the probabilities of the various estimates within the range cannot be reasonably assessed and used when measuring fair value. Therefore these investments are measured at cost.

Financial assets measured at cost were not pledged.

(8) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Group:

Investees Investments in associates: Listed (OTC) company Argocy Research Inc. Non listed(OTC) company Top Taiwan IV Venture Capital Co., Ltd Korea Sinbon Electronics Co Ltd. Total	As of December 31,	As of December 31,	As of December 31,
	2014 Carrying amount Percentage of ownership (%) $227,449 20.82% 173,718 20.00% 18,754 37.50% $419,921	2013
	Carrying amount $227,449 173,718 18,754 $419,921	Carrying amount $214,785 184,281 18,971 $418,037	Percentage of ownership (%)
			20.90% 20.00% 37.50%

Share of profit or loss of associates and joint ventures were $30,992 and $22,725 for the years ended December 31, 2014 and 2013, respectively. Share of other comprehensive income of associates and joint ventures were $8,412 and $22,183 for the years ended December 31, 2014 and 2013, respectively.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The carrying amount of investments in the associates for which there are published price quotations amounted to $227,449 and $214,785 as of December 31, 2014 and 2013, respectively. The fair values of these investments were $319,326 and $229,215 as of December 31, 2014 and 2013, respectively.

No investment in the associate was pledged.

The following table illustrates summarized financial information of the Group’s investment in the associates:

Total assets (100%) Total liabilities (100%) Revenue (100%) Profit (loss) (100%)		As of December 31,
		2014
		2014
		$1,312,933 $150,742

(9) Property, plant and equipment

Cost: As of January 1, 2014 Additions Disposals Exchange differences Other changes As of December 31, 2014 As of January 1, 2013 Additions Disposals Exchange differences Other changes As of December 31, 2013	Land $114,547 32,429 - - - $146,976 $114,547 - - - - $114,547	Buildings $1,121,793 36,542 - 30,785 (493) $1,188,627 $1,068,922 2,733 (630) 46,163 4,605 $1,121,793	Machinery and equipment $969,685 52,661 (89,844) 18,085 2,196 $952,783 $918,307 51,166 (53,936) 53,812 336 $969,685	Office equipment $90,212 8,380 (9,874) 2,472 - $91,190 $92,599 9,148 (5,476) (7,279) 1,220 $90,212	Transportati on equipment	Other equipment $130,349 30,613 (7,268) 6,484 - $160,178 $109,751 23,578 (10,304) 4,935 2,389 $130,349	Leasehold improveme nts $124,300 - - 3,973 - $128,273 $117,733 - - 6,567 - $124,300	Construction in progress and equipment pending inspection $12,293 198 - (1,621) - $10,870 $10,481 1,637 (425) 600 - $12,293	Total
					$40,125 4,294 (1,471) (678) 785				$2,603,304 165,117 (108,457) 59,500 2,488
					$43,055				$2,721,952
					$25,566 4,281 (2,594) 12,872 -				$2,457,906 92,543 (73,365) 117,670 8,550
					$40,125				$2,603,304

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Depreciation and impairment: As of January 1, 2014 Depreciation Impairment losses Disposals Exchange differences Other changes As of December 31, 2014 As of January 1, 2013 Depreciation Impairment losses Disposals Exchange differences Other changes As of December 31, 2013 Net carrying amount as of December 31, 2014 2013	Land $ - - - - - - $ - $ - - - - - - $ - $146,976 $114,547	Buildings $357,648 46,903 - - 20,997 - $425,548 $290,163 43,802 - (24) 21,230 2,477 $357,648 $763,079 $764,145	Machinery and equipment $507,944 82,974 (5,252) (54,462) 34,531 - $565,735 $441,878 88,972 (8,958) (27,992) 14,044 - $507,944 $387,049 $461,741	Office equipment $65,577 8,821 - (7,165) (2,340) (1,329) $63,564 $56,542 10,035 - (4,658) 3,658 - $65,577 $27,626 $24,635	Transportati on equipment	Other equipment $69,873 17,464 - (5,465) (8,742) - $73,130 $48,427 15,040 - (8,887) 15,293 - $69,873 $87,048 $60,476	Leasehold improveme nts $24,071 5,552 - - 819 - $30,442 $17,642 5,512 - 134 783 - $24,071 $97,831 $100,229	Construction in progress and equipment pending inspection $- - - - - - $ - $ - - - - - - $- $10,870 $12,293	Total
					$23,353 6,170 - (1,393) (3,933) -				$1,048,466 167,884 (5,252) (68,485) 41,332 (1,329)
					$24,197				$1,182,616
					$4,479 6,282 - (2,432) 15,024 -				$859,131 169,643 (8,958) (43,859) 70,032 2,477
					$23,353				$1,048,466
					$18,858				$1,539,336
					$16,772				$1,554,838

Please refer to Note 8 for more details on property, plant and equipment under pledge.

There is no capitalization of interest due to purchase of property, plant and equipment

Components of building that have different useful lives are the main building structure and air conditioning, which are depreciated over 50 years and 25 years, respectively.

(10) Other non-current assets

Long-term prepaid rent Refundable deposits Prepayment for equipment Other long-term investment Other assets Total	As of December 31, 2014 2013 $46,187 $45,822 22,171 21,820 18,699 15,865 2,361 2,361 68,881 59,369 $158,299 $145,237	As of December 31, 2014 2013 $46,187 $45,822 22,171 21,820 18,699 15,865 2,361 2,361 68,881 59,369 $158,299 $145,237
	2014 $46,187 22,171 18,699 2,361 68,881 $158,299
		$45,822 21,820 15,865 2,361 59,369
		$145,237

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Long-term prepaid rents were payments for land use rights as of December 31, 2014 and 2013.

No other non-current assets was pledged.

(11) Short-term loans

As of December 31 2014 2013 Unsecured bank loans $1,842,548 $1,330,911 For the years ended December 31, 2014 2013 Interest rates 0.78% - 6.16% 1.00% - 6.57% due date 104/01/05 – 104/06/26 2014/01/09 – 2014/07/26	As of December 31 2014 2013 Unsecured bank loans $1,842,548 $1,330,911 For the years ended December 31, 2014 2013 Interest rates 0.78% - 6.16% 1.00% - 6.57% due date 104/01/05 – 104/06/26 2014/01/09 – 2014/07/26	As of December 31 2014 2013 $1,842,548 $1,330,911 ended December 31,	As of December 31 2014 2013 $1,842,548 $1,330,911 ended December 31,
	2014		2013
			1.00% - 6.57% 2014/01/09 – 2014/07/26

The Group’s unused short-term lines of credits amounted to $503,067 and $667,154 as of December 31, 2014 and 2013, respectively.

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

Held for trading: Derivatives not designated as hedging Instruments Forward foreign exchange contracts Embedded derivatives-bond Total Current Non-current Total	As of December 31,	As of December 31,
	2014 $27,802 1,950 $29,752 $27,802 1,950 $29,752	2013 $13,449 - $13,449 $13,449 - $13,449

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(13) Bonds payable

ds payable
Liability component: Principal amount Discounts on bonds payable Subtotal Less: current portion Net Embedded derivative Equity component	As of December 31,
	2014	2013 $ - - - - $- $- $-
	$300,000 (11,560)
	$288,440 -
	$288,440
	$1,950
	$11,475

Issuance of convertible bonds :

On June 23, 2014, the Company issued zero coupon unsecured convertible bonds. The terms of the convertible bonds were evaluated to include a liability component, embedded derivatives (a call option and a put option) and an equity component (an option for conversion into issuer’s ordinary shares). The terms of the bonds are as follows:

Issue amount: $300,000

Period: June 23, 2014 ~ June 23, 2017

Conversion price: NT$46.9

Redemption clauses:

The Company may redeem the bonds, in whole or in part, after 1 month of the issuance and prior to 40 days before the maturity date, at the principal amount of the bonds with an interest calculated at the rate of 0% per annum (early redemption conversion price) if the closing price of the Company’s ordinary shares on the Taiwan Stock Exchange (TWSE) for a period of 30 consecutive trading days, is at least 130% of the conversion price.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Long-term loans

Details of long-term loans as of December 31, 2014 and 2013 are as follows:

Lenders	As of December 31, 2014	Interest Rate(%)	Maturity date and terms of repayment
The Bank of Tokyo-Mitsubishi UFJ,Ltd The Bank of Tokyo-Mitsubishi UFJ,Ltd Total Lenders	$7,600 4,566	0.9% 0.9% Interest Rate(%)	Effective August 7, 2013 to July 9, 2018. Principal is repaid in 3 monthly payments with interest payments due monthly. Effective July 25, 2014 to July 7, 2017. Principal is repaid in 3 monthly payments with interest payments due monthly. Maturity date and terms of repayment
	$12,166
	As of December 31, 2013
DBS and seven lending institutions of syndicated credits The Bank of Tokyo-Mitsubishi UFJ,Ltd Subtotal Less: current portion Total	$518,000 10,460	90 day average short-term interest rate of Taiwan’s secondary market posted by Reuters + 1.2% floating rate 0.9%	Effective September 1, 2011 to September 1, 2016. Principal is repaid in 15 quarterly payments with interest payments due monthly. Effective August 7, 2013 to July 7, 2018. Principal is repaid in 3 year payments with interest payments due monthly.
	528,460 (182,000)
	$346,460

In September 2011,the Company has entered into a syndicated loan agreement with DBS and seven lending institutions of syndicated credits which contain the following restrictive covenants at each end of a quarter, the sixth month, and the year during the term of the loan:

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• i. The Current Ratio shall not be lower than 100%;

• ii. The Liability Ratio shall not be higher than 160%;

• iii. The Times of Interest Coverage shall not be lower than 4 times;

• iv. The Tangible Net Value shall not be less than 2.5 billion.

Certain land and buildings were pledged as first-lien security for secured bank loans with DBS and seven lending institutions of syndicated credits. Please refer to Note 8 for more details.

(15) Long-term Deferred Revenue

Beginning balance Amortization Exchange effect Ending Balance Deferred revenue - related to assets	For the years ended December 31, 2014 2013 $19,184 $18,512 (423) (410) 641 1,082 $19,402 $19,184 As of December 31,	For the years ended December 31, 2014 2013 $19,184 $18,512 (423) (410) 641 1,082 $19,402 $19,184 As of December 31,
	2014 $19,402	2013 $19,184

Government grants have been received for the purchase of certain items of property, plant and equipment. There are no unfulfilled conditions or contingencies attached to these grants.

• (16) Post-employment benefits

Defined contribution plan

The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company and its domestic subsidiaries have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Subsidiaries located in the People’s Republic of China will contribute social

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

welfare benefits based on a certain percentage of employees’ salaries or wages to the employees’ individual pension accounts.

Pension benefits for employees of overseas subsidiaries and branches are provided in accordance with the local regulations.

Expenses under the defined contribution plan for the years ended December 31, 2014 and 2013 were $14,113 and $13,593, respectively.

Defined benefits plan

The Company and its domestic subsidiaries adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries contribute an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee.

