SINBON Electronics — Annual Report 2016

Jun 17, 2016

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Code: 3023

SINBON Electronics Co., Ltd.

Annual Report 2015

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 April 30, 2016

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

1. 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

2. Stock transfer service

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

1. 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

1. Overseas listing: None

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

Table of Contents

	Table of Contents
		Page
1.	Letter to Shareholders	1
	1.1. Business Performance in 2015	2
	1.2. Summary of Business Plan in 2016	3
	1.3. Future Development Strategy	3
	1.4. Effect of External Competitions, Legislation, and the Overall Business	3
	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	36
	3.6. CPA Change Information	37
	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.	37
	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.	37
	3.9. Information of Top Ten Shareholders Who Are Interested Parties,
	Spouse, Relatives within Second Degree	39
	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	40
4.	Fundraising
	4.1. Capital and Shares	42
	4.2. Corporate Bonds	47
	4.3. Issue of Preferred Shares	49
	4.4. Issue of GDR	49
	4.5. Issue of Certificates of Employee Stock Subscription	49
	4.6. Issue of Employee Restricted Shares	49
	4.7. Acquisition (including mergers, buyouts, and spin-offs)	49
	4.8. Items to be Disclosed in Capital Utilization Plans	49
5.	Operational Highlights
	5.1. Business Activities	50
	5.2. Market and Production-Sales	72
	5.3. Number, Average Service Length, Average Age, and Education

		Distribution of Employees in Last Two Years and by Report Publishing
		Date	76
	5.4.	Environmental Expenses	76
	5.5.	Labor-Management Relations	77
	5.6.	Material Contracts	79
6.	Financial Highlights
	6.1.	Condensed Balance Sheet, Integrated Income Statement, CPA Name	81
		and Comments
	6.2.	Financial Analysis of the Last Five Years	86
	6.3.	Supervisor or Auditor Audit Report of Financial Statements in the Last	88
		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	89
		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	191
7.	Review and Analysis of Financial Situation and Financial Performance and Risk
	Items
	7.1.	Financial Situation	192
	7.2.	Financial Performance	192
	7.3.	Cash Flows	193
	7.4.	Impact of Major Capital Expenses on Finance in Recent Years	193
	7.5.	Re-investment Policies and Major Causes of Profits or Losses in Recent
		Years, Improvement Plans, and Investment Plans in the Coming Year	193
	7.6.	Risk Items	195
	7.7.	Other Major Items	196
8.	Special Notes
	8.1.	Information of affiliates	197
	8.2.	Private placement of securities in the last year and by the report
		publishing date	204
	8.3.	Holding or settling corporate stocks in the last year and by the report
		publishing date	204
	8.4.	Other supplementations	204
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		204

1. Letter to Shareholders

1.1. Business Performance in 2015

• 1.1.1. Performance of business plan 2015

The business performance of SINBON Electronics in 2015 was as follows: consolidated revenue came in at NT$12,111,258 thousand, 4.02% up from 2014; consolidated gross profit rate was 22%, 0.75% up from 2014; consolidated net profit after tax at NT$954,103 thousand, plus the non-controlling interest (the interest of other shareholders of re-invested enterprises with non-controlling ownership) was NT$16,092 thousand, the sum was NT$970,195 thousand, 22.23% up from 2014; and consolidated EPS after tax was NT$4.53, NT$0.71 up from 2014.

• 1.1.2. Budget execution

• Compared to the business plan of 2015, revenue completion rate in 2015 was 93%, actual gross profit margin was 22%, equivalent to the planned gross profit margin; actual net operating income was NT$1,066,789 thousand, with the plan completion rate at 93%; and the actual net profit after tax was NT$970,195 thousand, with the plan completion rate at 103%. Revenue and profit completion was great.

• 1.1.3. Revenue and profitability analysis

Revenue and profit completion was great. Revenue andprofitabilityanalysis
Item	2014	2015
Cash from operatingactivities(NT$1,000)	615,562	1,452,674
Cash from(used in)investingactivities(NT$1,000)	3,455	(556,884)
Cash used in financingactivities(NT$1,000)	(224,257)	(274,790)
Return on assets(%)	8.10	9.13
Return on equity (%)	15.92	17.80
Profit Before Tax to Capital Stock(%)	50.25	62.95
Profit Margin(%)	6.66	7.88
EPS(NT$)	3.82	4.53

Cash provided by operating activities was 235.99% more than in 2014 because of the increases in net profit after tax and other payables, and the decreases in accounts receivable in 2015, thus increasing cash provided by operating activities. The cash flows provided by investing activities in 2015 were outflow because of the acquisition of Property, plant and equipment, Financial assets measured at cost, and Debt instrument investments for which no active market exists. Cash outflows in operating activities were 22.53% more than in 2014 because of convertible bond offering in 2014 and increase in paying cash dividend in 2015.

• 1.1.4. Research and development

• Before 2015, 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 2015 we invested a total of NT$384,192 thousand on research and development, with 9.22% more than last year, to actively develop electronic parts and components for the Internet of Thing (IoT), robots, and smart home. At the 4[th] board meeting of 2015, we even passed a joint venture in Ray Service AVA Co., Ltd with Czech Ray Service a. s. company for creating aerospace products. It is estimated that we will

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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 in 2016

• 1.2.1. Business policy of 2016

• (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.

• (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 M edical, A utomotive, G reen energy, I ndustrial application, and C ommunication (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.

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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 in 2015 was worst, thanks to successful organizational transformation, we successfully entered MAGIC industries to gradually transform from consumer products toward industrial application products. While raising revenue by 4.02% higher than in 2014, our net profit after tax strongly grows by 22.23% as well. Looking into 2016, profit and revenue will continue to increase if the Company gets into aviation and military industry successfully.

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 2016, 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: December 6[th] of 1989.

2.2. Milestones:

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

• 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.

• Jun 2015 The board passed an investment of not more than NT$50 million for investing in Elcotronic Co., Ltd.

• Jul 2015 The board passed a joint venture in Ray Service AVA Co., Ltd with Czech Ray Service a. s. company for creating aerospace products.

• Oct 2015 The board passed a renewed investment of not more than NT$62 million for investing in Elcotronic Co., Ltd.

• 2.2.2. Mass transfer or replacement of shares of directors, supervisors, or shareholders holding over 10% of shares:

• On February 26, 2016, the representative of Tai-Yi Investment Co., Ltd, director of SINBON, Wei-Chun Wang sold 500,000 shares in the market.

• 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 March 11, 2016 the board passed the distribution of cash dividends at NT$3.10/share and distribution of stock dividends for additional paid-in capital at NT$0.3/share. The proposal will be submitted to the shareholders’ meeting for recognition on June 17, 2016.

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3. Corporate Governance

3.1. Organization

3.1.1. Organizational structure of SINBIN

3.1. Organization 3.1.1. Organizational structure of SINBIN	3.1. Organization 3.1.1. Organizational structure of SINBIN
3.1.2. Functions and duties of major departments Public Affairs Department Board of Directors CEO Audit Office Supervisors Group Administration Division Human Resources Department IT Department Legal Affairs Department Marketing and Strategic Development Department Administration Department Wage Compensation Committee Business Units Financial Division Shareholders’ Meeting 10 Business Units COO Subsidiary Financial Department Development & Manufacture Service Division
Department and Supervisor	Functions and Duties
Wage Compensation Committee Chairman: Chi-lin Wei, Independent Director Committee member: Pi-Hsia Hsu-Chung, independent individual. 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 April 19, 2016)

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
Chairman	ROC	Joseph Wang	Jun 11, 2015	3	Dec 6, 1989	4,625,023	2.19%	4,774,905	2.19%	2,069,184	0.95%	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	Jun 11, 2015	3	Nov 4, 1997	2,154,160	1.02%	2,196,503	1.01%	0	0.00%	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, rep of Argosy Research Inc.	Jun 11, 2015	3	May 16, 1998	3,624,354	1.72%	3,695,596	1.70%	302,322 (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	Jun 11, 2015	3	May 6, 2005	1,001,228	0.47%	1,020,908	0.47%	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	Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.	Jun 11, 2015	3	May 6, 2005	3,540,000	1.68%	4,010,309	1.84%	1,125,409 (Shares held by Wei-Chun Wang)	0.52%	607,505 (Shares held by Wang’s wife and	0.28%	Chengchi University MBA Manager, , Top Taiwan Investment & Development	Chairman, Tai-Yi Investment. Chairman, Jincaiju Construction.	Chairma n	Joseph Wang	Father and son

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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
												children)
Independen t director	ROC	Chi-lin Wei	Jun 11, 2015	3	Jun 9, 2006	0	0%	0	0%	0	0%	0	0%	PhD in Economics, 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	8	N/A	N/A	N/A
Independen t director	ROC	Shi-Kuan Chen	Jun 11, 2015	3	Jun 11, 2015	0	0%	0	0%	0	0%	0	0%	PHD of Economics, Yale University, USA. Director, TSEC Director, Taiwan Tobacco and Liquor Company Associate Dean of Business school in Taiwan University	Professor, Taiwan University Independent Director, Chung Hwa Pulp Company Independent Director, momo.com Inc. Independent Director, DBS Taiwan Bank Supervisor, EDOM TechnologyCo.,Ltd.	N/A	N/A	N/A
Supervisor	ROC	Min-zheng Lin	Jun 11, 2015	3	Apr 12, 2001	189,908	0.09%	193,640	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	Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd.	Jun 11, 2015	3	Jun 11, 2015	2,500,000	1.18%	2,345,210	1.08%	101,965 (Shares held by Kuo-Hong Wang)	0.05%	0	0%	William Rainey Harper College Chairman & CEO, Kuo-Shian Investment Co., Ltd.	Chairman, Global Aluminum LLC. Chairman, Zhen-Bon Industrial Co., Ltd. Supervisor, G-Tech Optoelectronics Corp.	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
															Supervisor, Tang-Juan Company
Supervisor	ROC	Andy T.C. Chiu	Jun 11, 2015	3	Jun 18, 2002	189,931	0.09%	193,664	0.09%	0	0%	0	0%	MBA, National Cheng Chi University. President, Top Taiwan Investment & Development. President, Top Taiwan Venture Capital. President,Taiwan Life	9	N/A	N/A	N/A

• 1The Companys must list their name and representative (representatives of the Companys must indicate the the Company 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 the Company), chairman of SINBON Hong Kong (representative of the Company), chairman of SINBON Shanghai (representative of the Company), chairman of SINBON Shenzhen (representative of the Company), chairman of SINBON Jiangyin (representative of the Company), chairman of Guanze, chairman of SINBON International (representative of the Company), chairman of Japan SINBON (representative of the Company), director of SAMOA Smart & Diligent Co., Ltd. (representative of the Company), supervisor of Argosy Technology (representative of the Company), chairman of Top Taiwan Venture Capital (representative of the Company), chairman of Top Taiwan II Venture Capital (representative of the Company), director of Top Taiwan III Venture Capital (representative of the Company), director of Top Taiwan VII l Venture Capital (representative of the Company), independent director of AOPEN Inc, director of INPAQ Technology (representative of the Company), director of T-CONN Precision (representative of the Company), director of T-CONN Precision Zhongshan (representative of the Company), director of Super Elite Ltd. (representative of the Company), director of Super Progressive Ltd. (representative of the Company), chairman of Xinbang Material Technology(representative of the Company), director of COMTEK Electronics (representative of the Company), and director of Beijing SINBON Tongan Electronics (representative of the Company).

• 5Director of Guanze (representative of the Company), director of Argosy Beijing (representative of the Company), chairman of T-CONN Precision (representative of the Company), chairman of T-CONN Precision Zhongshan (representative of the Company), and chairman of Super Elite Ltd. (representative of the Company).

• 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 the Company), director of Top Taiwan II Venture Capital (representative of the Company), and director of Top Taiwan V Venture Capital (representative of the Company).

• 7Director of Worldwide Wire Harnesses Ltd. (representative of the Company), chairman of SINBON Tongcheng (representative of the Company), chairman of DigiO2 International (representative of the Company), director of SINBON Jiangyin (representative of the Company), director of SINBON Hong Kong (representative of the Company), director of SINBON Beijing (representative of the Company), director of SINBON Technologies (representative of the Company), director of Beijing SINBON Tongan (representative of the Company), director of SINBON Shenzhen (representative of the Company), director of SINBON Shanghai (representative of the Company), and chairman of Ray Service ADA Corp.

• 8Chairman of Top Taiwan IV 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 I ~ X venture capitals and Top Taiwan Venture Investment Consulting; chairman ; 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 The Company

(April 19, 2016)

	Table 1: Major Shareholder of The Company (April 19,2016)
Name of The Company1 Argosy Research Inc. Tai-Yi Investment Co., Ltd. Kuo-Shian Investment Co.,Ltd.	Major Shareholders of The Company2
	Guanze (17.81%), Cao-liang Wang (7.31%), SINBON Electronics (3.59%), Shu-zhen Chen (3.57%), Xiu-xi Chen (2.96%), Yi-ben Yuan (2.54%), Top Taiwan V Venture Capital (2.04%), Sheng-wen Wang (1.59%),Yue-ningWang (1.21%),and Xing-yi Liu(1.02%).
	Wei-chun Wang(28.68%), Zhen-chun Wang(28.68%), Jun-xing Liang(9.23%), Xin-chi Yeh(8.80%), Wei-ming Liang(8.19%), Jun-qiang Wang(8.00%), Mu-xiao Liu(4.72%), Huang-ji Lin(1.92%),and Chi-Chou Chang (1.78%)
	Kuo-Hong Wang(33.33%), Xing-hui Liu(33.33%), Xiang Wang(33.33%)

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

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

Table 2: Major Shareholders of Major The Companys in Table 1

(April 19, 2016)

Table 2:	Major Shareholders of Major The Companys in Table 1 (April 19,2016)
Name of The Companyin Table 11	Major Shareholders of The Company2
Guanze Co., Ltd.	SINBON Electronics (100%)
SINBON Electronics Co., Ltd.	Fubon Life Insurance Co., Ltd. (4.74%), Joseph Wang (2.19%), Tai-Yi Investment Co., Ltd. (1.84%), China Life Insurance Co., Ltd.(1.77%), Argosy Research (1.70%), trust account of Joseph Wang at Taishin Bank (1.38%), trust account of UBS at HSBC Bank (Taiwan) Co., Ltd. (1.35%), fiduciary account of European Credit Suisse Securities –Renaissance Long-term sales of Standard Chartered Bank (1.21%), fiduciary account of the UBS (Lux) Equity SICAV– Emerging Markets Equity investment accounts of Standard Chartered Bank (1.20%), and Fubon Property& CasualtyInsurance(1.17%).
Top Taiwan V Venture Capital	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%).

1Fill in the corporation name for the Companys in Table 1.

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

• 10 -

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
Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.	No	No	Yes	�	�			�	�	�		�	�	0
Chi-lin Wei	Yes	No	Yes	�	�	�	�	�	�	�	�	�	�	2
Shi-Kuan Chen	Yes	No	Yes	�	�	�	�	�	�	�	�	�	�	3
Min-zhengLin	No	No	Yes	�	�	�	�	�	�	�	�	�	�	0
Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd.	No	No	Yes	�	�	�	�	�	�	�	�	�	�	0
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.

• 11 -

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

						(April 19,2016)	(April 19,2016)	(April 19,2016)	(April 19,2016)	(April 19,2016)
Title1	Nationality	Name	Inaugural (elected) Date	Shares Held		Shares Currently Held by Spouse/ Minor Children		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.
				Shares	%	Shares	%	Shares	%			Title	Name	Relations hip
President	ROC	Wei-ming Liang	5 Jan 1998	1,020,908	0.47%	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	Aug 6, 2001	137,558	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	Aug 1, 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	Ping LI	Oct 1, 1996	98,273	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	Aug 15,1997	37,575	0.02%	741	0%	0	0%	BA in English, Tamkang University.	5	N/A	N/A	N/A
Director	ROC	Wen-sen Huang	Feb11, 1998	223,888	0.10%	0	0%	0	0%	Dip. in Industrial Design, National Taipei Institute of Science and Technology. Marketing Chief, AMP MarketingManager,IR-TEC International.	Director of SINBON Europe GmbH (representative of the Company)	N/A	N/A	N/A
Director	ROC	Hong-kai Luo	Jun 14, 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	Nov 1, 2000	32,463	0.01%	444	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
Director	ROC	Jun-yu Chen	Oct 1, 2000	56,459	0.03%	0	0%	0	0%	LLM, Law School, Fudan University. HR and Sales Manager, Tsankuen Shanghai. Director,Administration Division,Want	N/A	N/A	N/A	N/A

• 12 -

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
										Want Holdings Limited
Director	ROC	Li-hua Zhang	Oct 1, 2001	1,069	0.00%	1,250	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	Apr 21, 1997	9,903	0.00%	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	Oct 1, 2000	218,827	0.10%	207,745	0.10%	0	0%	MBA, National Chung Hsing University BA in Accounting, Chung Yuan Christian University. Associate Manager,Diwan & Company	5	N/A	N/A	N/A
Director	ROC	Jun-qiang Wang	Oct 1, 2014	152,948	0.07%	152,948	0.07%	0	0%	MBA, Rutgers University. BS in Industrial Engineering, Tunghai University. Capital Market Assistant Manager, Taiwan Securities	Supervisor of Guanze. Director of T-CONN Precision, SEL, and T-CONN Precision Zhongshan (representative of the Company)	N/A	N/A	N/A
Ass. Director	ROC	Cheng-ling Li	Sep 1, 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	Sep 1, 2014	29,518	0.01%	0	0%	0	0%	Ging Chung Business College Sales Officer, Connector BU, SINBON Taiwan.	Director of SZ SINBON (representative of the Company)	N/A	N/A	N/A
Ass. Director	ROC	Zhi-xiang Zhang	Sep 1, 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	Sep 1, 2014	203	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	Sep 1, 2014	0	0%	61	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	Sep 1, 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	Oct 1,2014	839	0%	0	0%	0	0%	6	Director of JY SINBON	N/A	N/A	N/A

• 13 -

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
											(representative of the Company)
Ass. Director	ROC	Bing-chen Song	Oct 1, 2014	1,640	0%	0	0%	0	0%	Ping Tung College of Technology Sales Manager,Wieson Technologies	N/A	N/A	N/A	N/A
Ass. Director	ROC	Hao-min Hsu	Oct 1, 2014	76	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	Oct 1, 2014	0	0%	0	0%	0	0%	College Plant Manager,Golden Bridge Electech	N/A	N/A	N/A	N/A
Ass. Director	ROC	Min-zheng Lin	Jun 1, 2015	571	0%	0	0%	0	0%	Department of Electronic Engineering, National United University Section Chief of ECH-CAST MFG. CORP.	N/A	N/A	N/A	N/A
Ass. Director	ROC	Lian-jing Huang	Jun 1, 2015	47,126	0.02%	0	0%	0	0%	National Taipei University of Business Accountant of Accor Knitting Company Casher & Procurement staff of SINBON	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.

3 Director of Worldwide Wire Harnesses Ltd. (representative of the Company), chairman of SINBON Tongcheng (representative of the Company), chairman of DigiO2 International (representative of the Company), director of SINBON Jiangyin (representative of the Company), director of SINBON Hong Kong (representative of the Company), director of SINBON Beijing (representative of the Company), director of SINBON Technologies (representative of the Company), director of Beijing SINBON Tongan (representative of the Company), director of SINBON Shenzhen (representative of the Company), director of SINBON Shanghai (representative of the Company), and chairman of Ray Service ADA Corp.

4Director of SINBON Hong Kong (representative of the Company), supervisor of SINBON Jiangyin (representative of the Company), and supervisor of SINBON Tongcheng (representative of the Company).

5Director of SINBON Hong Kong (representative of the Company), supervisor of SINBON Shenzhen (representative of the Company), supervisor of SINBON Shanghai (representative of the Company), supervisor of DigiO2 (representative of the Company), director of Guan Ze (representative of the Company), supervisor of T-CONN (representative of the Company), director of Super Elite Ltd. (representative of the Company), supervisor of SINBON Tongan Electronics Beijing (representative of the Company), director of SINBON Tongcheng (representative of the Company), director of SINBON Jiangyin (representative of the Company), , supervisor of SINBON Electronics Beijing (representative of the Company), supervisor of Ray Service ADA Corp., and supervisor of Hong Kong Comteck Electronics Co., Ltd. (representative of the Company). 6Not provided.

• 14 -

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

3.3.1. Directors (including independent directors)

(December 31, 2015/NT$1,000)

Title	Name			Remuneration	Remuneration	paid to directors	paid to directors	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	-	-	-		-10,500	10,500	410	410	1.12%	1.12%	5,604	6,324		-	~~-~~ 8,110	-	8,110		~~-~~ -		~~-~~ -	-	2.54%	2.61%	-
Director	Wei-ming Liang
Director	Xin-chi Yeh
Director	Cao-liang Wang, rep of Argosy Research
Director	Wei-Chun Wang, rep of Tai-Yi Investment Co.,Ltd.
Independen t Director	Chi-lin Wei
Independen t Director	Shi-Kuan Chen

• 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, rep of Argosy Research; Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.; Chi-lin Wei; Shi-Kuan Chen	Xin-chi Yeh,; Cao-liang Wang, rep of Argosy Research; Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.; Chi-lin Wei; Shi-Kuan Chen
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	10,910,000	10,910,000	24,624,000	25,344,000

• 1The name of directors must be indicated individually (both the name of the Companys 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.

• 16 -

3.3.2. Remunerations Paid to Supervisors

								(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/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	-	-	900	900	50	50	0.10%	0.10%	-
Supervisor	Andy T.C. Chiu	-	-	800	800	50	50	0.09%	0.09%	-
Supervisor	Kuo-Hong Wang, rep of Kuo-Shian Investment Co.,Ltd.	-	-	800	800	40	40	0.09%	0.09%	-

1The name of supervisors must be indicated individually (both the name of the Companys 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

								(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/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	3,296	4,273	-	-	1,349	1,349	3,000	-	3,000	-	0.79%	0.90%	-	-	-	-	-
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	7,645,000	8,622,000
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). The 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. The 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.