Pension costs recognized in profit or loss for the years ended December 31 2014 and 2013:

Current period service costs Interest cost Expected return on plan assets Past service cost Total	For the years ended December 31,	For the years ended December 31,
	2014	2013
	$2,203 2,652 (1,165) -	$1,944 1,626 (947) -
	$3,690	$2,623

The benefit expense under the defined benefits plan recognized in the statement of comprehensive income:

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Operating costs Selling expenses Administrative expenses Research and development expenses Total	For the years ended December 31,	For the years ended December 31,
	2014	2013
	$1,101 731 773 1,085	$735 547 549 792
	$3,690	$2,623

The cumulative amount of actuarial gains and losses recognized in other comprehensive income is as follows:

Balance as of January 1 Actuarial gains and losses for the period Balance as of December 31	2014	2013
	$(31,326) (1,971)	$(10,405) (20,921)
	$(33,297)	$(31,326)

Reconciliation of liability (asset) of the defined benefit plan is as follows:

Defined benefit obligation Plan assets at fair value Funded status Unrecognized past service cost Accrued pension liabilities recognized on the consolidated balance sheets	As of December, 31	As of December, 31
	2014	2013 $132,635 (58,267) 74,368 - $74,368
	$139,637 (63,280)
	76,357 -
	$76,357

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Changes in present value of the defined benefit obligation are as follows:

2014 Defined benefit obligation at January 1 $132,635 Current service cost 2,203 Interest cost 2,652 Benefits paid - Actuarial losses 2,147 Defined benefit obligation at December 31 $139,637 Changes in fair value of plan assets are as follows:	2013
	$108,409 1,944 1,626 - 20,656
	$132,635

Plan assets, at fair value at January 1 Expected return on plan assets Contributions by employer Benefits paid Actuarial losses Plan assets, at fair value at December 31	2014 $58,267 1,165 3,672 - 176 $63,280	2013
		$54,105 947 3,480 - (265)
		$58,267

The Group expects to contribute $3,378 to its defined benefit plan during the 12 months beginning after December 31, 2014.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

(a) Cash (b) Equity instruments (c) Debt instruments (d) Others	Pension plan (%) as of December 31,	Pension plan (%) as of December 31,
	2014 19 11 15 55	2013 24 9 15 52

The actual returns on plan asset of the Group were $1,341 and $682 for the years ended December 31, 2014 and 2013, respectively.

Employee pension fund is deposited under a trust administered by the Bank of Taiwan. The overall expected rate of return on assets is determined based on historical trend and analyst’s expectation on the asset’s return in its market over the obligation period. Furthermore, the utilization of the fund by the labor pension fund supervisory committee and the fact that the minimum earnings are guaranteed to be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks are also taken into consideration in determining the expected rate of return on assets.

The principal assumptions used in determining the Group’s defined benefit plan are shown below:

plan are shown below:
Discount rate Expected rate of return on plan assets Expected rate of salary increases	As of December 31,
	2014	2013
	2.00% 2.00% 3.00%	2.00% 2.00% 3.00%

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

A 0.5 percentage point change in discount rate on defined benefit obligation:

Effect on the defined benefit obligation	For theyear ended December 31,	For theyear ended December 31,	For theyear ended December 31,	For theyear ended December 31,
	2014		2013
	Discount rate Increase By0.5%	Discount rate Decrease By0.5%	Discount rate Increase By0.5%	Discount rate Decrease By0.5%
	$(9,817)	$10,803	$(10,261)	$11,424

Other information on the defined benefit plan is as follows:

Defined benefit obligation at present value Plan assets at fair value Surplus (deficit) in plan Experience adjustments on plan liabilities Experience adjustments on plan assets	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
	2014 $139,637 (63,280) $76,357 $2,147 (176)	2013 $132,635 (58,267) $74,368 $5,159 265	2012
			$108,409 (54,105)
			$54,304
			$9,822 583

(17) Equities

• (a) Common stock

The Company had 450,000 thousand shares authorized to be issued as of December 31, 2014 and 2013, of which 207, 670 thousand shares were issued as of December 31, 2014 and 2013, respectively, each at a par value of NT$10.

• (b) Capital surplus

Capital surplus
Premium on convertible bonds Treasury share transactions Share of changes in net assets of associates and joint ventures accounted for using the equity method Premium from merger Share options Total	As of December 31,
	2014 $732,796 5,749 (3,930) 705 11,475 $746,795	2013
		$795,097 5,749 (3,930) 705 -
		$797,621

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(c) Legal reserve

The Company Act provides that companies must retain at least 10% of their annual earnings, as defined in the Act, until such retention equals the amount of paid-in capital. This retention is accounted for as a legal reserve account. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

(d) Special reserve

When the Company distributed the earnings of 2012 and 2013, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserve. Following a company’s adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, in the amount equal to “other net deductions from shareholders’ equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (e) As of the year ended 1 January 2014, the Company’s first-time adoption of the special reserve was $134,446. The Company did not reverse any special reserve as a result of using, disposing of or reclassifying related assets.

• (f) Retained earnings and dividend policies

• i. According to the Company’s Articles of Incorporation, the appropriations of retained earnings consisted of the following:

The revised Company Act, effective January 2013, provides that the appropriation for legal capital reserve shall be made until the reserve equals the company’s paid-in capital. The reserve may be used to offset a deficit, or be distributed as dividends in cash or stocks for the portion in excess of 25% of paid-in capital if the Company incurs no loss.

• 1 Appropriation between 1% and 15% as bonus to employees;

• 2 Appropriation as directors' and supervisors' bonuses not higher than 3% of the earnings;

• 3 Other appropriation to shareholders.

As the Company’s industry is undergoing a growth development stage to reach higher growth, additional funding may be required in the near future. The Company will not distribute cash dividends higher than 20% of total appropriation to shareholders. In the event that the Company receives sufficient funds for current year’s capital expenditure, more than 50% of total dividends to shareholders will be distributed as cash dividends.

• ii. For the years ended 2014 and 2013, the Company has estimated the amounts of the employee bonuses and remuneration to directors as follows:

Employee bonus-cash Directors’ remuneration	2014 $16,000 11,500 $27,500	2013
		$12,500 10,000
		$22,500

The estimates were based on post-tax net income of the period

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

and the Company’s Articles of Incorporation, and considered factors such as appropriation to legal reserve, etc. The estimated employee bonuses and remuneration to directors and supervisors were recognized as operating costs or operating expense for the period. If the Board modified the estimates significantly in the subsequent periods, the Company will recognize the change as an adjustment to current income. The difference between the estimation and the number resolved at the shareholders’ meeting will be recognized in profit or loss of the subsequent year. The number of shares distributed as share dividends was calculated based on the closing price one day earlier than the date of shareholders’ meeting and considered the impacts of ex-right/ex-dividend.

The distributions of cash dividend, employee bonus and directors’ remuneration for 2014 and 2013 were approved through the board of directors’ meeting and the stockholders’ meeting held on March 13, 2015 and June 12, 2014, respectively. The details of distribution are as follows:

Cash Dividend Employee bonus – Cash (in thousand NT$) Directors’ remuneration (in thousand NT$)	2014 NT$2.8 per share 16,000 11,500	2013
		NT$2.2 per share 12,500 10,000

The stockholders’ meeting held on June 12, 2014 resolved to distribute cash in the amount of $62,301 from additional paid-in capital, at approximately NT$0.3 per share.

The aforementioned 2013 employee bonuses and remuneration to directors approved during stockholders’ meeting were consistent with the estimated amount in the financial statements for the year ended December 31, 2013.

Information on the board of directors’ recommendations and shareholders’ approval regarding the employee bonuses and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

• (e) Non-controlling interests

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Beginning balance Profit (loss) attributable to non-controlling interests Other comprehensive income, attributable to non-controlling interests, net of tax: Exchange differences resulting from translating the financial statements of a foreign operation Increase (decrease) in non-controlling interests Ending balance	For theyears ended December 31	For theyears ended December 31
	2014 $80,797 (18,805) 3,067 - $65,059	2013
		$138,187 (54,837) (9,810) 7,257 $80,797

(18) Operating revenue

Sale revenue Less: Sales returns, discounts and allowances Total	For theyears ended December 31	For theyears ended December 31
	2014 $11,680,010 (37,291) $11,642,719	2013
		$10,604,411 (49,150)
		$10,555,261

(19) Summary of employee benefits, depreciation and amortization expenses by function for the years ended December 31, 2014 and 2013:

		For theyears ended December	For theyears ended December	For theyears ended December	31,
		2014			2013
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$836,236	$703,418	$1,539,654	$594,943	$652,977	$1,247,920
Labor and health insurance	56,981	97,571	154,552	39,425	78,850	118,275
Pension	8,378	22,047	30,425	5,241	21,403	26,644
Other employee benefits expense	71,638	54,794	126,432	56,630	50,247	106,877
Depreciation	114,533	53,351	167,884	109,736	59,907	169,643
Amortization	12,663	47,346	60,009	24,537	41,540	66,077

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(20) Non-operating income and expenses

(a) Other income

Bad debt reversal Interest income Dividend income Others Total	For theyears ended December 31,	For theyears ended December 31,
	2014 $2,250 15,051 8,958 85,506 $111,765	2013
		$16,896 6,754 5,630 125,557
		$154,837

(b) Other gains and losses

Foreign exchange gains (losses), net Loss on disposal of investments Gain of financial instruments at fair value through profit or loss Other impairment losses Loss on impairment of financial instruments Losses on disposal of property, plant and equipment Others Total	For theyears ended December 31,	For theyears ended December 31,
	2014 $26,588 13,469 1,014 - (343) (22,663) (27,309) $(9,244)	2013
		$57,630 (44,352) 86,647 (53,876) (17,154) (4,243) (31,093)
		$(6,441)

(a) Finance costs

Interest on loans from bank Interest on bonds payable Total finance costs	For the years ended December 31,	For the years ended December 31,
	2014 $33,424 7,157 $40,581	2013
		$37,040 35
		$37,075

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(21) Components of other comprehensive income

For the year ended December 31, 2014:

Exchange differences resulting from translating the financial statements of a foreign operation Unrealized gains (losses) from available-for-sale financial assets Actuarial gains or losses on defined benefits plan Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during the period	Reclassification adjustments during theperiod	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	$169,561 15,056 (1,971) 8,412	$ - - - -	$169,561 15,056 (1,971) 8,412	$(27,775) - 335 -	$141,786 15,056 (1,636) 8,412
	$191,058	$-	$191,058	$(27,440)	$163,618

For the year ended December 31, 2013

Exchange differences resulting from translating the financial statements of a foreign operation Unrealized gains losses from available-for-sale financial assets Actuarial gains or losses on defined benefits plan Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during the period	Reclassification adjustments during theperiod	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
	$170,153 178,192 (20,921) 22,183	$ - - - -	$170,153 178,192 (20,921) 22,183	$(33,341) - 3,557 -	$136,812 178,192 (17,364) 22,183
	$349,607	$-	$349,607	$(29,784)	$319,823

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(22) Income tax

The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

For the years ended December 31, 2014 2013 Current income tax expense : Current income tax charge $255,764 $210,037 Adjustments in respect of current income tax of prior periods (638) 1,799 Deferred tax expense (income): Deferred tax expense (income) relating to origination and reversal of temporary differences 13,449 46,782 Total income tax expense $268,575 $258,618 Income tax relating to components of other comprehensive income For the years ended December 31, 2014 2013 Deferred tax expense (income): Unrealized gains (losses) from available-for-sale financial assets $27,775 $33,340 Actuarial gains or losses on defined benefits plan (335) (3,556) Income tax relating to components of other comprehensive income $27,440 $29,784	For the years ended December 31,	For the years ended December 31,
		2013
		$210,037 1,799 46,782
		$258,618
Deferred tax expense (income): Unrealized gains (losses) from available-for-sale financial assets Actuarial gains or losses on defined benefits plan Income tax relating to components of other comprehensive income
	2014 $27,775 (335) $27,440	2013
		$33,340 (3,556)
		$29,784