• 18 -

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

				(December 31,2015/NT$1,000)	(December 31,2015/NT$1,000)	(December 31,2015/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	-	5,000	5,000	0.52%
	Vice President	Huang-ji Lin
	Vice President	Zhen-xingChen
	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
	Ass. Director	Kong-de Yang
	Ass. Director	Min-zhengLin
	Ass. Director	Lian-jingHuang
	CFO	Chi-Chou Chang

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

2Fill 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.

3Referring 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.

4Directors, 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

• 19 -

remunerations; procedure to remuneration determination; and their relevance to operational performance and future risk.

	(December 31,2015)	(December 31,2015)	(December 31,2015)	(December 31,2015)
Item	Proportion of Total Remuneration Amount in Net Profit after Tax(%)
	2015		2014
	SINBON	All Consolidated Entities	SINBON	All Consolidated Entities
Directors	2.54	2.61	2.49	3.01
Supervisors	0.28	0.28	0.40	0.41
President and Vice Presidents	0.79	0.90	1.00	1.15
Note: Although the amount of remunerations in 2015 was higher than that of 2014, the percentage in net profit after tax remains low.

• (1) The payment policy, standard, and combination of remunerations:

• A. Directors and Supervisors: There is no fixed salary but traveling expenses to attend the Board meeting is NT$ 10,000 every time. According to the Company's Articles of Incorporation, annual remuneration to directors and supervisors was no more than 3% of pre-tax net profit aside as an annual reward

• B. Managers: Referring to other companies’ payment levels and regulations of the Company, managers shall be paid remunerations no less than 1% and no more than 15% of pre-tax net profit and the remunerations shall be paid in first half year and second half year according to performance scores.

• (2) Procedure to remuneration determination; and their relevance to operational performance and future risk:

• A. Procedure steps: a. setup annual performance indexes b. grading c. remuneration amount propose d. remuneration Committee review e. approved by the Board f. distribution.

• B. Relevance: the amount of remunerations was depended on personal performance and the profits of the Company.

3.4. Corporate Governance

3.4.1. Board Operation

Between June 2015 and April 2016, 7 (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	7	0	100%
Director	Wei-ming Liang	7	0	100%
Director	Xin-chi Yeh	6	1	86%
Director	Cao-liang Wang, representative of ArgosyResearch Inc.	7	0	100%
Director	Wei-Chun Wang, rep of Tai-Yi Investment Co.,Ltd.	7	0	100%
Independent Director	Chi-lin Wei	7	0	100%
Independent Director	Shi-Kuan Chen	5	2	71%
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 ofproposals bydirectors for conflicts of interest,the name of directors, proposal

• 20 -

content, reason for recusal, and voting status must be specified: N/A.

• (3) Assessment of performance in improving board function and achieving relevant goals in this year and last year: The Board has established and implemented with the "Self-Evaluation or Peer Evaluation of the Board of Directors”. The Company shall take into consideration its condition and needs when establishing the criteria for evaluating the performance of the board of directors (functional committees), which should cover, at a minimum, the following five aspects:

• A. Participation in the operation of the company;

• B. Improvement of the quality of the board of directors' decision making;

• C. Composition and structure of the board of directors;

• D. Election and continuing education of the directors; and

• E. Internal control.

The criteria for evaluating the performance of the board members (on themselves or peers), should cover, at a minimum, the following six aspects:

• A. Familiarity with the goals and missions of the company;

• B. Awareness of the duties of a director;

• C. Participation in the operation of the company;

• D. Management of internal relationship and communication;

• E. The director's professionalism and continuing education; and

• F. Internal control.

The indexes of board performance evaluation shall be determined based on the operation and needs of the Company and suitable and appropriate for evaluations by the company. Scoring criteria may be modified and adjusted based on the company's needs. The weighted scoring method may be adopted based on the aspects of evaluation.

1If directors and supervisors are entities, the name of the Companys 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. 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 June 2015 and April 2016, 7 (A) board meetings were held, and supervisor attendances are as follows:

Title	Name	Actual Attendance (B)	Actual Attendance Rate (%) (B/A) (Notes)	Remarks
Supervisor	Min-chengLin	7	100%
Supervisor	Kuo-Hong Wang, rep of Kuo-Shian Investment Co.,Ltd.	7	100%
Supervisor	AndyT.C. Chiu	7	100%
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

• 21 -

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 3rd board meeting held in 2014, Supervisor Min-cheng Lin recommended the manager that the Company shall take seats in invested companies and shall clarify the cost structures and expenditures of the invested companies and comparing to other peers when the Company intends to invest in these companies. The recommendation was adopted by the Board. At the 5th board meeting held in 2014, Supervisor Andy T.C. Chiu recommended the amendment of # 33-1 of the Articles of Incorporation should be clear and a firm figure for cash dividend percentage. The recommendation was adopted by the Board.

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’ 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?	� � � �		(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. (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 No No
3. Formation and responsibility of the board of directors: (1) Does the Company establish and implement diversified	�		(1) The Company has established two independent directors. Board members have been selected from	No.

• 22 -

Assessment Item			Status of Implementation1	Non-compliance with the BPP and reasons
	Yes	No.	Performance Summary
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?	� �	�	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.
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.
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,	�		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 liabilityinsurance for directors and	No.

• 23 -

Assessment Item			Status of Implementation1	Non-compliance with the BPP and reasons
	Yes	No.	Performance Summary
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)?			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.
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.

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

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

• 24 -

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	-
External individual	Mu-xiao Liu	No	No	Yes	�	�	�	�	�	�	�	�	0	-
External individual	Pi-Hsia Hsu-Chung	No	No	Yes	�	�	�	�	�	�	�	�	0	-

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

• 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.

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

3If 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”.

• 25 -

• (2) Operation of the Wage and Compensation Committee

• A. Committee members: 3.

• B. Current term: June 22, 2014 to June 10, 2017. By April 22, 2016, 2 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	2	0	100%
Committee Member	Pi-Hsia Hsu-Chung	1	1	50%
Committee Member	Mu-xiao Liu	2	0	100%
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

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 CSR policy and an effective and well-defined reward and punishment system?	� � � �		(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 relevant regulations. (4) The wage and compensation policy of the Company: 1) wage resource planning based on cost efficiencyand risk control;2)wage	No. No. No. No.

• 26 -

Assessment Item			Implementation1	Non-compliance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Yes	No	Performance Summary2
			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.
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 certification in 2002). (7) In 2012, the Company passed ISO 14064-1 GHG inventory for enterprise certification, and we implement GHG inventoryevery	No. No No.

• 27 -

Assessment Item			Implementation1	Non-compliance with the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Yes	No	Performance Summary2
			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?	� � � � � � � � �		(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) & (9) 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.
4. Reinforcement of disclosure of CSR information. (1) Does the Company disclose relevant and reliable CSR information on the	�		(1) The Company voluntarily discloses CSR information on the corporate website, and “environmental sustainability, green	No.

• 28 -

				Implementation1	Non-compliance with the
					Corporate Social
	Assessment Item	Yes	No	Performance Summary2	Responsibility Best Practice Principles for TWSE/GTSM
					Listed Companies and
					Reasons
	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. (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.

4. If the organizational CSR report has passed the verification standards of relevant certification authorities, please specify: (1) The Company’s CSR report has been published since 2015. It was followed by the core options of G4 Guidelines Version, published by Global Reporting Initiative, and following AA1000 (2008) standard. Furthermore, It also approved by SGS-Taiwan.

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

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

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

   • 2If 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, conductguidelines, penalties for	� � �		(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 regularly and irregularly.	No. No.

• 29 -

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 case?	� � �		(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 Protection Policy.	No. No.

• 30 -

(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?			(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.

1Please 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:

• 31 -

(1) Statement of Internal Control

Statement of Compliance of Internal Control System

(March 11, 2016)

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 December 31, 2015 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 March 11, 2016.

SINBON Electronics Co., Ltd.

Joseph Wang Chairman

Wei-ming Liang President

• 32 -

• (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:

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 2015. 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 base date of issuing new shares from the unsecured convertible bond V. 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.

• 33 -

		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.
June 2016	Shareholder	Adoption of the 2014 Business Report and Financial Statements
	Meeting	Result: Adopted.
		Adoption of the Proposal for Distribution of 2014 Profits
		Result: Adopted.
		Election of 7 Directors (including 2 Independent Directors) and
		3 Supervisors
		Result: Elected and announced.
		Proposal of Release the Prohibition on Directors from
		Participation in Competitive Business
		Result: Passed.
		Proposal for a new share issue through capitalization of Capital
		Reserve
		Result: Passed.
		Amendment to the Company's Articles of Incorporation
		Result: Passed.
	Board	Passed election of chairman and assignment 3 members of the
	Meeting	Wage and Compensation Committee.
		Passed the remuneration for 3 members of the Wage and
		Compensation Committee.
		Passed the payout schedule of 2015 dividends.
		Passed the renewal of the load credit line at The Export-Import
		Bank of the ROC, HSBC China, and Taipei Fubon Bank.
		Passed investment in Elcotronic Inc.
July 2015	Board	Passed the consolidated financial statement of Q2 2015.
	Meeting	Determined the base date of issuing new shares from the
		unsecured convertible bond V.
		Passed the renewal of the load credit line at Mizuho Bank, and
		CTBC Bank.
		Passed the joint venture investment and establishment a new
		company, Ray Service AVA Co., Ltd., with Ray Service A. S.
October	Board	Passed the consolidated financial statement of Q3 2015.
2015	Meeting	Determined the base date of issuing new shares from the
		unsecured convertible bond V.
		Passed the annual audit plan for 2016.
		Passed the KPI targets for BU managers.
		Passed the promotion plan of preparing the financial reports by
		ourselves.
		Passed the renewal of the load credit line at Taihsin Bank,
		Bangkok Bank, Land Bank of Taiwan, HSBC Taiwan, and Chang
		Hwa Bank.
		Passed renewal of investment in Elcotronic Inc.
December	Board	Passed “Application to Suspend and Resume Trading Operating
2015	Meeting	Procedures”.

• 34 -

Passed amendment to the Company's Articles of Incorporation. Passed the renewal of the load credit line at Mizuho Bank, Far Eastern International Bank, and HSBC China. Passed amendment to the Rules of Procedure for shareholders' meeting. March 2016 Board Passed the consolidated financial statement and individual Meeting financial statements of 2015. Passed the profit allocation plan of 2015. 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 2015. Passed the Business Plan 2016. Passed the remuneration for members of the Wage and Compensation Committee who were not independent director. Passed amendment to the Operational Procedures for Loaning of Company Funds. Passed the agenda and relevant affairs of the annual shareholders’ meeting of 2016. Determined the base date of issuing new shares from the unsecured convertible bond V. Passed amendment to the Operational procedures for Acquisition and Disposal of Assets. Passed the renewal of the load credit line at Ta Chong Bank and Far Eastern International Bank. April 2016 Board Passed the consolidated financial statement of Q1 2016. Meeting Review of shareholders’ meeting proposals: Announced. Determined the base date of issuing new shares from the unsecured convertible bond V. Reviewed the assessment results of CPA independency: Complied. Passed the renewal of the load credit line at ANZ Bank (Taiwan) Limited and Bank SinoPac. Passed to establish the "Self-Evaluation or Peer Evaluation of the Board of Directors”. Passed to establish the “Procedures of Reporting and Handling Illegal, Unethical or Dishonest Behavior”.

• 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:

Summary of Resignation or Relief of Relevant Roles (by April 30, 2016)

• 35 -

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: NT$1,000)

Company are disclosed as follows:		(unit: NT$1,000
CPA Firm	Ernst & Young Taiwan
Name of CPA (1)	Wen-bi Yan
Name of CPA (2)	Hong-guang Lin
Audit Service Fee	5,200
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	2015

• 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 & YoungTaiwan	Wen-bi Yan	Hong-guangLin	2015	-

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)

				(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	�
4	6,000(incl.)-8,000
5	8,000(incl.)-10,000
6	10,000 and over

• 36 -

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	2015	-
	Hong-guang Lin							2015

1If 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.

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

• 3The 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

3.6.1. Informati	on of Previous CPAs	on of Previous CPAs	on of Previous CPAs	on of Previous CPAs	on of Previous CPAs
Date of change Reasons for change Reasons for termination or rejection of assignment of the client or CPA. Comments and reasons for issuing audit reports without comments in last twoyears. Different opinion with report issuer. Other disclosures	N/A
	N/A
	PartyInvolved			CPA	Client
	Voluntarytermination of assignment			N/A	N/A
	Rejection of assignment			N/A	N/A
	N/A
	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
	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 date:

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

• 37 -

(unit: share)

				(unit: share)	(unit: share)
		2015		ByApril 19 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	149,882	0	0	0
Director	Xin-chi Yeh	42,343	0	0	0
Director	Argosy Research	71,242	0	0	0
Representative of Director	Chao-liang Wang	5,828	0	0	0
Director	Wei-ming Liang	19,680	0	0	0
Director	Tai-Yi Investment Co., Ltd.	258,309	0	0	0
Representative of Director	Wei-Chun Wang	31,334	0	(500,000)	0
Independent Director	Chi-lin Wei	0	0	0	0
Independent Director	Shi-Kuan Chen	0	0	0	0
Supervisor	Min-cheng Lin	3,732	0	0	0
Supervisor	Andy T.C. Chiu	3,733	0	0	0
Supervisor	Kuo-Shian Investment Co., Ltd	145,210	0	0	0
Representative of Supervisor	Kuo-Hong Wang	91,965	0	0	0
President	Wei-ming Liang	19,680	0	0	0
Vice President	Huang-ji Lin	2,651	0	0	0
Vice President	Zhen-xing Chen	0	0	0	0
Director	Ping LI	1,894	0	0	0
Director	Qi-zhong Chen	(7,218)	0	0	0
Director	Wen-sen Huang	6,277	160,000	0	0
Director	Hong-kai Luo	0	0	0	0
Director	Jia-zhi Hsu	625	0	0	0
Director	Jun-yu Chen	1,088	0	0	0
Director	Li-hua Zhang	20	0	0	0
Director	Li-li Huang	(4,636)	0	(9,000)	0
CFO	Chi-Chou Chang	4,122	164,000	5,000	0
Director	Jun-qiang Wang	22,948	0	0	0
Ass. Director	Cheng-ling Li	0	0	0	0
Ass. Director	Xiu-sui Lin	569	0	0	0
Ass. Director	Zhi-xiang Zhang	0	0	0	0
Ass. Director	Jie-liang Chen	3	0	0	0
Ass. Director	Yun-ru Huang	0	0	0	0
Ass. Director	Jin-ze Zheng	0	0	0	0
Ass. Director	Hao-min Hsu	1	0	0	0

• 38 -

		2015	2015	ByApril 19 of currentyear	ByApril 19 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
Ass. Director	Bing-chen Song	31	0	0	0
Ass. Director	Xin-chun Wu	16	0	0	0
Ass. Director	Kong-de Yang	0	0	0	0
Ass. Director	Min-zheng Lin	11	0	0	0
Ass. Director	Lian-jing Huang	908	0	0	0

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

2List 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
Wei-Chun Wang	settlement	Feb 29 ~ Mar. 28, 2016	Stock Market	N/A	500,000	N/A

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

2Fill in “acquisition” or “settlement”.

3.8.3. Share Mortgage Information

Name1	Reasons for Pledge2	Change Date	Transaction Counterparty	Relationship between the transaction counterparty and the Company, directors, supervisors, and shareholders holding over 10% of shares	Shares	Shares Held (%)	Pledge Rate (%)	Pledge (redemption) amount (NT$1,000)
Chi-Chou Chang	pledge	Oct. 23, 2015	CTBC Bank	No	164,000	0.10%	75%	N/A
Wen-sen Huang	pledge	Oct. 28, 2015	CTBC Bank	No	160,000	0.10%	72%	N/A

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

2Fill in pledge 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 own party	Shares held by own party	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	10,325,341	4.74%	0	0.00%	0	0.00%	N/A	N/A
Joseph Wang	4,774,905	2.19%	2,069,184	0.95%	0	0.00%	Representative	Father and

• 39 -

Name1	Shares held by own party	Shares held by own party	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
							of Tai-Yi Investment: Wei-Chun Wang. Trust account of Joseph Wang at Taishin Bank	son Asset trust account
Tai-Yi Investment Co., Ltd.	4,010,309	1.84%	1,125,409 (represented by Wei-Chun Wang)	0.52%	607,505 (Shares held by Wang’s wife and children)	0.28%	Joseph Wang	Father and son
China Life Insurance Co.,Ltd.	3,862,459	1.77%	0	0.00%	0	0.00%	N/A	N/A
Argosy Research	3,695,596	1.70%	302,322 (represented by Chao-liang Wang)	0.14	0	0.00%	N/A	N/A
Trust account of Joseph Wangat Taishin Bank	3,000,000	1.38%	0	0.00%	0	0.00%	Joseph Wang	Asset trust account
trust account of UBS at HSBC Bank (Taiwan) Co.,Ltd.	2,935,710	1.35%	0	0.00%	0	0.00%	N/A	N/A
fiduciary account of European Credit Suisse Securities –Renaissance Long-term sales of Standard Chartered Bank	2,634,105	1.21%	0	0.00%	0	0.00%	N/A	N/A
fiduciary account of the UBS (Lux) Equity SICAV– Emerging Markets Equity investment accounts of Standard Chartered Bank	2,614,077	1.20%	0	0.00%	0	0.00%	N/A	N/A
Fubon Property & CasualtyInsurance	2,549,141	1.17%	0	0.00%	0	0.00%	N/A	N/A

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

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

3The 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/December 31, 2015)

• 40 -

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	14,000,000	20.00	-	-	14,000,000	20.00
Super Elite Ltd.	-	64.48	-	-	-	64.48
Samoa Smart& Diligent Co.,Ltd	-	51.51	-	-	-	51.51
ArgosyResearch	2,945,034	3.59	14,624,200	17.81	17,569,234	21.40
Korea SINBON Electronics Co.,Ltd.	-	37.50	-	-	-	37.50
SINBON Tongan 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
RayService AVA Co.,Ltd.	2,700,000	90.00	-	-	2,700,000	90.00
SINBON Europe GmbH	-	100.00	-	-	-	100.00

1Investments by the equity method.

2Investments in Guanze.

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

• 41 -

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.
Sep1995	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
Aug2003	10	190,000	1,900,000	101,700	1,016,997	Conversion with convertible bonds at 13,638.	None	6
Sep2003	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
Aug2004	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

• 42 -

Month/Year	Issue Price	Authorized Shares/Capital	Authorized Shares/Capital	Capital Stock	Capital Stock	Remarks	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
May2012	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
May2015	10	450,000	4,500,000	207,956	2,079,563	Conversion with convertible bonds at 2,854.	None	18
Aug2015	10	450,000	4,500,000	211,109	2,111,090	Conversion with convertible bonds at 31,528	None	18
Sep2015	10	450,000	4,500,000	215,262	2,152,625	Capital surplus transferred to capital at 41,534	None	19
Nov 2015	10	450,000	4,500,000	215,830	2,158,298	Conversion with convertible bonds at 5,674	None	18
Mar 2016	10	450,000	4,500,000	217,645	2,176,454	Conversion with convertible bonds at 18,155	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.

• NB 19: Approved by Letter Jin-Guan-Cheng-Zi 104002851 issued by the Financial Supervisory Commission, Executive Yuan, on 28 July 2015.

• 43 -

Unit: Shares

				Unit: Shares
Share Type	Authorized Shares/Capital			Remarks
	Externally circulated shares1,2	Unissued Shares	Total
Common Share	Listed shares 217,951,169	232,048,831	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.

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

2Registration change has been applied for a total of 217,645,353 shares circulating on the market and a total of 305,816 shares remain unchanged.

4.1.2. Shareholder structure

(by Apri l19, 2016)

4.1.2. Shareholder structure			(byApri l19,2016
Shareholder Structure	Count	Shares Held	Percentage
Government Agencies	2	1,807,416	0.83 %
Financial Institutions	69	34,479,136	15.82 %
Other Corporations	59	15,374,341	7.05 %
Foreign Institutions and Individuals	200	60,523,498	27.77 %
Individuals	33,443	105,766,778	48.53 %
Subtotal	33,773	217,951,169	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

(by April 19, 2016)

Shares Held Grading	Number of Shareholders	Shares Held	Percentage
1-999	20,125	1,106,461	0.51%
1,000-5,000	10,086	18,917,357	8.68%
5,001-10,000	1,572	11,027,178	5.06%
10,001-15,000	715	8,299,914	3.81%
15,001-20,000	237	4,148,981	1.90%
20,001-30,000	340	8,106,310	3.72%
30,001-40,000	160	5,432,997	2.49%
40,001-50,000	97	4,323,008	1.98%
50,001-100,000	189	13,166,829	6.04%
100,001-200,000	90	12,841,740	5.89%
200,001-400,000	68	19,146,468	8.78%
400,001-600,000	34	16,243,307	7.45%
600,001-800,000	17	11,945,337	5.48%
800,001-1,000,000	10	8,960,422	4.11%
1,000,001-999,999,999	33	74,284,860	34.08%

• 44 -

Shares Held Grading	Number of Shareholders	Shares Held	Percentage
Total	33,773	217,951,169	100.00%

4.1.4. List of major shareholders

.1.4. List of major shareholders
Shares Major Shareholder	Shares Held	Percentage
Fubon Life Insurance	10,325,341	4.74%
Joseph Wang	4,774,905	2.19%
Tai-Yi Investment Co.,Ltd.	4,010,309	1.84%
China Life Insurance Co.,Ltd.	3,862,459	1.77%
ArgosyResearch	3,695,596	1.70%
Trust account of Joseph Wangat Taishin Bank	3,000,000	1.38%
trust account of UBS at HSBC Bank(Taiwan)Co.,Ltd.	2,935,710	1.35%
fiduciary account of European Credit Suisse Securities –Renaissance Long-term sales of Standard Chartered Bank	2,634,105	1.21%
fiduciary account of the UBS (Lux) Equity SICAV– Emerging Markets Equity investment accounts of Standard Chartered Bank	2,614,077	1.20%
Fubon Property& CasualtyInsurance	2,549,141	1.17%

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	2014	2015	By 30 April 20168
Market price per share1	Highest			50.50	67.50	68.90
	Lowest			34.7	43.65	54.50
	Average			43.14	53.82	63.37
Net value per share2	Before distribution			24.17	25.87	26.84
	After distribution			20.95	Undistributed	Undistributed
EPS	Weighted average			207,670,000 shares	214,224,000 shares	217,810,000 shares
	EPS3		Adjusted	3.82	4.53	1.41
			Unadjusted	3.79	Undistributed	Undistributed
Dividends per share	Cash dividends			2.80	3.10	Undistributed
	Dividends for capital surplus			-	-	Undistributed
	Stock Grants	Stock dividends from retained earnings		-	-	Undistributed
		Stock dividends from capital surplus		0.20	0.30	Undistributed
	Accumulative undistributed dividends4			-	-	Undistributed
ROI	Price/Earnings Ratio5			11.29	11.88	44.94
	Price/Dividends Ratio6			15.41	17.36	Undistributed
	Cash Dividends Yield7			6.49%	5.76%	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.