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

multiplied by applicable tax rates is as follows:
Accounting profit (loss) before tax from continuing operations Tax at the domestic rates applicable to profits in the country concerned Tax effect of expenses not deductible for tax purposes 10% surtax on undistributed retained earnings Adjustments in respect of current income tax of prior periods Total income tax expense recognized in profit or loss	For the years ended December 31,
	2014 $1,043,522 $284,036 (40,377) 25,554 (638) $268,575	2013
		$867,044
		$269,872 (19,876) 6,823 1,799
		$258,618

Deferred tax assets (liabilities) relate to the following:

For the year ended December 31, 2014

Temporary differences Exchange differences on translation of foreign operations Unrealized foreign exchange gains or losses loss from price recovery (reduction) of inventories Revaluations of financial assets and liabilities at fair value through profit or loss Investments accounted for using the equity method Actuarial gains or losses on defined benefits plan Pension cost Convertible Bond Allowance for doubtful accounts Impairment on financial instruments Deferred tax income/ (expense) Net deferred tax assets/(liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of January1 $(42,735) (667) 2,203 1,768 (114,134) 5,325 7,317 756 (53) 2,916 $(137,304) $28,175 $165,479	Recognized in profit or loss $10,118 (1,757) (511) (3,676) (15,116) - 3 (756) 455 (2,209) $(13,449)	Recognized in other comprehensive income $(27,775) - - - - 335 - - - - $(27,440)	Balance as of June 30
				$(60,392) (2,424) 1,692 (1,908) (129,250) 5,660 7,320 - 402 707
				$(178,193)
				$30,342
				$208,535

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2013

Temporary differences Exchange differences on translation of foreign operations Unrealized foreign exchange gains or losses loss from price recovery (reduction) of inventories Revaluations of financial assets and liabilities at fair value through profit or loss Investments accounted for using the equity method Unrealized intragroup profits and losses Actuarial gains or losses on defined benefits plan Pension cost Convertible Bond Allowance for doubtful accounts Impairment on financial instruments Deferred tax income/ (expense) Net deferred tax assets/(liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of January1 $(15,305) 15,573 2,300 6,798 (82,330) 1,581 2,640 7,249 756 - - $(60,738) $29,647 $90,385	Recognized in profit or loss $5,910 (16,240) (97) (5,030) (31,804) (1,581) (871) 68 - (53) 2,916 $(46,782)	Recognized in other comprehensive income $(33,340) - - - - - 3,556 - - - - $(29,784)	Balance as of June 30
				$(42,735) (667) 2,203 1,768 (114,134) - 5,325 7,317 756 (53) 2,916
				$(137,304)
				$28,175
				$165,479

Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Group did not recognize any deferred tax liability for taxes that would be payable on the unremitted earnings of the Group’s overseas subsidiaries, as the Group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future. As at December 31 2014, and December 31 2013, the taxable temporary differences associated with investment in subsidiaries, for which deferred tax liability has not been recognized, aggregated to $92,480, $71,268, respectively.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Imputation credit information

Balances of imputation credit amounts	As of December 31,	As of December 31,
	2014 $88,526	2013
		$51,558

The expected creditable ratio for 2014 and the actual creditable ratio for 2013 were 14.02% and 11.16%, respectively.

Information of the Company’s earnings generated

Earnings generated in the year ended December 31 1997 Earnings generated after the year ended December 31 1997 Total	As of December 31,	As of December 31,
	2014 $382 1,249,441 $1,249,823	2013
		$382 865,052
		$865,434

The assessment of income tax returns

As of December 31, 2014, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

The Company Subsidiary- Kwan-Ze Corporation Ltd. Subsidiary- Digi O2 International Co., Ltd. Subsidiary- T-CONN Precision Co., Ltd.	The assessment of income tax returns
	Assessed and approved up to 2011 Assessed and approved up to 2012 Assessed and approved up to 2012 Assessed and approved up to 2012

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(23) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

hares.
(a) Basic earnings per share Profit attributable to ordinary equity holders of the Company Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) (note) Basic earnings per share (NT$) (b) Diluted earnings per share Profit attributable to ordinary equity holders of the Company Add: Interest expense from convertible bonds Profit attributable to ordinary equity holders of the Company after dilution Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee bonus-stock (in thousands) Convertible bonds (in thousands) Weighted average number of ordinary shares outstanding after dilution (in thousands) Diluted earnings per share (NT$)	For the years ended December 31,
	2014 $793,752 207,670 $3.82 $793,752 5,941 $799,693 36 3,347 211,053 $3.79	2013
		$663,263
		207,588
		$3.20
		$663,263 35
		$663,298
		313 -
		207,901
		$3.19

Note: Weighted average number of ordinary shares is calculated at conversion date.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

7. Related party transactions

• (1) Significant transactions with related parties

• (a) Purchases

Other related parties	For the years ended December 31,	For the years ended December 31,
	2014 $113,124	2013
		$14,547

The purchase price from the above related parties was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers are comparable with third party suppliers and are set between one to four months.

• (b) Amounts owed to related parties

Other related parties	As of December 31, 2014 2013 $28,567 $1,082	As of December 31, 2014 2013 $28,567 $1,082
	2014 $28,567
		$1,082

• (c) Key management personnel compensation

Short-term employee benefits Post-employment benefits Total	For the years ended December 31,	For the years ended December 31,
	2014 $104,502 30,425 $134,927	2013
		$69,225 25,868
		$95,093

8. Assets pledged as security

The following table lists assets of the Group pledged as security:

Assetspledged for security	Carrying amount	Carrying amount	Secured liabilities
	2014.12.31	2013.12.31
Property, plant and equipment - land Property, plant and equipment –buildings(carrying value) Total	$ - -	$114,547 115,435	Long-term loans Long-term loans
	$-	$229,982

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

9. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

• (1) The Company provided guarantees for subsidiaries’ financing to banks for the years ended December 31, 2014 and 2013. Please refer to Note 13.(1)(2).

• (2) The Company’s facilities from DBS and seven lending institutions of syndicated credits made in September, 2011 was $700,000. For related commitment please refer to Note 6.(14).

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

12. OTHERS

(1)Categories of financial instruments

Financial assets

Financial assets
Financial assets at fair value through profit or loss: Forward foreign exchange contracts Non-derivative financial assets Subtotal Available-for-sale financial assets： Financial assets at fair value Financial assets at cost-noncurrent Subtotal	As of December 31,
	2014 $14,318 31,324 45,642 175,446 205,275 380,721	2014
		$ - 4,000
		4,000
		254,001 211,454
		465,455

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Loans and receivables: Cash and cash equivalents (exclude cash on hand) Notes and accounts receivable Other receivables Subtotal Total Financial liabilities Financial liabilities at amortized cost: Short-term loans Notes and accounts payable Bonds payable (include current portion) long-term loans (include current portion) Subtotal Financial liabilities at fair value through profit or loss: Financial liabilities at fair value through profit or loss-current - Forward foreign exchange contracts Embedded derivative financial instruments -Bond Subtotal Total	As of December 31,	As of December 31,
	2014 2014 2,401,021 1,868,695 3,220,212 3,006,905 120,518 124,412 5,741,751 5,000,012 $6,168,114 $5,469,467 As of December 31,	2014
		1,868,695 3,006,905 124,412
		5,000,012
		$5,469,467
	2014	2013
	$1,842,548 2,114,817 288,440 12,166	$1,330,911 1,916,990 - 528,460
	4,257,971	3,776,361
	27,802 1,950	13,449 -
	29,752	13,449
	$4,287,723	$3,789,810

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies measures and manages the

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly related to the volatility in the exchange rates for USD and RMB.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s loans at variable interest rates and bank loans with fixed interest rates.

The Group manages interest rate risk by maintaining an appropriate portfolio of fixed and floating interest rates.

Equity price risk

The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s listed equity securities are classified under available-for-sale financial assets, while unlisted equity securities are classified as financial assets measured at cost. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.

Pre-tax sensitivity analysis of changes in related risk factors for the years ended December 31, 2014 and 2013 are as follows:

For the year ended December 31, 2014

Main Risk Foreign currency risk Interest rate risk Equity price risk	Fluctuation NTD/USD rate +/− 1% NTD/RMB rate +/− 1% Market rate +/− 10 basis points Stock price +/− 10%	Sensitivity of profit/loss +/−$8,211 +/− $164 +/− $1,850 -	Sensitivity of equity
			+/− $416仟 +/− $12,296 - +/− $17,544

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended December 31, 2013

Main Risk Foreign currency risk Interest rate risk Equity price risk	Main Risk NTD/USD rate +/− 1% NTD/RMB rate +/− 1% Market rate +/− 10 basis points Stock price +/− 10%	Sensitivity of profit/loss +/−$34,749 +/− $9 +/− $1,859 -	Sensitivity of equity
			+/− $2,553 +/− $26,942 - +/− $25,400

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit limits are established for all customers based on their financial positions, ratings from credit rating agencies, historical experiences, prevailing economic condition and the Group’s internal rating criteria, etc. Certain customer’s credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of December 31, 2014 and 2013, amounts receivables from top ten customers represented 27.20% and 23.47% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank loans, convertible bonds and finance leases. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to loans with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

As of December 31, 2014 Loans Notes and accounts payable As of December 31, 2013 Loans Notes and accounts payable	Less than 1 year $1,878,817 $2,114,817 $4,577 $1,540,884 $1,916,990	2 to 3years $7,105 - $295,423 $343,212 -	4 to 5years $1,244 - - $10,685 -	> 5years - - - - -	Total
					$1,887,166 $2,114,817 $300,000 $1,894,735 $1,916,990

(6) Fair values of financial instruments

• (a) the methods and assumptions applied in determining the fair value of financial instruments:

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

• i. The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value.

• ii. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities and bonds) at the reporting date.

• iii. Fair value of equity instruments without market quotations (including unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as recent fund raising activities, valuation of similar companies, individual company’s development, market conditions and other economic indicators.

• iv. The fair value of derivative financial instrument is based on market quotations. For unquoted derivatives that are not options, the fair value is determined based on discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using the option pricing model.

• (b) Fair value of financial instruments measured at amortized cost

The carrying amount of the Group’s financial assets and liabilities measured at amortized cost approximate their fair value.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (c) Assets measured at fair value

The following table contains the fair value of financial instruments after initial recognition and the details of the three levels of fair value hierarchy:

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

• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

As of December 31, 2014

As of December 31, 2014
Financial assets: Financial assets at fair value through profit or loss Forward foreign exchange contracts Fund Available-for-sale financial assets: Stock Financial liabilities: Financial liabilities at fair value through profit or loss Forward foreign exchange contracts Embedded derivatives	Level 1 - $31,324 $175,446 - -	Level 2 $14,318 - - $27,802 $1,950	Level 3 - - - - -	Total
				$14,318 $31,324 $175,446 $27,802 $1,950

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As at December 31, 2013 Financial assets: Financial assets at fair value through profit or loss Fund Available-for-sale financial assets: Stock Financial liabilities: Financial liabilities at fair value through profit or loss Forward foreign exchange contracts	Level 1 $4,000 $254,001 -	Level 2 - - $13,449	Level 3 - - -	Total
				$4,000 $254,001 $13,449

for the years ending December 31, 2014 and 2013, there were no transfers between Level 1 and Level 2 fair value measurements.

• (7) The Group’s derivative financial instruments held for trading include forward currency contracts and embedded derivatives. The related information is as follows:

Forward currency contracts

The Group entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

Items(bycontract) As of December 31, 2014 Forward currency contract Forward currency contract Forward currency contract Forward currency contract Forward currency contract	Notional Amount Buy call option USD 2,900 Buy put option USD 400 Sell call option USD 1,050 Sell put option USD 5,800 Cross currency swaps USD 11,00 0	Contract Period
		From 2014/03/08 to 2015/12/09 From 2014/03/08 to 2015/09/07 From 2014/03/08 to 2015/09/07 From 2014/03/08 to 2015/12/09 From 2014/01/10 to 2016/01/14

As of December 31, 2013

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Items(bycontract) Forward currency contract Forward currency contract Forward currency contract	Notional Amount Buy put option USD 350 Sell call option USD 2,100 Sell put option USD 1,050	Contract Period
		From 2013/01/04 to 2014/01/06 From 2013/01/04 to 2014/06/26 From 2013/01/07 to 2014/01/24

1. Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Financial assets Monetary items: USD RMB EUR Financial assets Monetary items: USD RMB EUR	As of December 31,	As of December 31,	2014 NTD $2,084,530 2,001,271 57,059 1,477,263 710,979 9,966	As of December 31,	As of December 31,	2013
	Foreign currencies $65,721 391,446 1,480 46,575 139,066 259	Foreign exchange rate 31.72 5.11 38.55 31.72 5.11 38.55		Foreign currencies 63,117 348,301 805 28,719 199,937 329	Foreign exchange rate 29.95 4.95 41.29 29.95 4.95 41.29	NTD
						1,890,368 1,723,123 33,245 860,130 989,132 13,569

(9) Capital management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payments to shareholders, return capital to shareholders or issue new shares.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

13. Other disclosure

• (1) Information at significant transactions

• (a) Financing provided to others for the year ended December 31, 2014: Please refer to Attachment 1.

• (b) Endorsement/Guarantee provided to others for the year ended December 31, 2014: Please refer to Attachment 2.

• (c) Securities held as of December 31, 2014: Please refer to Attachment 3.

• (d) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the paid-in capital for the year ended December 31, 2014: None.

• (e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the paid-in capital for the year ended December 31, 2014: None.

• (f) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended December 31, 2014: None.

• (g) Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended December 31, 2014: Please refer to Attachment 4.

• (h) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of year ended December 31, 2014: None.

• (i) Financial instruments and derivative transactions: Please refer to Note 12. (7).

• (j) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 5.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (2) Information on investees:

Names, locations, main businesses and products, original investment amount, investment as of December 31, 2014, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2014: Please refer to Attachment 6.

• (3) Information on investments in mainland China

Investment in Mainland China: Please refer to Attachment 7.

14. Segment information

For management purposes, the Group is organized into business units based on their products and services and has three reportable operating segments as follows:

• (1) DMIS: The segment focuses on manufacturing and sale of cable assemblies.

• (2) Component: The segment is in charge of selling various electronic connectors and electronic components.

• (3) Headquarter Operating : The segment focuses on managing investment and other businesses beyond the scopes of DMIS and Component segments.

Operating segments are not aggregated to be reported as aforementioned operating segments.

The management monitors the operation results of its business units individually to make decisions on resource allocation and performance assessment. Segment performance is evaluated by its operating profit or loss and is measured in consistence with the operating profit or loss in the consolidated financial statements. However, the financial costs, financial income and income taxes are managed on a consolidated basis and are not allocated to operating units.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

• (a) Information on profit or loss, assets and liabilities of the reportable segment:

For the year ended December 31, 2014

Revenue External customer Inter-segment Total revenue Segment profit Segment assets Segment liabilities	Cable Segment $6,254,899 1,698,825 $7,953,724 $835,709 $4,906,734 $2,140,382	Electronic Segment		Management Operation Segment	Adjustment and cancellation (note)	Consolidated
		$4,091,820 51,859		$1,296,000 275,805	$- (2,026,489) $(2,026,489) $- $2,586,639 $76,357	$11,642,719 -
		$4,143,679		$1,571,805		$11,642,719
		$476,485		$(268,672)		$1,043,522
		$1,775,236		$1,218,222		$10,486,831
		$918,109		$2,267,867		$5,402,715

Note: Inter-segment revenues were eliminated when consolidated.

For the year ended December 31, 2013

Revenue External customer Inter-segment Total revenue Segment profit Segment assets Segment liabilities	Cable Segment $5,693,843 1,201,412 $6,895,255 $716,922 $4,466,482 $2,673,904	Electronic Segment		Management Operation Segment	Adjustment and cancellation (note)	Consolidated
		$3,471,472 47,408		$1,389,946 412,246	$- (1,661,066) $(1,661,066) $- $1,977,282 $74,368	$10,555,261 -
		$3,518,880		$1,802,192		$10,555,261
		$450,691		$(300,569)		$867,044
		$1,378,172		$1,563,228		$9,385,164
		$794,191		$1,189,448		$4,731,911

Note: Inter-segment revenues were eliminated when consolidated.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

• (b) Information on reconciliations of revenue, profit or loss, assets, liabilities and other material items of reportable segments:

There’s no segment revenue, profit, assets, liabilities or significant items that needed to be reconciled for the years ended December 31, 2014 and 2013.

• (c) Geographical information

• i. Revenue from external customers:

For theyears ended December 31, 2014 2013 Mainland China (Hong Kong) $7,152,919 $6,940,726 United States 1,216,713 959,021 Taiwan 711,689 507,950 Other countries 2,561,398 2,147,564 Total $11,642,719 $10,555,261	For theyears ended December 31, 2014 2013 Mainland China (Hong Kong) $7,152,919 $6,940,726 United States 1,216,713 959,021 Taiwan 711,689 507,950 Other countries 2,561,398 2,147,564 Total $11,642,719 $10,555,261	For theyears ended December 31, 2014 2013 Mainland China (Hong Kong) $7,152,919 $6,940,726 United States 1,216,713 959,021 Taiwan 711,689 507,950 Other countries 2,561,398 2,147,564 Total $11,642,719 $10,555,261
	2014	2013
	$7,152,919 1,216,713 711,689 2,561,398	$6,940,726 959,021 507,950 2,147,564
	$11,642,719	$10,555,261

The revenue information above is based on the location of the customers.

ii. Non-current assets:

Mainland China United States Taiwan Other Total	As of December 31,	As of December 31,
	2014	2013
	$1,414,731 1,110,219 3,749 9,070	$1,412,012 1,194,727 4,083 5,704
	$2,537,769	$2,616,526

• (d) Information about major customers

There’s no sales revenue from a single customer accounting for over 10% of revenue on income statement for the years ended December 31, 2014 and 2013.

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Attachment 1: Financing provided to others for the year ended December 31, 2014

No.	Lender (Note 1)	Counter- party	Financial statement account	Related Party	Maximum balance for the period	Ending balance	Actual amount provided	Interest rate	Nature of financing	Amount of sales to (purchases from) counter-party	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit of financing amount for individual counter-party (Note2)	Limit of total financing amount (Note3)
													Item	Value
1	JYSB	JY Sinact	Other receivables	Y	$51,125	$51,125	$ -	2.85%	Note 4	$ -	Need for operating	$ -	-	$ -	$214,187	$856,746
1	JYSB	BJSB Tongan	Other receivables	Y	$51,125	$51,125	$ -	4.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$214,187	$856,746
1	JYSB	SZSB	Other receivables	Y	$66,462	$66,462	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$214,187	$856,746
2	BJSB	BJSB Tongan	Other receivables	Y	$51,125	$51,125	$ -	0.00%	Note 4	$-	Need for operating	$ -	-	$ -	$63,702	$254,808

Note 1: Transations above are all between consolidated entities in the Group and have been reversed.

Note 2: Limit of financing amount for individual counter-party is 10% of the net worth of the financial report audited by the certified public accountants as of 31 December 2014.

$2,141,865 x 10%=$214,187

$637,021x10%=$63,702

Note 3: Limit of total financing amount for individual counter-party is 40% of the net worth of the financial report audited by the certified public accountants as of 31 December 2014. $2,141,865x40%=$856,746

$637,021x40%=$254,808

Note 4: For short-term financing.

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Attachment 2: Endorsement/Guarantee provided to others for the year ended December 31, 2014

(Note 1) No.	Endorsor/ Guarantor	Receiving party	Receiving party	Limit of guarantee/endorseme nt amount for receiving party (Note 3)	Maximum balance for the period	Ending balance	Actual amount provided	Amount of collateral guarantee/ endorseme nt	Percentage of accumulated guarantee amount to net assets value from the latest financial statement	Limit of total guarantee/ endorsement amount (Note 4)	Parent company's guarantee/ endorsement amount to subsidiaries (Note 5)	Subsidiaries' guarantee/ endorsement amount to parent company (Note 5)	Guarantee/ endorsement amount to company in Mainland China (Note 5)
		Company name	Releationship (Note 2)
0	The Company	JYSB	3	$2,007,623	$523,347	$523,347	$63,436	none	10.43%	$5,019,057	Y	N	Y
0	The Company	BJSB	2	$2,007,623	$414,773	$206,167	$ -	none	4.11%	$5,019,057	Y	N	Y
0	The Company	BJSB Tongan	2	$2,007,623	$479,318	$479,318	$237,520	none	9.55%	$5,019,057	Y	N	Y
0	The Company	SHSB	3	$2,007,623	$31,718	$31,718	$ -	none	0.63%	$5,019,057	Y	N	Y
0	The Company	TCSB	3	$2,007,623	$188,966	$158,590	$95,154	none	3.16%	$5,019,057	Y	N	Y
0	The Company	SZSB	3	$2,007,623	$63,436	$63,436	$ -	none	1.26%	$5,019,057	Y	N	Y
0	The Company	JY Sinact	3	$2,007,623	$253,744	$253,744	$171,404	none	5.06%	$5,019,057	Y	N	Y
0	The Company	T-CONN Zhongshan	3	$2,007,623	$222,026	$222,026	$63,436	none	4.42%	$5,019,057	Y	N	Y
0	The Company	HK Sinact	3	$2,007,623	$63,436	$63,436	$31,718	none	1.26%	$5,019,057	Y	N	N
0	The Company	T-CONN Precision	3	$2,007,623	$126,872	$126,872	$ -	none	2.53%	$5,019,057	Y	N	N
0	The Company	HK CMK	3	$2,007,623	$30,258	$ -	$ -	none	-	$5,019,057	Y	N	N
0	The Company	S P L	3	$2,007,623	$31,718	$ -	$ -	none	-	$5,019,057	Y	N	N

• Note 1: The Company and its subsidiaries are coded as follows:

• The Company is coded "0".

• The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

• Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:

• A company that has a business relationship with the Company.

• A subsidary in which the Company holds directly over 50% of equity interest.