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

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

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

4Where “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

• 45 -

year.

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

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

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

8Disclose 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

• (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 2015 is as follows:

follows:
Dividends Type	Amount per Share	Source	Status
Cash dividends	2.80	Undistributed earnings	Distributed on Oct. 22, 2015
Stock dividends	0.20	Capital Surplus
Total	3.00

• 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 “0.30” per share that’s only 3% of expending capitals, and the effect on business operation is very slight.

• (2) Effect on EPS

The amount of stock grants planned at the current shareholders’ meeting is “0.30”, and this will have 3% dilution 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%

• 46 -

• 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	Stock Dividends	Stock Dividends	Stock Dividends	Cash Dividends	Cash Dividends	Remunerations for directors and supervisors (NT$)	Estimated EPS after planning employee profit sharing and remunerations for directors and supervisors (NT$)
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 the sum of net profit after tax and total amount of employee profit sharing in individual financial statements
-	0.30	-	-	-	3.10	20,000,000	13,000,000	4.53

(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
-	0.20	-	-	-	2.80	16,000,000	11,500,000

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

4.1.9. Repurchase of corporate shares

4.1.9. Repurchase of corporate shares	4.1.9. Repurchase of corporate shares
April 30,2016
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

• 47 -

Corporate Bond Type2	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%
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$35,600,000
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 0.4% at the latest conversion price at NT$41.20.
Name of depositoryorganization of exchanged stocks		N/A

1Corporate 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.

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

3List out corporate bonds issued overseas.

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

5Highlight corporate bonds issued through private placement.

6Disclose 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:

• 48 -

Bond Type1		Fifth-time Domestic Unsecured Convertible Corporate Bonds	Fifth-time Domestic Unsecured Convertible Corporate Bonds
Item	Year	2015	By April 30, 20164
Market price of bonds2 (NT$)	Highest	153.00	158.00
	Lowest	103.60	135.15
	Average	122.94	145.60
Conversionprice(NT$)		41.20	41.20
Issue date		23 June 2014	23 June 2014
Price at issue(NT$)		46.90	46.90
Conversion obligation3		New issued share	New issued share

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

2List all overseas transaction places, if any.

3Delivered issued shares or new issued shares.

4Disclose 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

• 49 -

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

• 50 -

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

• 51 -

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 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. 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.

==> picture [393 x 245] intentionally omitted <==

Source: Bishop & Associates (2015)

• 52 -

Bishop & Associates study put the size of the global connector market at 52.05 billion USD in 2015, decline 1.52% from 2014. The top 3 regional markets for connectors were China, Europe and North America with 28%, 22% and 20% respectively of the global market in 2015. Together they accounted for nearly 70% of the overall market.

==> picture [297 x 230] intentionally omitted <==

Source: Bishop & Associates (2015)

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

• 53 -

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 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, JAE, JST, Hirose and Sumitomo Wiring System are in the 6th to 10th place and together account for around 15% of the overall market.

==> picture [366 x 267] intentionally omitted <==

Source: Bishop & Associates (2015)

• 54 -

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 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

• 55 -

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 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

• 56 -

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.

• 57 -

Figure 15. Connector industry supply chain

==> picture [394 x 536] intentionally omitted <==

----- 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
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 -----

Source: IEK. Compiled by Sinbon

• 58 -

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:

A. Global Medical Devices Market

According to the department of Economic and Social Affairs of the United Nation report, the global share of older people (aged 60 years or over) increased from 11.7% in 2013 and will continue to grow as a proportion of the world population, reaching 21.1% by 2050. Along with rapid aging population, healthcare becomes increasingly important. Well developed countries focus on intelligent medical system, and developing countries are constantly performing healthcare reform.

The global medical devices market in 2014 was 340.3 billion USD and is expected to reach USD 465.3 billion by 2017 and grow with a CAGR of 6.0% during 2014 - 2017.

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10) (11) (12) (13)

The global medical equipment market is dominant by five major countries, which are the US, Japan, Germany, China and France. China market keeps growing rapidly, it is expected to surpass Germany to be the third-largest market in 2018, and become the second-largest market in 2020.

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International Corporations consolidate product line by mergers and acquisitions, many companies have invested in wearable devices and service application, hence, internet of thing will be the trend of medical industry in future.

B. Domestic Medical Devices Market

Domestic medical devices gradually spread to emerging markets, especially glucometer, blood pressure monitor, and massage products are being normal into daily life. Global domestic medical devices market grew from USD 17.9 billion in 2010 to USD 22.9 billion in 2014, and is expected to grow with a CAGR of 6.54% during 2013-2018.

C. Mobile Medical Devices Market

Monitoring by integrating mobile and gateway as to help prevent emergencies and unexpected health problems, it also help increase patient mobility. With the needs from emerging market and promotion of wearable devices, global mobile medical devices market is expected to reach USD 18.8 billion.

(2) Automotive & Aviation:

A. Automotive industry

According to the research of Frost and Sullivan, global car sales will be having an average growth of 3% annually during 2013-2018. China will be the largest market which is going to have about 27 million car sales in 2018; and the next two largest markets will be Europe and North America, which have 22 million and 20 million car sales respectively.

Electric Vehicle

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There were about 300 thousand electric cars and 1.5 million hybrid cars that had been sold in 2014 globally. Based on the research of Frost and Sullivan, it is expected that there will be around 2.3 million electric cars sold, sharing 9% of global car sales in 2020. North America will be the largest electric car market, followed by Europe and China.

Automotive Electronics

Head Up Display (HUD) is the fastest growing system of automotive electronics and it is expected to grow with a CAGR of 25.6% during 2014-2020. And the following rapidly growing system is the Start-Stop System, which is estimated to grow at a CAGR of 24.2%. The car communication system is expected to grow with a CAGR of 9.9% in the next few years. Although it has the largest proportion in automotive electronics market at the moment, its potential growth is limited.

B. Aviation industry

The aviation industry is composed of civil aviation and military aviation，covering the airplane manufacturing and repair, as well as passenger & cargo transportation services. It has the highest requirements for the quality management system and is the most complicated high-tech industry currently, with characteristic of high

• 61 -

value-added. It is also one of the industries proactively developed by the global major countries.

At present, Boeing of America and Airbus of Europe still take up majority in the global market of civil airplane manufacturing. Other major civil airplane manufacturers include Bombardier of Canada and Embraer of Brazil.

According to the aviation market estimation report proposed by Boeing in 2015, the annual economic growth rate will be about 3.1% during 2015~2034 globally, and the annual growth rate of passenger load and cargo load will be much higher. The global airlines will have the demands for about 38,050 airplanes (passenger planes and cargo planes), with the total output reaching USD5.6 trillion. Thereinto, single aisle and narrow-body airplanes such as Airbus A320 and Boeing B737 achieve high sales success for the two airplane manufacturers owing to the high energy utilization efficiency, which are used most by the global airlines. It is estimated to take up more than 1/3 of the overall market demands.

==> picture [369 x 196] intentionally omitted <==

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

Estimation of Demands for Global Airplane Types
(2015~2034)
30,000
26,730
25,000
20,000
15,000
10,000
4,770
5,000 3,520 2,490
540
0
Large widebody Medium Small widebody Single aisle Regional jets
Unit: Airplane
widebody
----- End of picture text -----

Source：Boeing Current Market Outlook

Besides Europe and North America that have mature and stable demands, Boeing also estimates that Mainland China with strong economic growth will have the highest demands for passenger load of airplanes. Therefore, Asia- Pacific will be the highest demands for

• 62 -

airplanes in the next two decades, followed by North America and Europe.

Estimation of Regional Demands for Global Airplane Type (2015~1034)

==> picture [289 x 152] intentionally omitted <==

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

1,150
1,170
3,020
Asia Pacific
3,180 14,330 North America
Europe
Middle East
7,310 Latin America
Africa
7,890 CIS
Unit: Airplane
----- End of picture text -----

Source：Boeing Current Market Outlook

(3) Green Energy:

In 2015 December, the COP21 UN Climate Change Summit in Paris: world leaders signed an accord that seeks to limit global temperature rise to below 1.5 degrees. With the support from different countries, more investments will be made on renewable energy.

A. Solar Energy

Research institute HIS said China will be the largest end-market and the key driver of global demand in 2015. 2015 global solar PV demand is reaching 59 GW, increased by 33% compared to 2014 figures, while it is forecasted to reach only 65 GW in 2016. Lower demand may be caused by, firstly, the early expiration of the solar investment tax credit (ITC) in the United States, and secondly, a likely increase in long-term Chinese government budgets due to China’s rapid economic growth.

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B. Global Onshore Wind Energy

It is expected that there will be 51,667MW onshore wind energy installed, increasing by 10.5% compared to 2014 figures. As China is going to adjust the feed-in-tariff on onshore wind energy, the installation capacity in 2016 is expected to decline from 21GW to 18GW. The global installation of onshore wind energy is at a flat growth rate, with a CAGR of -0.34% during 2015-2019.

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

(13)

(14)

C. Global Offshore Wind Energy

2015 global offshore installation capacity will reach 3,290MW, increasing by 88.1% compared to 2014 figures. 2019 could reach 6,795MW, and grow with a CAGR of 19.9% during 2015-2019. The United Kingdom is the world's leading generator of offshore wind power, followed by Germany, Denmark, Netherland, Belgium. The high price of feed-in-tariff, attract many investments, accelerate cost

• 64 -

reduction. 2014-2019, the levelized cost of electricity decreased by 3.3% annually.

==> picture [347 x 160] intentionally omitted <==

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

D.
E.
F.
G.
H.
I.
J.
K.
----- End of picture text -----

(4) Industrial Application:

A. Smart Grid

According to the latest report by GTM Research, the global smart grid market is expected to cumulatively surpass $400 billion worldwide by 2020, with a CAGR of 8.4%. China will be the largest smart grid market in the world, accounting for over 24% of the global market.

However, as smart grid implementations and applications begin to develop further in various geographies, the once-linear depiction of a smart grid roadmap is becoming increasingly multidimensional. There are, of course, common architectural, hardware and process components that will be deployed regionally; however, the deployment and maturity of applications will evolve differently depending on local drivers, requirements and technological appetites.

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

(5)
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----- Start of picture text -----

(6)
(7)
(8)
(9)
(10)
(11)
----- End of picture text -----

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B. Smart Robot

The smart robots market is estimated to grow at a CAGR of 19.22% to reach USD 7.85 Billion by 2020. The North American region comprised the largest region in terms of market size for the market accounting USD 1.17 Billion market size in 2014. The service robot is expected to hold the largest market size of USD 2.84 billion in 2014 growing at the CAGR of 16.45% from 2015-2020. The key players of smart robots includes iRobot Corporation (U.S.), DeLaval (Sweden), Lely (The Netherlands), KUKA AG (Germany), Amazon (U.S.) Honda (Japan), Kongsberg Maritime (Norway), Google Inc. (U.S.) among others.

C. Data Capture

The global automation data capture market will grow from USD 4.6 billion in 2014 to USD 5.4 billion in 2017; the global industrial automation market will grow from USD 3.5 billion in 2014 to USD 4.2 billion in 2017, with the CAGR of 5.1% and 5.8% respectively.

The global automated data capture market is still controlled by large firms such as Zebra, Honeywell, Datalogic, and Denso; the global industrial automation market is controlled by larger firms such as SICK, Keyence, Cognex, Datalogic.

D. Semiconductor Equipment

SEMI projected that worldwide sales of new semiconductor manufacturing equipment will decrease 0.6% to $37.3 billion in

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• In 2016, nominal positive growth is expected, resulting in a global market increase of 1.4%.

For 2015, Taiwan, South Korea, North America, remain the largest spending regions, with investments in Japan approaching North American levels. SEMI forecasts that in 2016, equipment sales in Europe will climb to $3.4 billion (63.1 percent increase over 2015). After a 13 percent contraction for Europe in 2015, GLOBALFOUNDRIES, Infineon, Intel, and STMicroelectronics are all expected to significantly accelerate fab equipment spending in 2016, resulting in strong growth in the region in 2016. The equipment markets in Japan, Korea, and Taiwan are expected to contract in 2016.

(5) Communication:

A. Smart Home

Smart home integration internet of things, with web services and cloud computing.

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Core terminal is a much in smart home, however, most companies are focusing on the development of smart TV and personal mobile device, and smart phones have drawn the most attention.

B. Smart wearable devices

As smart wearable device grow rapidly, more and more wearable devices will show up among consumers’ choices, and wearable devices will play an important role in smart home.

Smart wearable devices still own a high growth rate, it is expected that the shipment will increase by 24 million in 2016.

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C. Smartphone

The worldwide smartphone market is slowing down; on the other hand, functional mobile market keeps shrinking and smartphone market is getting saturated, it is expected that the shipment of smartphone will reach 1.4 billion, with a CAGR of 7.6%. Chinese companies use low pricing strategy, followed by other counterparts, which leads to limited growth in high-end smartphone. It is forecasted that smartphone with a price below USD 300 will dominate the market in 2016.

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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, wiring and opto-electronic 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:

Before 2015, 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 2015 we invested a total of NT$384,192 thousand on research and development, with 9.22% more than last year, to actively develop electronic parts and components for the Internet of Thing (IoT), robots, and smart home. At the 4th board meeting of 2015, we even passed a joint venture in Ray Service AVA Co., Ltd with Czech Ray Service a. s. company for creating aerospace products. 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.

5.1.4. Long and short-term business development plan:

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• Short-term business development plan:

• (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 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

• 71 -

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.

  - 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.

1. Long-term business development plan:

2. (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.

3. (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.

4. (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:

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Unit: 1000 NTD

				Unit: 1000 NTD	Unit: 1000 NTD
Sales Region		FY 2015		FY 2014
		Amount	%	Amount	%
Domestic Sales		791,616	6.53	711,689	6.11
Export Sales	U.S.	1,461,815	12.07	1,216,713	10.45
	Europe	52,2874	4.32	530,825	4.56
	China	7,777,857	64.22	7,152,919	61.44
	Other	1,557,096	12.86	2,030,573	17.44
Total		12,111,258	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.

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Key Products Fiber communica tionsparts Other	Key applications or functions	Production process
	Fiber optic connectors, LED, LCM, and high-frequency co-axial cable.
	Parts of automotive, medical health and industrial products.	1. SMT 2. Assembly 3. Inspection 4. Packaging

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: 1,000 NTD

		FY 2014	FY 2014	FY 2014		FY 2015	FY 2015	FY 2015		FY 2016Q1	FY 2016Q1	FY 2016Q1
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	467,900	4.02	None	Beijing Etechwin Electric	529,673	4.37	None	Beijing Etechwin Electric	334,486	10.07	None
2	HONDA TSUSHIN KOGYO	461,457	3.96	None	HONDA TSUSHIN KOGYO	508,905	4.20	None	Flextronics Electronics Technology	157,038	4.73	Non e
3	Other	10,713,362	92.02	-	Other	11,072,680	91.43	-	Other	2,831,130	85.20	-
	Net Sales	11,642,719	100.00	-	Net Sales	12,111,258	100.00	-	Net Sales	3,322,654	100.00	-

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

• 74 -

2. Suppliers:

Unit: 1,000 NTD

		FY 2014	FY 2014			FY 2015	FY 2015			FY 2016Q1	FY 2016Q1
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)	1,195,296	15.62	None	Hirose (Taiwan)	999,591	11.79	None	Hirose Electric (Shanghai)	252,248	13.16	None
2	Hirose Electric (Shanghai)	768,891	10.04	None	Hirose Electric (Shanghai)	915,517	10.80	None	Hirose (HONG KONG)	175,426	9.15	None
3	Other	5,689,526	74.34	-	Other	6,561,082	77.41	-	Other	1,489,127	77.69	-
	Net Purchases	7,653,713	100.00	-	Net Purchases	8,476,190	100.00	-	Net Purchases	1,916,801	100.00	-

Reason for Change: Amount of purchases increased from HRS SH in 2015 due to increase in sales.

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

Unit: 1000 pcs, 1000 NTD

Year By major product (or by department) Production Quality		2014	2014		2015	2015
	Production Capacity	Production Output	Production Value	Production Capacity	Production Output	Production Value
Cable Assembly	-	258,461	8,775,326	-	221,349	6,860,589
Connector	-	56,167	356,687	-	81,184	526,277
Other	-	-	-	-	7,344	525,145
Total	-	314,628	9,132,013	-	309,877	7,912,011

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.

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:

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Unit: 1,000 pcs, 1,000 units; 1,000 NTD

					Unit: 1,000pcs,1,000 units;1,000 NTD	Unit: 1,000pcs,1,000 units;1,000 NTD	Unit: 1,000pcs,1,000 units;1,000 NTD	Unit: 1,000pcs,1,000 units;1,000 NTD
Year By major product (or by department) Production Quality	FY 2015				FY 2014
	Domestic Sales		Export Sales		Domestic Sales		Export Sales
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
Cable	41,939	487,285	599,329	6,963,561	29,393	378,405	451,673	5,811,567
Connector	25,646	297,979	366,494	4,258,276	23,413	301,400	359,786	4,629,291
Other	586	6,812	8,378	97,345	2,479	31,884	38,094	490,172
Total	68,171	792,076	974,201	11,319,182	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, 2016

				March 31,2016
	Year	2014	2015	As of March 31,2016
No. of Employees	Direct employee	2,711	2,625	2,661
	Indirect employee	1,664	1,739	1,733
	Total	4,375	4,364	4,394
Average Age		27.7	29.2	29.6
Average Seniority		2.7	3.0	3.0
Distribution of Academic Background	Post-Graduate	0.0%	0.0%	0.0%
	Graduate	1.2%	1.6%	1.7%
	College/University	22.7%	23.9%	23.6%
	High School	38.6%	38.3%	28.9%
	Below High School	37.5%	36.2%	45.8%
	Total	100.00%	100.00%	100.00%

5.4. Environmental expenditure:

(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:

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

• 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.

• 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.

• 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.

3. Employee housing:

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.

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4. 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.

9. 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.

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

The company offers 61 days off for maternity leave where the legal

• 78 -

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 leading consumer electronics product supplier. Supplier guidelines were also signed with CompanyH.	None
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	None

• 79 -

			agreement was signed to protect Company P's R&D info and our production know-how.
Joint R&D contract	U	2015.08.17 ~	Co-developing products with company U, signed the contract to ensure that our intellectual property rights and the right to use.	None
Alliance Contract and equitytransfer	T	2015.3.13	Alliance with company T to maximum the production.	None
Supplier contract	Q	2015.3	Products supply to company Q.	None
JV Contract	Ray Service a.s.	2015.10	JV in Ray Service AVA Co., Ltd. for aviation products.	None
Agency agreement	C	2015.7.15 ~	To be an agent for selling products of companyC.	None

• 80 -

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	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, 2016 （Reviewed Only）
		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
C u r r e n t a s s e t s				6,295,025	6,768,638	7,949,062	8,530,755	8,351,142
F i x e d a s s e t s				1,598,775	1,554,838	1,539,336	1,507,537	1,453,806
Intangible assets				47,505	4,784	9,150	9,551	8,677
O t h e r a s s e t s				167,916	145,237	158,299	135,100	130,099
T o t a l a s s e t s				8,879,288	9,385,164	10,486,831	11,113,671	10,879,959
C u r r e n t liabilities	B e f o r e distribution			4,063,787	4,126,418	4,795,863	5,115,795	4,652,781
	A f t e r distribution			4,416,828	4,583,294	5,377,342	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				704,670	605,493	606,852	359,820	376,830
T o t a l liabilities	B e f o r e distribution			4,768,457	4,731,911	5,402,715	5,475,615	5,029,611
	A f t e r distribution			5,121,498	5,188,787	5,984,194	Not yet	Not yet
Equity Attributable t o t h e p a r e n t c o m p a n y				3,972,644	4,572,456	5,019,057	5,583,341	5,798,763
C api t a l s t o c k				2,065,638	2,076,709	2,076,709	2,176,454	2,179,342
Capi ta l su rpl u s				848,735	797,621	746,795	890,644	900,117
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	2,325,815	2,633,941
	A f t e r distribution			955,152	1,144,175	1,354,812	Not yet	Not yet
O t h e r Equ i t i e s				(249,922)	97,075	259,262	190,428	85,363
TreasuryStocks				-	-	-	-	-
N on- cont ro ll in g i n t e r e s t s				138,187	80,797	65,059	54,715	51,585
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	5,638,056	5,850,348
	A f t e r distribution			3,757,790	4,196,377	Not yet	Not yet	Not yet

• 81 -

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
Year Item		Five-Year Financial Summary						Financial data of ending date in current year on Mar. 31, 2016 （N o P a r e n t Company’s Reports）
		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
C u r r e n t a s s e t s				1,436,435	1,687,250	2,157,908	2,388,388	N.A.
F i x e d a s s e t s				280,904	266,597	283,533	291,858	N.A.
Intangible assets				-	-	-	-	N.A.
O t h e r a s s e t s				23,877	20,627	22,754	14,420	N.A.
T o t a l a s s e t s				6,056,686	7,041,112	7,963,782	8,785,123	N.A.
C u r r e n t liabilities	B e f o r e distribution			1,402,245	1,892,807	2,369,698	2,865,831	N.A.
	After distribution			1,755,286	2,349,683	2,951,177	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				681,797	575,849	575,027	335,951	N.A.
T o t a l liabilities	B e f o r e distribution			2,084,042	2,468,656	2,944,725	3,201,782	N.A.
	After distribution			2,437,083	2,925,532	3,526,204	Not yet	N.A.
Equity Attributable t o t h e p a r e n t c o m p a n y				3,972,644	4,572,456	5,019,057	5,583,341	N.A.
C a p i t a l s t o c k				2,065,638	2,076,709	2,076,709	2,176,454	N.A.
Ca p i ta l su r p l u s				848,735	797,621	746,795	890,644	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	2,325,815	N.A.
	After distribution			955,152	1,144,175	1,354,812	Not yet	N.A.
O t h e r E q u i t i e s				(249,922)	97,075	259,262	190,428	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	5,583,341	N.A.
	After distribution			3,619,603	4,115,580	4,437,578	Not yet	N.A.