• An investee in which the Company and its subsidiaries hold over 50% of equity interest.

• An investee in which the Company holds directly and indirectly over 50% of equity interest.

• A company that has provided guarantees to the Company, and vice versa, due to contractual requirements.

• An investee in which the Company conjunctly invests with other shareholders, and for which UMC has provided endorsement/guarantee in proportion to its shareholding percentage.

• Note 3: Limit of guarantee/endorsement amount for receiving party is 40% of the net worth of the financial report audited by the certified public accountants as of 31 December 2014. $5,019,057x40%=$2,007,623

• Note 4: Limit of total guarantee/ endorsement amount is 100% of the net worth of the financial report audited by the certified public accountants as of 31 December 2014.

• Note 5: "Y" for the listed (OTC) parent company guarantees/endorses for subsidiary, subsidiary guarantees/endorses for the listed (OTC) parent company or guarantee/endorse for companies in Mainland China.

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Attachment 3: Securities held as of December 31, 2014 (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type and name of securities	Relationship (Note 1)	Financial statement account		December 31, 2013	December 31, 2013	December 31, 2013	December 31, 2013	Note
				Shares	Book value		Percentage of ownership (%)	Fair value
The Company	Top Taiwan VII Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	6,000,000shares		$60,750	3.06%	Note 2	-
The Company	Top Taiwan III Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	5,000,000shares		50,000	4.06%	Note 2	-
The Company	Top Taiwan II Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	4,000,000shares		40,000	5.00%	Note 2	-
The Company	General Research Of Electronics Inc.	-	Financial assets measured at cost- noncurrent	16,000shares		23,184	7.48%	Note 2	-
The Company	Niigata Seimitsu Co., Ltd.	-	Financial assets measured at cost- noncurrent	100,000shares		13,460	0.46%	Note 2	-
The Company	ULTRACAP Technologies Co., Ltd.	-	Financial assets measured at cost- noncurrent	791,667shares		12,667	4.28%	Note 2	-
The Company	DYNAHZ Technologies Co., Ltd.	-	Financial assets measured at cost- noncurrent	2,309,725shares		6,150	16.67%	Note 2	-
The Company	SINTEX Material Co., Ltd	Head of this company and the Company is the same person	Financial assets measured at cost- noncurrent	450,000shares		4,500	18.00%	Note 2	-
The Company	BANDRICH, INC.	-	Financial assets measured at cost- noncurrent	330,000shares		4,125	1.62%	Note 2	-
SHSB	Guo Shun Fund	-	Financial assets measured at cost- noncurrent	-		19,789	-	Note 2	-
SB BVI	Argosy (Beijing) Technologies Co., Ltd.	-	Financial assets measured at cost- noncurrent	-		2,264	12.00%	Note 2	-
Kwan-Ze	ACTMAX Technologies INC.	-	Financial assets measured at cost- noncurrent	-		1,441	19.00%	Note 2	-
			Subtotal			238,330
			Less: accumulated impairment			(33,376)
			Total			$204,954
The Company	INPAQ Technology Co., Ltd.	The Company is it's director	Available-for-sale financial assets-noncurrent	4,182,231shares		$168,381	4.52%	$175,446
			Adjustments for change in value of investment			$15,056
			Less: accumulated impairment			(7,991)		-
			Total			$175,446

Note 1: Not required if the issuer of securities is not a related party.

Note 2: Financial assets do not have quoted prices in an active market and their fair value cannot be reliably measured

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Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended December 31, 2014

Related- party	Counter-party	Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Details of non-arm's lengthtransaction	Details of non-arm's lengthtransaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Note
			Purchases (Sales)	Amount	Percentage of total consolidated purchase (Sales)	Terms	Unit price	Terms	Carrying amount	Percentage of total consolidated receivables (payable)
The Company	Jiangyin sinbon Electronics Co., Ltd. (JYSB)	Subsidiary	Purchase	$1,169,194	31.82%	Trading condition is as same as other supplier	N/A	N/A	($317,560)	(33.83%)

Attachment 5: The business relationship, significant transactions and amounts between parent company and subsidiaries

No. (Note 1)	Related-party	Counter-party	Relationship with the Company (Note 2)	Transactions	Transactions	Transactions	Transactions
				Account	Amount	Terms	Percentage of consolidated operating revenues or consolidated total assets(Note3)
0	The Company	Jiangyin sinbon Electronics Co., Ltd.(JYSB)	1	Prutcase	$1,169,194	(Note 4)	10.04%
1	Jiangyin sinbon Electronics Co., Ltd.(JYSB)	The Company	2	Sales	$1,169,194	(Note 4)	10.04%

• Note 1 : The Company is coded "0".The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

• Note 2 : Transactions are categorized as follows:

• The holding company to subsidia

• Subsidiary to holding company.

• Subsidiary to subsidiary.

• Note 3 : The percentage with respect to the consolidated asset/liability for transactions of balance sheet items are based on each item's balance at period-end. For profit or loss items, cumulative balances are used as basis.

• Note 4 : The sales price to the above related parties was determined through mutual agreement based on the market conditions.

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Attachment 6: Names, locations, main businesses and products, original investment amount, investment as at December 31, 2014, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2014: (Excluding investment in Mainland China)

Investor	Investee company (Note1 )	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of December 31, 2013	Investment as of December 31, 2013	Investment as of December 31, 2013	Net income (loss) of investee company (Note1)	Investment income (loss) recognized (Note 1)	Note (Note 1 )
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value
The Company	HKSB	Hong Kong	Manufacturing and selling a wide variety of connectors, wires and cables.	HKD95,606,000 $401,262	HKD95,606,000 $401,262	-	100.00%	$585,463	$175,660	$175,660	Subsidiary
The Company	JPSB	Japan	Selling a wide variety of connectors, wires and cables.	JPY25,000,000 $5,008	JPY25,000,000 $5,008	350shares	70.00%	$6,572	$1,775	$1,243	Subsidiary
The Company	Kwan-Ze	Taipei Country, Taiwan	Holding company	$235,600	$235,600	23,560,000shares	100.00%	$296,366	$3,392	$3,392	Subsidiary
The Company	Top Taiwan IV Venture Capital Co., Ltd	Taipei City, Taiwan	Holding company	$160,000	$160,000	16,000,000shares	20.00%	$173,718	$24,300	$4,860	Investee under the equity method
The Company	SB BVI	British Virgin Islands	Holding company	USD40,421,000 $1,321,747	USD38,921,000 $1,276,694	-	100.00%	$2,978,959	$210,142	$210,142	Subsidiary
The Company	Korea Sinbon Electronics Co., Ltd.	Korea	Selling a wide variety of connectors, wires and cables.	USD$30,000 $1,019	USD$30,000 $1,019	-	37.50%	$18,754	($1,782)	($668)	Investee under the equity method
The Company	USSB	U.S.A Florida	Selling a wide variety of connectors, wires and cables.	$ -	$ -	-	51.00%	($1,399)	($711)	($363)	Subsidiary
The Company	S A M O A	Samoa	Holding company	USD3,143,000 $101,747	USD3,143,000 $101,747	-	51.51%	$10,169	($37)	($19)	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$30,648	$30,648	2,945,034shares	3.50%	$37,408	$128,225	$4,493	Investee under the equity method
The Company	Worldwide Wire Harnesses Co., Ltd.	Samoa	Logistic center.	USD75,000 $2,451	USD75,000 $2,451	-	50.00%	$5,724	$2,173	$1,086	Subsidiary
The Company	S E L	Mauritius	Holding company	USD 6,109,000 $192,742	USD 6,109,000 $192,742	-	64.48%	$75,789	($53,566)	($34,541)	Subsidiary
The Company	Sinbon USA LLC.	216th street SW,Suite D Lynneood WA 98036	Logistic center.	USD900,000 $27,864	$ -	-	100.00%	$27,933	($588)	($588)	Subsidiary
S E L	HK CMK	Hong Kong	Selling a wide variety of connectors and cables.	USD4,620,000 $136,429	USD4,620,000 $136,429	-	100.00%	USD1,649,000 $52,318	$ -	$ -	Subsidiary
S E L	T-CONN	Hsinchu City, Taiwan	Manufacturing and selling a wide variety of connectors, wires and cables.	$10,000	$10,000	-	100.00%	USD595,000 $18,881	USD(260,000) ($7,903)	$ -	Subsidiary
S E L	S P L	Mauritius	Logistic center.	USD 100,000 $3,228	USD 100,000 $3,228	-	100.00%	USD2,063,000 $65,435	USD255,000 $7,736	$ -	Subsidiary
SB BVI	HK Sinact	Hong Kong	Holding company	USD4,671,000 $145,335	USD4,671,000 $145,335	-	100.00%	USD375,000 $11,900	USD3,000 $86	$ -	Subsidiary

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Attachment 6: Names, locations, main businesses and products, original investment amount, investment as at December 31, 2014, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2014: (Excluding investment in Mainland China)

Investor	Investee company (Note1 )	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of December 31, 2013	Investment as of December 31, 2013	Investment as of December 31, 2013	Net income (loss) of investee company (Note1)	Investment income (loss) recognized (Note 1)	Note (Note 1 )
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value
Kwan-Ze	Digi O2	Miaoli Country, Taiwan	Selling a wide variety of connectors and cables.	$42,740	$42,740	4,274,000shares	85.48%	$65,410	($23,120)	$ -	Subsidiary
Kwan-Ze	Argocy Research Inc.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$147,175	$147,175	14,624,200shares	17.40%	$190,042	$128,225	$ -	Investee under the equity method
Worldwide Wire Harnesses Co., Ltd.	STT	U.S.A Tennessee	Logistic center.	USD140,000 $4,542	USD140,000 $4,542	-	100.00%	USD(122,000) ($3,875)	USD72,000 $2,196	$ -	Subsidiary
Argocy Research Inc.	Argosy Technology Inc.(USA)	U.S.A	Sell Multimedia related products, ODM and OED	$30,347	$30,347	900shares	100.00%	$ -	$ -	$ -	Investee under the equity method
Argocy Research Inc.	Ari International B.V.	The Netherlands	Leasing operations and sell ODM and OED	$22,314	$22,314	-	100.00%	$18,507	($150)	($150)	Investee under the equity method
Argocy Research Inc.	Ari International (Singapore)Pte.,Ltd. (AIS)	Singapore	Sell computer peripheral products and import and export business	$32,697	$32,697	-	100.00%	$8,456	($1,087)	($1,087)	Investee under the equity method
Argocy Research Inc.	NOVAC ARGOSY	Tokyo	Sell computer peripheral products	$4,294	$4,294	-	49.00%	$ -	$ -	$ -	Investee under the equity method
Argocy Research Inc.	Global Saber Electronics Co., Ltd.	Mauritius	Selling a wide variety of connectors and cables.	$ -	$ -	-	100.00%	$94,822	($11,265)	($11,265)	Investee under the equity method
Argocy Research Inc.	ROTEC LIMITED	British Virgin Islands	Holding company	$268,479	$212,590	8,550shares	77.38%	$356,136	$9,719	$7,569	Investee under the equity method
Global Saber Electronics Co., Ltd	ROTEC LIMITED	British Virgin Islands	Holding company	$72,918	$57,650	2,500shares	22.62%	$104,107	$9,719	$ -	Investee under the equity method

• Note 1: （1）"Investee company", "Addres", "Main businesses and products", "Initial Investment"and "Investment as of December 31, 2013" shall be filled in the Company's investmet.

to the subsidiaries' re-investment in corresponding order, and indicate the relationship in the Notes.