• 82 -

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	Financial data of ending date in current year on Mar. 31, 2016 （Reviewed Only）
	2011	2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
Operating revenue		10,011,618	10,555,261	11,642,719	12,111,258	3,322,654
G r o s s p r o f i t		2,152,815	2,268,093	2,530,400	2,722,157	892,989
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	1,066,789	415,055
Non-operating income a n d e x p e n s e s		35,619	134,046	92,932	303,220	4,617
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	1,370,009	419,672
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		479,051	608,426	774,947	954,103	305,934
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		-	-	-	-	-
Net income(loss)		479,051	608,426	774,947	954,103	305,934
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 )		(101,421)	319,823	163,618	(65,277)	(106,003)
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	888,826	199,931
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	970,195	308,126
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)	(16,092)	(2,192)
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	902,169	203,061

• 83 -

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, 2016 （Reviewed Only）
	2011	2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （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)	(13,343)	(3,130).
Earningsper share		2.93	3.20	3.82	4.53	1.41

Condensed Statement of Comprehensive Income (IFRS and Parent)

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	Financial data of ending date in current year on Mar. 31, 2016 （N o P a r e n t Company’s Reports）
		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
Operating revenue				2,405,583	3,041,504	3,946,131	4,363,053	N.A.
G r o s s p r o f i t				536,678	687,572	814,569	929,588	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	277,470	N.A.
Non-operating income a n d e x p e n s e s				553,209	625,448	667,406	867,947	N.A.
N e t i n c o m e b e f o r e t a x				634,933	793,549	940,155	1,145,417	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				548,495	663,263	793,752	970,195	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				-	-	-	-	N.A.
Net income(loss)				548,495	663,263	793,752	970,195	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 )				(80,113)	329,633	160,551	(68,026)	N.A.

• 84 -

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	Financial data of ending date in current year on Mar. 31, 2016 （N o P a r e n t Company’s Reports）
		2011		2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （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	902,169	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				-	-	-	-	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				-	-	-	-	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				-	-	-	-	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.
Earningsper share				2.93	3.20	3.82	4.53	N.A.

6.1.2. Auditors’ Opinions from 2010 to 2014:

Year	CPA Firm	CPA's Name	Auditing Opinion
2011	Ernst & Young	Yan, Wen-Pi Tu, Qing-Yuan	Modified Unqualified
2012	Ernst & Young	Yan, Wen-Pi Tu, Qing-Yuan	Modified Unqualified
2013	Ernst & Young	Yan, Wen-Pi Tu, Qing-Yuan	Modified Unqualified
2014	Ernst & Young	Yan, Wen-Pi Lin,Hong-Kuang	Modified Unqualified
2015	Ernst & Young	Yan, Wen-Pi Lin,Hong-Kuang	Modified Unqualified

• 85 -

6.2. Financial Analysis of the Last Five Years:

6.2.1. Financial Analysis:

	Year Item	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 data of ending date in current year on Mar. 31, 2016 （Reviewed Only）
			2011	2012 （Audited）		2013 （Audited）	2014 （Audited）	2015 （Audited）
Financial structure (%)	Ratio of liabilities to assets			53.70		50.42	51.52	49.27	46.23
	Ratio of long-term capital to fixed assets			290.99		321.56	349.93	374.29	403.30
Solvency (%)	Current ratio			154.91		164.03	165.75	166.75	179.49
	Quick ratio			115.25		123.72	121.24	122.32	136.68
	Times interest earned ratio			12.90		24.39	26.71	36.81	70.69
Operating ability	Accounts receivable turnover(turns)			3.71		3.59	3.76	3.93	4.14
	Average collection period			98		102	97	92	88
	Inventory turnover (turns)				4.66	4.96	4.93	4.39	4.65
	Accounts payable turnover(turns)				5.03	4.77	4.78	4.62	5.06
	Average days in sales				78	74	74	83	79
	Fixed assets turnover (turns)				5.95	6.69	7.53	7.95	8.98
	Total assets turnover (turns)				1.13	1.12	1.17	1.12	1.21
Profitabili- ty	Return on total assets (%)				6.08	7.00	8.14	9.13	2.83
	Return on stockholders' equity (%)					13.88	15.92	17.80	5.33
	Pre-tax income to issued capital(%)			36.25		41.75	50.25	62.95	19.26
	Profit ratio (%)			4.78		5.76	6.66	7.88	9.21
	Earnings per share ($)			2.93		3.20	3.82	4.53	1.41
Cash flow	Cash flow ratio (%)			14.52		21.31	12.84	28.40	(1.91)
	Cash flow adequacy ratio (%)			64.73		68.03	95.85	118.46	116.74
	Cash reinvestment ratio (%)			5.06		7.36	1.40	12.12	(1.19)
Leverage	Operating leverage			3.17		3.13	2.69	2.53	1.99

• 86 -

	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, 2016 （Reviewed Only）
		2011	2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
	Financial leverage		1.10	1.05	1.04	1.04	1.01

	Year Item	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, 2016 （No Parent Company’s Reports）
			2011	2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
Financial structure (%)	Ratio of liabilities to assets			34.41	35.06	36.98	36.45	N.A.
	Ratio of long-term capital to fixed assets			1,605.44	1,841.15	1,770.18	1913.03	N.A.
Solvency (%)	Current ratio			102.44	89.14	91.06	83.34	N.A.
	Quick ratio			81.39	73.41	75.60	71.74	N.A.
	Times interest earned ratio			25.88	49.97	45.73	74.89	N.A.
Operating ability	Accounts receivable turnover(turns)			3.68	3.44	3.72	3.84	N.A.
	Average collection period			99	106	98	95	N.A.
	Inventory turnover (turns)			7.15	8.03	9.48	9.83	N.A.
	Accounts payable turnover(turns)			4.62	3.95	3.82	3.81	N.A.
	Average days in sales			51	45	39	37	N.A.
	Fixed assets turnover (turns)			8.69	11.11	14.35	15.17	N.A.
	Total assets turnover (turns)			0.42	0.46	0.53	0.52	N.A.
Profitabili- ty	Return on total assets (%)			11.38	12.36	10.81	11.74	N.A.
	Return on stockholders' equity (%)			15.18	15.52	16.55	18.30	N.A.
	Pre-tax income to issued capital (%)			30.74	38.21	45.27	52.63	N.A.
	Profit ratio (%)			22.80	21.81	20.11	22.24	N.A.
	Earnings per share ($)			2.93	3.20	3.82	4.53	N.A.

• 87 -

	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, 2016 （No Parent Company’s Reports）
		2011	2012 （Audited）	2013 （Audited）	2014 （Audited）	2015 （Audited）
Cash flow	Cash flow ratio (%)		(8.93)	18.50	6.90	15.52	N.A.
	Cash flow adequacy ratio (%)		66.06	48.55	35.17	43.11	N.A.
	Cash reinvestment ratio (%)		(9.01)	(1.23)	(6.17)	(2.24)	N.A.
	Operating leverage		5.59	3.65	2.85	2.86	N.A.
Leverage	Financial leverage		1.55	1.13	1.08	1.06	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 2015 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 2015 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

Kuo-Shian Investment Co., Ltd.

Representative: Wang, Kuo-Hong

April 22, 2016

• 88 -

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, 2015, and December 31, 2014, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and cash flows for the years ended December 31, 2015 and 2014. 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$1,838,832 thousand and NT$1,599,071 thousand, which represented 17%, and 15% of the total consolidated assets of the Company as of December 31, 2015 and 2014, respectively; total revenues amounted to NT$2,720,914 thousand and NT$2,726,302 thousand, which represented 22% and 23% of the consolidated revenues of the Company for the years ended December 31, 2015 and 2014, 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$391,898 thousand and NT$401,167 thousand, both represented 4% of the total consolidated assets as of December 31, 2015 and 2014; the related shares of investment income from the associates and joint ventures amounted to NT$21,992 thousand and NT$31,660 thousand, which represented 2% and 3% of the consolidated income from continuing operations before income tax for the years ended December 31, 2015 and 2014, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$17,321 thousand and NT$8,412 thousand, which represented (27)% and 5% of the consolidated total comprehensive income (loss) for the years ended December 31, 2015 and 2014, 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.

• 89 -

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, 2015 and 2014, and the consolidated results of their operations and their cash flows for the years ended December 31, 2015 and 2014, 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, and 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, 2015 and 2014.

Ernst & Young

Taiwan Republic of China

March 11, 2016

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.