• （2）"Net income (loss) of investee company" shall be filled in net income (loss) of investee for the year ended 31 December 2013.

• （3）"Investment income (loss) recognized", shall be filled in only investment income (loss) under the equity method, and the investor shall confirm that its investment income (loss) includes the subsidiaries' re-investment.

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Attachment 7: Investment in Mainland China

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2013	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2013	Net income (loss) of investee company	Percentag e of Ownership	Investment income (loss) recognized	Carrying Value as of December 31, 2013	Accumulated Inward Remittance of Earnings as of Outflow December 31, 2013
					Outflow	Inflow
BJSB	Manufacturing and selling a wide variety of connectors, wires and ~~bl~~	USD 4,450,000	Indirectly investment in Mainland China through remittance from a third ~~i~~	USD 1,020,000 $30,719	$ -	$ -	USD 1,020,000 $30,719	($1,816)	100.00%	($1,816) (Note 1)	$637,040	USD214,000 $6,092
JY Sinact	Manufacturing and selling a wide variety of connectors, wires and cables. ~~caes~~	USD 31,280,000	Indirectly investment in Mainland China through companies registered in a third region. ~~regon~~	USD 18,419,000 $596,665	$ -	$ -	USD 18,419,000 $596,665	USD 5,992,000 $181,979	100.00%	USD 5,992,000 $181,979 (Note 1)	USD67,528,000 $2,141,865	USD3,564,000 $108,112
SHSB	Selling a wide variety of connectors, wires and cables.	USD 3,280,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 1,700,000 $55,358	$ -	$ -	USD 1,700,000 $55,358	USD 64,000 $1,948	100.00%	USD 64,000 $1,948 (Note 1)	USD7,461,000 $236,639	USD185,000 $6,050
SZSB	Selling a wide variety of connectors, wires and cables.	USD 310,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 250,000 $8,297	USD 2,500,000 $75,088	$ -	USD 2,750,000 $83,385	USD 546,000 $16,595	100.00%	USD 546,000 $16,595 (Note 1)	USD9,648,000 $306,014	$ -
TCSB	Selling a wide variety of connectors, wires and cables.	USD 6,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 3,000,000 $96,090	$ -	$ -	USD 3,000,000 $96,090	USD 324,000 $9,845	100.00%	USD 324,000 $9,845 (Note 1)	USD8,646,000 $274,237	$ -
China Digital Library Corp.Ltd.	Technology development of computer software, transfer of technology, advisoryservice	RMB 88,600,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 750,000	$ -	$ -	USD 750,000	$ -	4.85%	$ - (Note 2)	$ -	$ -
Argosy (Beijing) Technologies Co., Ltd.	Selling a wide variety of connectors, wires and cables.	RMB 5,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 76,000	$ -	$ -	USD 76,000	$ -	12.00%	$ - (Note 2)	USD76,000 $2,411	$ -
Wu Xi S&D	Manufacturing and selling new flat panel displays.	USD 4,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 1,900,000 $61,823	$ -	$ -	USD 1,900,000 $61,823	$ -	52.04%	$ -	$ -	$ -
Ning Bo Smart and Diligent Co., Ltd.	Manufacturing and selling a new Flat Panel Display.	USD 2,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 1,140,000 $37,025	$ -	$ -	USD 1,140,000 $37,025	$ -	51.51%	$ -	$ -	$ -

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Attachment 7: Investment in Mainland China

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2013	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2013	Net income (loss) of investee company	Percentag e of Ownership	Investment income (loss) recognized	Carrying Value as of December 31, 2013	Accumulated Inward Remittance of Earnings as of Outflow December 31, 2013
					Outflow	Inflow
JY Sinact	Manufacturing and selling a wide variety of electronic materials.	HKD 73,980,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 5,666,000 $177,159	$ -	$ -	USD 5,666,000 $177,159	$ -	100.00%	$ - (Note 1)	HKD18,636,000 $76,215	$ -
Shang Hai Comtek Electronics Trading Co., ltd.	Selling a wide variety of electronic materials.	USD 160,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 104,000 $3,302	$ -	$ -	USD 104,000 $3,302	$ -	51.06%	$ -	$ -	$ -
Dong Guan CMK	Manufacturing and selling a wide variety of connectors, wires and ~~cables.~~	USD 1,000,000	Indirectly investment in Mainland China through companies registered in a ~~third region.~~	USD 645,000 $20,768	$ -	$ -	USD 645,000 $20,768	$ -	51.06%	$ -	$ -	$ -
T-CONN Zhongshan	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 5,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 3,086,000 $99,007	$ -	$ -	USD 3,086,000 $99,007	USD(1,734,000) ($52,656)	64.48%	USD(1,734,000) ($52,656) (Note 3)	USD(269,000) ($8,546)	$ -
BJSB Tongan	Manufacturing and selling a wide variety of connectors,wires and	USD 3,000,000	Indirectly investment in Mainland China through remittance from a third	USD 3,000,000 $89,134	$ -	$ -	USD 3,000,000 $89,134	$179,576	100.00%	$179,576 (Note 1)	$274,205	$ -
Accumulated Investment in Mainland China as of December 31, 2013 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment USD43,256,000 USD 54,320,000 N/A (Note 4)
Accumulated Investment in Mainland China as of December 31, 2013			Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
USD43,256,000			USD 54,320,000		N/A (Note 4)

Note 1: The financial statements certificated by the public accountant of the parent company in Taiwan.

Note 2:Investee measured at cost.

Note 3: The financial statements certificated by other public accountants.

Note 4: According to No. Shen-Zi-09704604680 issued by Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is not limited to 60% of net worth or consolidated net worth specified by the Investment commission.

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• 6.5. The company or affiliates has/have experienced financial difficulty in the last year and by the report publishing date, and its impact on the corporate financial status: N/A

• 205 -

7. Review and Analysis of Financial Situation and Financial Performance and Risk Items

7.1. Financial situation: Major causes and impact of material changes of assets, liabilities, and shareholder equity in last two years and future responsive plans:

Unit: NT$10,000

			Unit: NT$10,000	Unit: NT$10,000
Year Item	2013	2014	Difference
			Amount	Percentage
Current assets	6,768,638	7,949,062	1,180,424	17.44
Fixed assets	1,554,838	1,539,336	(15,502)	(1.00)
Other assets	145,237	158,299	13,062	8.99
Total assets	9,385,164	10,486,831	1,101,667	11.74
Current liabilities	4,126,418	4,795,863	669,445	16.22
Long-term liabilities	346,460	300,606	(45,854)	(13.24)
Total liabilities	4,731,911	5,402,715	670,804	14.18
Capital stock	2,076,709	2,076,709	-	-
Capital surplus	797,621	746,795	(50,826)	(6.37)
Retained earnings	1,601,051	1,936,291	335,240	20.94
Total equities	4,653,253	5,084,116	430,863	9.26
Note: (1) Current assets increased as cash and A/R increased. (2) Retained earnings increased as revenue and netprofit of the currentperiod increased.

7.2. Financial performance: Major causes of material changes in revenue, net profit margin, and net profit before tax and estimated sales quantity in last two years and their references, and future responsive plans:

Unit: NT$10,000

		2013	2014	2014	Increased) (reduced) amount	Variable proportion %
	Subtotal	Total	Subtotal	Total
Total operating revenue Minus: Sales return + Sales discount Sales income Other operating revenues Net operating revenue amount Operating cost Operating gross profit Minus: End unrealized gross profit Plus: Beginning realized gross profit Net operating gross profit Operating expense	$(49,150)  - -	$10,604,411 (49,150)  10,555,261 -  10,555,261 (8,287,168)  2,268,093 - -  2,268,093 (1,535,095) 	$(37,291)	11,680,010 (37,291)  11,642,719 -  11,642,719 (9,112,319)  2,530,400  2,530,400 (1,579,810) 	1,075,599 11,859  1,087,458 -  1,087,458 (825,151)  262,307  262,307 (44,715) 	10.14 24.13  10.30 -  10.30 9.96  11.57  11.57 2.91 

• 206 -

	2013	2013	2014	2014	Increased) (reduced) amount	Variable proportion %
	Subtotal	Total	Subtotal	Total
Net operating margin Non-operating income and expense Continuing operating income before tax Income tax expense Continuing operating income after ax		732,998 134,046  867,044 (258,618)  $608,426		950,590 92,932  1,043,522 (268,575)  774,947	217,592 (41,114)  176,478 (9,957)  166,521	29.69 (30.67)  20.35 3.85  27.37
Addition/reduction variable analysis: (1) Net profit margin increased as operating revenue increased. (2) Non-operatingincome and expense reduced as other income reduced.

7.3. Cash flows

7.3.1. Analysis of cash flows in last two years

7.3.1. Analysis of cash	flows in last twoyears
Year Item	2013	2014	Increase (reduction) proportion
Cash flow ratio	21.31%	12.84%	(8.47)%
Cash flow adequacyratio	70.83%	95.85%	25.02%
Cash reinvestment ratio	7.36%	1.40%	(5.96)%
Note: Cash flow adequacy ratio rose as cash inflow increased from increasing operating revenue in recentyears.

7.3.2. Analysis of cash flows in the coming year (individual)

7.3.2. Ana	lysis of cash fl	ows in the com	ing year (individual)
				(Unit: NT$1,000)
Beginning cash balances (1)	Estimated net cash flows from annual business activities (2)	Estimated annual cash outflows (3)	Estimated cash balances (shortages) (1)+(2)-(3)	Remedies for Estimated Cash Shortages Investment plans Financial management plans - -
				Investment plans
450,958	5,661,923	5,743,006	369,875	-

7.4. Impact of major capital expenses on finance in recent years.

7.4.1. Utilization and sources of major capital expenses: None.

7.4.2. Estimated benefits: None.

7.5. Re-investment policies and major causes of profits or losses in recent years,

improvement plans, and investment plans in the coming year:

7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:	7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:	7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:	7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:	7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:	7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:
(Unit: NT$1,000)
Description Item	Amount by 31 Dec 2014	Policy	Major causes of P/L	Improvement plans	Other future investment plans
SINBON Electronics Hong Kong	401,262	Center for Mainland product and capital and international	Operations of that company brought profits.	－	－

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Description Item	Amount by 31 Dec 2014	Policy	Major causes of P/L	Improvement plans	Other future investment plans
		trade
Lianding Venture Investment	160,000	Pursuing strategic cooperation opportunities and gainingstable returns.	Operations of the subsidiaries of that company brought profits.	－	－
SINBON International Enterprise Co., Ltd.	1,321,747	Reinvestment framework consideration and international trade.	Operations of the subsidiaries of that company brought profits.	－	－
Guanze Co, Ltd.	235,600	Professional domestic investor.	Operations of the subsidiaries of that company brought profits.	－	－
SINBON Electronics Japan	5,008	Cultivation of and service for Japanese customers.	Operations of that company brought profits.	－	－
SINBON Technologies L.L.C	-	Cultivation of and service for customers in the East Coast of USA	Losses from lower gross profit rate than competitors.	Continuous cultivation of new US customers.	－
Korea SINBON Electronics Co.,Ltd	1,019	Cultivation of and service for South Korean customers.	Operations of that company brought profits.	－	－
Samoa Smart & Diligent Co., Ltd.	101,747	Indirect control of the backlight module business in Mainland.	Operations of the subsidiaries of that company cause losses.	Continuous cultivation of new Mainland customers.	－
SINBON Electronics Beijing	30,719	Cultivation of and service for customers in northern China.	Operations of that company brought profits.	－	－
Argosy Research	30,648	Long-term strategic cooperation.	Operations of that company brought profits.	－	－
Worldwide Wire Harnesses Co., Ltd.	2,451	Indirect holdings, overseas procurement, and international trade.	Operations of the subsidiaries of that company brought profits.	－	－
Super Elite Ltd.	192,742	Indirect control of the electronics part/ component business in Mainland.	Operations of the subsidiaries of that company cause losses.	Continuous cultivation of new Mainland customers.	－
SINBON Electronics (Beijing)	89,134	Cultivation of and service for customers in northern China.	Operations of that company are under development.	Continuous cultivation of new Mainland customers.	－
SINBON USA LLC.	27,864	Cultivation of customers in the USA,	Operations of that company brought profits.	-

7.6. Risk items

• 7.6.1. Impact on profits and losses of interest rate and exchange rate volatility and inflation and future countermeasures:

• 208 -

• (1) Impact on profits and losses of interest rate volatility and future countermeasures in recent years

• By the end of 2014, the amount of long-term debts from banks was NT$12,166,000, with interest rate at 1.1%. We will continuously observe future market changes and take action to prevent risk at appropriate times to reduce potential risk from interest rate volatility.

• (2) Impact on profits and losses of exchange rate volatility and future countermeasures in recent years

• In 2014 the recognized profits from exchange were NT$26,588,000. We have implemented currency hedging to prevent the impact of exchange rate volatility on profits and losses.

• (3) Impact on profits and losses of inflation and future countermeasures in recent years

No unfavorable impact was reported in 2014.

• 7.6.2. Policies for high-risk, high-leverage investments, capital lending to others, endorsement and guarantee for others, and derivatives transaction; major causes for losses and profits; and future countermeasures

• (1) In 2014, we did not engage in high-risk, high-leverage investments.

• (2) In 2014, we provided endorsements and guarantees mainly for the bank loans of subsidiaries. These endorsements and guarantees were provided with reference to the “Endorsements and Guarantees Regulations” and the maximum amount of endorsement and guarantee is NT$2,429,612,000. By the end of 2014, the balance of endorsements and guarantees was NT$2,128,654,000.

• 7.6.3. Future R&D plans and estimated R&D investments Developing electronic products with higher added value was the target of R&D plans in last year. In the future, we will fulfill customer demand in this area and implement all R&D plans as scheduled. In 2014 the group’s R&D spending was NT$351,754,000, 1.55% up from last year, to aggressively develop IoT, warehouse automation equipment, robots, and smart home electronics. At the fourth board meeting in 2014, the board passed the cash capital increase at NT$150 million for DigiO2 to develop in full-scale OEM/ODM products for telecare and portable biomedical devices. It is estimated that the group will invest at least NT$300 million each year or 3% of the group’s operating revenue in R&D.

• 7.6.4. Impact of major policy or legal changes at home and abroad on organizational finance and countermeasures: None.

• 7.6.5. Impact of technology and industry changes on organizational finance and countermeasures

• In response to the rapid change of the high-tech industry, we have a professional R&D team to develop products meeting customer demand to enhance competitiveness.

• 7.6.6. Impact of corporate image on organizational crisis management and

• 209 -

countermeasures

We officially listed on the Taiwan Stock Exchange on 26 August 2002. This will improve our corporate. In the future, we will uphold the corporate spirit and fulfill CSR as a listed company and will seek the greatest benefits for shareholders and employees.

• 7.6.7. Estimated benefits and potential risks of acquisition and countermeasures: N/A

• 7.6.8. Estimated benefits and potential risks of factory expansion and countermeasures: N/A

• 7.6.9. Risk from centralization of material input and sales and countermeasures: N/A

• 7.6.10. Impact and risk of mass share transfer or conversion of directors, supervisors, or major shareholders holding over 10% of shares and countermeasures: None.

• 7.6.11. Impact and risk of right of management change and countermeasures: None.

• 7.6.12. For convicted or in-progress major litigation, non-litigation, or administrative litigation incidents involving the company, directors, supervisors, executives, mortgage responsible persons, major shareholders holding over 10% of shares, and subsidiaries whose outcomes may bring material impact to shareholder equities or stock prices, disclose the fact in dispute, amount, litigation start date, major parties involved, and the status by the report publishing date: None.

• 7.6.13. Other major risks and countermeasures: None.

7.7. Other major items: None.

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8. Special Notes

8.1. Information of affiliates

• 8.1.1. Consolidated business reports of affiliates

• (1) Affiliates organization chart

==> picture [414 x 412] intentionally omitted <==

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

SINBON Electronics Co., Ltd.信邦電子股份有限公司
100% 100% 100% 100% 100% 100% 70% 51% 51.51% 5364 48 . 81 % 50%
92.74% 100% 100% 100% 100% 100% 64 48 % 53.81% 64.48 % 64.48 % 64.48% 50%
100%
有限 冠澤 有限 有限 株式 D i li ge n t S A M O A Harnesses
L.L.C. W o r l d wi d e
L.L.C. Beijing 公 股 公 公(Factory) 會 Technologies SINBON Co ., S mar t Super Elite Ltd. Co.,
SINBON USA Guanze Co., Ltd. (Contact Office) SINBON Beijing Enterprise Co., Ltd. SINBON Nagoya
子有限公司 北京信邦同安電SINBON Electronics 司 份 司 香港信邦電子SINBON Hong Kong 司 北京信邦電子 SINBON International 社(Sales Office) (JPY) 日本信邦電子 L td . & Ltd W i r e
有 有 限 有 SINACT 太 限
限 限 限 康
Ltd. 公 ( 信邦電子 International(Hong 公 ( 太康精密
(Factory) 公 (Factory) 公 公 精
(Sales Office) ) 深圳 (Sales Office) Co., Corporation ) 中山 Tennessee L.L.C
股份有限公司 數碼生醫科技DigiO2 International 司 SINBON Tongcheng 桐城信邦電子 司 SINBON Jiangyin 江陰信邦電子 司 有SINBON Shenzhen 司 上海信邦電子SINBON Shanghai LtdKong) Super Progressive Ltd. 股份有限公司 密T-CONN Precision 司 (Zhongshan) Corporation 有 T-CONN Precision Electronics Co., LtdHong Kong Comtek SINBON Technologies
Co., Ltd.
電子有限公司 江陰信捷正 SINACT Electronics
----- End of picture text -----

(2) Basic information of affiliates

Name	Establishment Date	Paid-in Capital	Address	Major scope of business or products
SINBON Beijing (Factory)	1993.12.20	US$4.4512 million	Building No. 26, Liando U Valley, No. 15, Jingsheng South 4th Street, Majuqiao, Tongzhou, District, Beijing, 101102, China	Production and sales of comprehensive connectors.
SINBON Hong Kong (Contact Office)	1995.6.20	HK$95.6064 million	Unit 05, 18/F, Lemmi Centre,50 Hoi Yuen	Sales of comprehensive cables,connectors,and

• 211 -

Name	Establishment Date	Paid-in Capital	Address	Major scope of business or products
			Road, Kwun Tong, Kowloon,HongKong	other electronic parts and components.
SINBON Shanghai (Sales Office)	1996.3.15	US$3.28 million	3F, Building 60, No. 461, Hong-Cao Rd., Shanghai 200233, China	Sales of comprehensive Cables, connectors, and other electronic parts and components.
Sinbon International Enterprise CompanyLimited	2000.10.24	US$48.1817 million	P.O. Box 3340, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLAND	General investment
SINBON Jiangyin (Factory)	2000.12.15	US$31.28 million	No.288, Middle Cheng Jiang Rd., Jiangyin, Jiangsu Province 214434, China	Production and sales of cables, electronic components, power electronic components, and computer peripherals; R&D, production and sales of GPS modules.
SINBON Shenzhen (Sales Office)	2001.4.20	US$2.812 million	Rm.802, Bld.212, Tairan Industrial Zone, Chegongmiao, Futian District, Shenzhen City, Guangdong Province 518040,China	Sales of comprehensive cables, connectors, and other electronic parts and components.
Sinbon Technologies, L.L.C.	2000.12.04	US$2 million.	273 Lake Breeze Circle, Lake Mary, Florida 32746, U.S.A.	Sales of comprehensive cables, connectors, and other electronic parts and components.
SINBON Nagoya (Sales Office)	2004.09.09	JPN25 million	Chiyoda 4-1-7, Naka-Ku Nagoya City, 460-0012, Japan	Sales of comprehensive cables, connectors, and other electronic parts and components.
Guanze Co., Ltd.	2003.01.22	NT$ 235.60 million	4-1F, No. 79, Xintai 5th Road, Xiji District, New Taipei City, Taiwan	General investment
SINBON Tongcheng (Factory)	2007.07.13	US$6 million	No.168, Xing Long Rd.,Economic Development Zone, Tongcheng City, Anhui Province,China	Production and sales of comprehensive electronic connectors and cables.
SINBON Electronics Beijing	2012.02.16	US$3 million	6F, No. 15, Jingshengnansi Street, Jinqiao Science and Technolgy Industry Basement, Zhongguancun Science and Technology Park, Tongzhou District, Beijing	Production and sales of comprehensive electronic connectors and cables.
DigiO2 International Ltd.	2005.04.28	NT$100 million	3F, No. 582 Kuohwa Road,Miaoli 360,	Production and sales of comprehensive electronic

• 212 -

Name	Establishment Date	Paid-in Capital	Address	Major scope of business or products
			Taiwan	connectors and cables.
Samoa Smart & Diligent Co., Ltd.	2003.07.28	US$6.103 million	Level 2, Lotemau Centre Vaea Street, Apia Samoa	Comprehensive investments
Sinact (Hong Kong) Co., Ltd.	2008.04.07	US$7.51 million	Unit 05, 18/F, Lemmi Centre, 50 Hoi Yuen Road, Kwun Tong, Kowloon,HongKong	General investmentss
SINBON Jiangyin (Factory)	2008.03.11	US$9.5 million	No.288, Middle Cheng Jiang Rd., Jiangyin, Jiangsu Province 214434, China	Production, processing, and sales of PCB
Worldwide Wire Harnesses Co.,Ltd.	2007.04.24	US$0.15 million	Samoan Islands	Overseas sales center
SINBON Technologies Tennessee Co.,LLC.	2007.08.16	US$0.15 million	211 Industrial Park Drive Cumberland City,TN 37050	Overseas sales center
Sinbon USA LLC.	2014.05.29	US$0.9 million	216th street SW,Suite D Lynneood WA 98036	Overseas sales center
T-CONN Precision Corporation	2002.02.20	NT$10 million	4-3F, No. 79, Xintai 5th Road, Xiji District, New Taipei City, Taiwan	Sales of connectors and other electronic parts and components.
Super Elite Limited	2001.10.01	US$10.1272 million	2nd Floor, Felix House, 24 Dr. Joseph Riviere Street, Port Louis, Republic of Mauritius	General investments
T-CONN Precision (Zhongshan) Corporation	2001.12.21	US$7.1 million	Torch Hi-tech Industrial Development Zone Sub-district, Zhongshan City, Guangdong Province, China	Production and sales of connectors and other electronic parts and components.
Super Progressive Limited	2003.01.30	UD$0.1 million	2nd Floor, Felix House, 24 Dr. Joseph Riviere Street, Port Louis, Republic of Mauritius	Offshore trading center
Hong Kong Comteck Electronics Co.,Ltd.	2007.08.07	US$4.62 million	12/F NO.3 LOCKHART ROAD WANCHAI HK	Sales of connectors and other electronic parts and components.

• (3) Information of the same shareholders in re-invested enterprises with controlling power and a subsidiary relationship: None

(4) Directors, supervisors, and presidents of subsidiaries

Name	Title	Name or Representative	Shares Held
			Shares	Percentage
SINBON Beijing	Chairman	Joseph Wang	US$4.4512 million	100.00%

• 213 -

Name	Title	Name or Representative	Shares Held
			Shares	Percentage
(Factory)	Director Director President (concurrent)	Xiao-jing Chi Wei-ming Liang Chi-zhong Chen (All are representatives of SINBON Electronics)
SINBON Hong Kong (Contact Office)	Director	Joseph Wang, Wei-ming Liang,Huang-ji Lin, Ji-zhou Zhang (All are representatives of SINBON Electronics)	HK$95.6064 million	100.00%
SINBON Shanghai (Sales Office)	Chairman Director Supervisor	Joseph Wang Wei-ming Liang, Xiu-sui Lin Ji-zhou Zhang (All are representatives of Sinbon International Enterprise Company Limited)	US$3.28 million	100.00%
Sinbon International Enterprise CompanyLimited	Chairman	Joseph Wang (Representative of SINBON Electronics)	US$48.1817 million	100.00%
SINBON Jiangyin (Factory)	Chairman Director Supervisor	Joseph Wang Wei-ming Liang, Ji-zhou Zhang, Yan-hua Wang, Xin-chun Wu,Huang-ji Lin (All are representatives of Sinbon International Enterprise Company Limited)	US$31.28 million	100.00%
SINBON Shenzhen (Sales Office)	Chairman Director Supervisor	Joseph Wang Wei-ming Liang, Xiu-sui Lin Ji-zhou Zhang (All are representatives of Sinbon International Enterprise Company Limited)	US$2.812 million	100.00%
Sinbon Technologies, L.L.C	Director Director	Wei-ming Liang(Representative of SINBON Electronics) Steve Confield	-	51.00%
SINBON Nagoya (Sales Office)	Chairman Director Supervisor	Cun-miao Li Joseph Wang, Sho-xing Huang(Representative of SINBON Electronics) Ashihara Kingo(Representative of Orient Computer Ltd.)	350 shares	70.00%
Guanze Co., Ltd.	Chairman Director Supervisor	Joseph Wang Xin-chi Yeh, Ji-zhou Zhang Jun-qiang Wang (All are representatives of Sinbon International Enterprise Company Limited)	23,560,000 shares	100.00%
SINBON Tongcheng (Factory)	Chairman Director Supervisor	Wei-ming Liang Ji-zhou Zhang, Guo-cai Song Huang-ji Lin (All are representatives of Sinbon International Enterprise Company Limited)	US$6 million	100.00%
SINBON	Chairman	Joseph Wang	US$3 million	100.00%

• 214 -

Name	Title	Name or Representative	Shares Held
			Shares	Percentage
Electronics Beijing	Director Director President (concurrent)	Xiao-jing Chi Wei-ming Liang Chi-zhong Chen (All are representatives of Sinbon International Enterprise Company Limited)
DigiO2 International Ltd.	Chairman Director Supervisor	Wei-ming Liang Hun-song Chen, Jun-xing Liang ]Ji-zhou Zhang (these four people are all representatives of Guanze Co.,Ltd.)	10,000,000 shares	92.74%
Samoa Smart & Diligent Co., Ltd.	Director Director	Jian-ming Xie Joseph Wang(Representative of SINBON Electronics)	US$3.14354 million	51.51%
Sinact (Hong Kong)Co.,Ltd.	Chairman	Joseph Wang (Representative of SINBON Electronics)	US$7.51 million	100.00%
SINACT Electronics Co., Ltd.	Chairman Director Supervisor	Wei-ming Liang Yu-ling Xie, Chi-zhong Chen Huang-ji Lin,Ji-zhou Zhang	US$9.5 million	100.00%
Worldwide Wire Harnesses Co., Ltd.	Director Director Director	Wei-ming Liang(Representative of SINBON Electronics) Zi-wei Lin LESLIE ROY WELCH (representative of Tennessee Wire Technologies LLC)	US$0.75 million	50.00%
SINBON Technologies Tennessee Co., LLC.	Director Director Director	Wei-ming Liang(Representative of SINBON Electronics) Zi-wei Lin LESLIE ROY WELCH (representative of Tennessee Wire Technologies LLC)	US$0.75 million	50.00%
Sinbon USA LLC.	Chairman	Wei-ming Liang(Representative of SINBON Electronics)	US$0.9 million	100.00%
T-CONN Precision Corporation	Chairman Director Director Supervisor	Xin-chi Yeh Joseph Wang Jun-qiang Wang Ji-zhou Zhang (these four people are all representatives of Super Elite Ltd)	NT$6.448 million	64.48%
Super Elite Limited	Chairman Director Director Director Director	Xin-chi Yeh Joseph Wang Ji-zhou Zhang (these four people are all representatives of SINBON Electronics) Jun-qiang Wang (representative of Wistron Corporation) Fu-qian Lin (representative of Wistron Corporation)	US$6.53426 million	64.48%
T-CONN Precision (Zhongshan) Corporation	Chairman Director Director	Xin-chi Yeh Joseph Wang Jun-qiang Wang (these three people are all representatives of Super Elite Ltd)	US$4.578 million	64.48%
Super Progressive Limited	Chairman	Xin-chi Yeh (representative of Super Elite Ltd)	US$64,480	64.48%
HongKong	Director	Rong-yu Wang,Joseph Wang,Xin-chi	US$2.08033 million	51.06%

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Name	Title	Name or Representative	Shares Held
			Shares	Percentage
Comteck Electronics Co., Ltd.		Yeh (Joseph Wang and Xin-chi Yeh are representatives of SINBON Electronics)

(5) Operational performance of affiliates (2014)

Name	Authorized Capital	Total Assets	Total Liabilities	Net Worth	Operating Revenue	Operating Income	Current P/L (after tax)	EPS (after tax)
SINBON Beijing (Factory) (RMB/CNY)	32,828,852	127,371,672	2,771,143	124,600,529	42,610,340	(3,361,625)	(367,716)	-
SINBON Hong Kong (Contact Office) (HKD))	95,606,400	252,194,251	109,048,812	143,145,439	436,601,612	68,491,781	49,230,444	-
SINBON Shanghai (Sales Office) (RMB/CNY)	25,401,762	58,004,076	11,530,151	46,473,925	86,993,690	(367,478)	394,370	-
Sinbon International Enterprise Company Limited (USD)	46,681,715	94,203,814	0	94,203,814	0	0	6,911,859	-
SINBON Jiangyin (Factory) (RMB/CNY)	241,032,010	619,112,462	200,166,422	418,946,040	762,769,965	51,663,018	36,845,321	-
SINBON Shenzhen (Sales Office) (RMB/CNY)	17,924,155	80,645,755	20,789,729	59,856,026	61,810,375	4,820,699	3,360,020	-
Sinbon Technologies,L. L.C (USD)	200	608,939	695,419	(86,480)	4,084,262	(23,418)	(23,418)	-
SINBON Nagoya (Sales Office) (JPY)	25,000,000	157,499,790	122,093,683	35,406,107	381,211,883	2,217,900	6,193,233	-
Guanze Co., Ltd. (TWD)	235,600,000	297,647,722	1,281,470	296,366,252	0	(120,111)	3,391,505	0.14
SINBON Tongcheng (Factory) (RMB/CNY)	42,826,700	90,879,601	37,239,111	53,640,490	59,432,399	971,402	1,993,223	-
SINBON Electronics Beijing (RMB/CNY)	18,513,390	172,712,379	119,078,257	53,634,122	309,178,561	49,329,597	36,358,736	-
Sinbon USA	900,000	885,192	4,538	880,654	0	(19,346)	(19,346)	-

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Name	Authorized Capital	Total Assets	Total Liabilities	Net Worth	Operating Revenue	Operating Income	Current P/L (after tax)	EPS (after tax)
LLC. (USD)
T-CONN Precision Corporation (TWD)	10,000,000	188,500,653	169,046,904	19,453,749	575,043,142	(8,358,376)	(7,902,676)	-
Super Elite Limited (USD)	10,127,247	5,626,821	1,920,987	3,705,834	0	0	(1,763,758)	-
T-CONN Precision (Zhongshan) Corporation (RMB/CNY)	54,268,753	41,437,911	43,109,489	(1,671,578)	78,058,770	(7,014,091)	(10,661,224)	-
Super Progressive Limited (USD)	100,000	4,717,192	2,654,181	2,063,011	13,063,230	260,812	254,737	-
DigiO2 International Ltd. (TWD)	100,000,000	86,890,743	15,523,159	71,367,584	38,829,156	(32,058,854)	(23,119,797)	-
Samoa Smart & Diligent Co., Ltd. (USD)	6,103,014	730,778	70,414	660,364	0	0	(1,241)	-
Sinact(Hong Kong) Co., Ltd. (HKD)	58,503,300	18,651,041	15,550,600	3,100,441	0	(8,167)	21,895	-
Sinact (Hong Kong) Co., Ltd. (RMB/CNY)	64,568,072	86,965,125	72,057,569	14,907,556	96,626,595	2,897,192	0	-
Worldwide Wire Harnesses Co., Ltd. (USD)	150,000	363,017	2,065	360,952	0	(781)	71,552	-
SINBON Technologies Tennessee Co., LLC. (USD)	139,980	1,112,959	1,235,139	(122,180)	2,088,717	72,321	72,321	-
Hong Kong Comteck Electronics Co., Ltd. (HKD)	35,980,818	12,792,653	0	12,792,653	0	0	0	-

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8.1.2. Consolidated financial statement of subsidiaries

Statement of Compliance

Our consolidated financial statement for 2014 (period: 1 January 2014 to 31 December
2014), contains the companies that should be included in the consolidated financial
statement and accounting for investments in subsidies as required in the “Criteria Governing
Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial
Statements of Affiliated Enterprises” and the companies that should be included in the
consolidated financial statement of the parent company and subsidies as required in the IAS
27–Consolidated Financial Statements and Accounting for Investments in Subsidiaries are
the same. In addition, as the information that should be disclosed in the consolidated
financial statement of subsidiaries has been disclosed in the said consolidated financial
statement for the company and subsidiaries, no separate consolidate financial statements
for subsidiaries will be published.

SINBON Electronics Co., Ltd.

Joseph Wang
Chairman
Date: 30 March 2015

• 8.2. Private placement of securities in last year and by the report publishing date: None.

• 8.3. Holding or settling corporate stocks in last year and by the report publishing date: None.

8.4. Other supplementations: None.

1. Incidents with significant impact on shareholder equities or market prices as specified in item 2 of paragraph 2 of Article 36 of the Securities and Exchange Act in last year and by the report publishing date: None.

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