• 90 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2015 and 2014

(Expressed in Thousand New Taiwan Dollars)

Assets	Notes	As of December 31,	As of December 31,
		Amount $3,044,273 70,980 95,723 356,682 2,569,356 109,827 2,171,069 101,989 10,856 8,530,755 93,265 371,495 418,131 1,507,537 9,551 47,837 135,100 2,582,916 2015	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
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss, current Debt instrument investments for which no active market exists, 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) 12 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)

$11,113,671

$10,486,831

Total assets

• 91 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(Continued) December 31, 2015 and 2014

(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 bonds payable Current portion of long-term 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 Net defined benefit obligation, noncurrent Other liabilities-others Total non-current liabilities Total liabilities Equity attributable to the parent company Common stock C Certificates of Bond-to-Stock Conversion Subtotal Additional Paid-in Capital Retained earnings Legal reserve Special reserve Unappropriated earnings Subtotal Other components of equity Exchange differences on translation of foreign operations Unrealized gains or losses 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 $1,919,023 6,489 41,128 2,193,384 686,007 141,995 47,035 4,067 76,667 5,115,795 - - 4,504 261,011 18,902 75,401 2 359,820 5,475,615 2,158,299 18,155 2,176,454 890,644 631,397 134,446 1,559,972 2,325,815 199,450 (9,022) 190,428 54,715 5,638,056 $11,113,671 2015	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 - 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
	4,6(11) 4,6(12) 7 4,6(13) 4,6(14) 4,6(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)

• 92 -

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, 2015 and 2014

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

Operating revenues Operating costs Gross profit-net Operating expenses Sales and marketing expenses General and administrative expenses Research and development expenses Subtotal Operating income Non-operating income and expenses Other income Other gains and losses Finance costs Share of profit or loss of associates and joint ventures Subtotal Income from continuing operations before income tax Income tax expense Net income Other comprehensive income (loss) Remeasurements of defined benefit plans Income tax related to items that may not be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Unrealized gains (losses) on available-for-sale financial assets Share of other comprehensive income of associates and joint ventures Income tax related to items that may be reclassified subsequently to profit or loss Total other comprehensive income (loss), net of tax Total comprehensive income Net income attributable to: 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 Earnings per share-diluted Items that may not to be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss	Notes	For theyears ended December 31,	For theyears ended December 31,
		$12,111,258 (9,389,101) 2,722,157 (639,391) (631,785) (384,192) (1,655,368) 1,066,789 184,026 142,688 (38,259) 14,765 303,220 1,370,009 (415,906) 954,103 973 (165) (1,767) (82,181) 17,321 542 (65,277) $888,826 $970,195 (16,092) $954,103 $902,169 (13,343) $888,826 $4.53 $4.51 2015	2014
	4,6(18) 6(19),7 6(19),7 6(20) 4,6(8) 4,6(22) 6(21) 4,6(23) 4,6(23)		$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
			(1,971) 335 169,561 15,056 8,412 (27,775)
			163,618
			$938,565
			$793,752 (18,805)
			$774,947
			$954,303 (15,738)
			$938,565
			$3.82
			$3.79

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

• 93 -

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, 2015 and 2014

(Expressed in Thousands of New Taiwan Dollars)

Appropriation and distribution of 2013 retained earnings Legal reserve Special reserve Cash dividends Change in Other additional paid-in capital Stock options-equity component of convertible bonds Capital surplus- Cash dividends Net income in 2014 Other comprehensive income (loss), net of tax in 2014 Total comprehensive income (loss) Appropriation and distribution of 2014 retained earnings Legal reserve Cash dividends Change in Other additional paid-in capital Capital surplus- Cash dividends Share of changes in net assets of associates and joint ventures accounted for using equity method Net income in 2015 Other comprehensive income (loss), net of tax in 2015 Total comprehensive income (loss) Bonds converted to stock Increase in non-controlling interests Balance as of January 1, 2014 Balance as of December 31, 2014 Balance as of January 1, 2015 Balance as of December 31, 2015				EquityAttributable to theparent company	EquityAttributable to theparent company		Total $4,572,456 - - (456,876) 11,475 (62,301) 793,752 160,551 954,303 $5,019,057 $5,019,057 - (581,479) - (736) 970,195 (68,026) 902,169 244,330 - $5,583,341	Non- Controlling Interests $80,797 (18,805) 3,067 (15,738) $65,059 $65,059 (16,092) 2,749 (13,343) 2,999 $54,715	Total Equity
	Common stock $2,076,709 - $2,076,709 $2,076,709 41,534 - 40,056 $2,158,299	Certificates of Bond-to-Stock Conversion $- - $- $- - 18,155 $18,155	Additional Paid-in Capital $797,621 11,475 (62,301) - $746,795 $746,795 (41,534) (736) - 186,119 $890,644		Special Reserve Unappropriated Earnings $249,922 $865,434 (66,327) (115,476) 115,476 (456,876) 793,752 (1,636) - 792,116 $134,446 $1,249,823 $134,446 $1,249,823 (79,375) (581,479) 970,195 808 - 971,003 $134,446 $1,559,972 Retained earnings	Exchange Differences on Translation of Foreign Operations Unrealized Gains or Losses on Available- For-Sale Financial Assets $64,705 $32,370 138,719 23,468 138,719 23,468 $203,424 $55,838 $203,424 $55,838 (3,974) (64,860) (3,974) (64,860) $199,450 ($9,022) Other components of equity
				Legal Reserve $485,695 66,327 - $552,022 $552,022 79,375 - $631,397	Special Reserve $249,922 (115,476) - $134,446 $134,446 - $134,446	Exchange Differences on Translation of Foreign Operations $64,705 138,719 138,719 $203,424 $203,424 (3,974) (3,974) $199,450
									$4,653,253 - - (456,876) 11,475 (62,301) 774,947 163,618
									938,565
									$5,084,116
									$5,084,116 - (581,479) - (736) 954,103 (65,277)
									888,826
									244,330 2,999
									$5,638,056

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

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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

For the years ended December 31, 2015 and 2014

(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 Interest revenue Dividends revenue Bad debt reversal Share of profit of associates and joint ventures Loss on disposal of property, plant and equipment Loss from market value decline, obsolete and slow-moving of inventories (Gain from price recovery) Gain on disposal of investments Impairment loss on financial assets Loss of financial assets and liabilities at fair value through profit or loss Gain of financial assets and liabilities at fair value through profit or loss Changes in operating assets and liabilities: Increase in financial asset held for trading Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease in other receivables Increase in inventories, net Increase in prepayments Decrease in other current assets Increase in other noncurrent assets Increase in notes payable Increase in accounts payable Increase in other payables Increase in other current liabilities Increase in accrued pension liabilities Cash generated from operations Interest received Dividend received Interest paid Income tax paid Net cash provided by operating activities	For theyears ended December 31,	For theyears ended December 31,
	2015 $1,370,009 152,346 29,238 38,259 (26,473) (19,656) (7,611) (14,765) 3,571 48,718 (2,039) - 2,717 (37,878) (414) 42,568 127,172 9,161 (308,103) (46,230) 5,010 (20,114) 16,456 142,112 253,052 34,336 17 1,791,459 23,990 19,656 (35,346) (347,085) 1,452,674	2014
		$1,043,522 167,884 60,009 40,581 (15,051) (8,958) (2,250) (30,992) 22,663 (14,284) (13,469) 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
		837,725
		15,051 8,958 (30,721) (215,451)
		615,562

(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, 2015 and 2014

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Net Cashflow from disposal of subsidiaries (Note 6.(24)) Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in other intangible assets Decrease in investments accounted for under the equity method Acquisition of investments accounted for under the equity method Decrease in financial assets measured at cost Dividends received from investee company Acquisition of financial assets measured at cost Acquisition of debt instrument investments for which no active market exists Proceeds from disposal of financial assets measured at cost Net cash (used in) provided by investing activities Cash flows from financing activities: Increase in short-term loans Decrease in long-term loanss (including current portion) Increase in bonds payable Cash dividends Decrease in long-term deferred revenue Increase in non-controlling interests Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Non-cash investing and financing activities: Transfer of long-term loans to current portion	For theyears ended December 31,	For theyears ended December 31,
	2015 $(119,873) (211,634) 7,025 (2,833) 20,000 (15,309) 31,423 26,520 (197,774) (95,723) 1,294 (556,884) 307,709 (3,595) - (581,479) (424) 2,999 (274,790) 10,799 631,799 2,412,474 $3,044,273 $4,067	2014
		$ - (165,117) 18,295 (4,366) 20,000 - 5,893 21,083 - - 107,667
		3,455
		511,637 (516,294) 300,000 (519,177) (423) -
		(224,257)
		138,261
		533,021 1,879,453
		$2,412,474
		$-

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

• 96 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2015 and 2014 (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.

2. Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Group for the years ended December 31, 2015 and 2014 were authorized for issue by the Company’s board of directors (the Board) on March 11, 2016.

3. Newly issued or revised standards and interpretations

• (1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2015. The nature and the impact of each new standard and amendment that has a material effect on the Group is described below:

IAS 19 Employee Benefits

The revised IAS 19 brought about the following changes to defined benefit plans which are summarized 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) The interest cost and expected return on plan assets used in the previous version of IAS 19 are replaced with a net-interest amount under the revised IAS 19, which is calculated by applying the discount rate to the net defined benefit liability or asset at the start of each annual reporting period.

• (b) In the previous version of IAS 19, past service cost is recognized as an expense immediately to the extent that the benefits are already vested, or on a straight-line basis over the average period until the benefits become vested. Under the revised IAS 19, all past service costs are recognized at the earlier of when the amendment/curtailment occurs or when the related restructuring or termination costs are recognized. Therefore unvested past service cost is no longer deferred over future vesting periods.

• (c) The revised IAS 19 required more disclosure; please refer to Note 6 for more details.

IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 Disclosure of Interests in Other Entities sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structured entities. The requirements in IFRS 12 are more comprehensive than the previously existing disclosure requirements, for example, summarized financial information about the associate or disclosure on subsidiaries with material non-controlling interests. Please refer to Note 6 for more details.

IFRS 13 Fair Value Measurements

IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS. The Group re-assessed its policies for measuring fair values. Application of IFRS 13 has not materially impacted the fair value measurements of 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)

Additional disclosures where required under IFRS 13, are provided in the individual notes relating to the assets and liabilities whose fair values were determined. Fair value hierarchy is provided in Note 12. According to the transitional provisions of IFRS 13, IFRS 13 is applied prospectively as of 1 January 2015; the disclosure requirements of IFRS 13 need not be applied in comparative information before 1 January 2015.

IAS 1 Presentation of Financial Statements – Presentation of items of other comprehensive income

Beginning 1 January 2014, the Group presented its items of other comprehensive income that will be reclassified to profit or loss separately from items that will not be reclassified in accordance with the amendments to IAS 1. The amendments affect presentation of statement of comprehensive income only and have no impact on the Group’s financial position or performance.

IAS 1 Presentation of Financial Statements – Clarification of the requirement for comparative information

Beginning 1 January 2014, according to the amendments to IAS 1, when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements, the opening statement of financial position does not have to be accompanied by comparative information in the related notes. The amendments affect notes accompanying the financial statements only and have no impact on the Group’s financial position or performance.

• (2) Standards or interpretations issued by IASB but not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue are listed below.

(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.

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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) 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):

IFRS 2 “Share-based Payment”

The annual improvements amend the definitions of 'vesting condition' and 'market condition' and add 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.

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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 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.

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

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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)

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.

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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)

• (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.

• (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 promised 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. An entity recognises revenue in accordance with that core principle by applying the following steps:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognise revenue when (or as) the entity satisfies a performance

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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)

obligation

The new Standard includes a cohesive set of disclosure requirements that would result in an entity providing users of financial statements with comprehensive information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts with customers. The Standard is effective for annual periods beginning on or after 1 January 2018.

• (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 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.

• 105 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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 effective date of this amendment has been postponed indefinitely, but early adoption is allowed.

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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)

(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.

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.

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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 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) Disclosure Initiative — Amendment to IAS 1 “Presentation of Financial Statements”:

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.

(r) IFRS 16“Leases”

The new standard requires lessees to account for all leases under a single on-balance sheet model (subject to certain exemptions). Lessor accounting still uses the dual classification approach: operating lease and finance lease. The Standard is effective for annual periods beginning on or after 1 January 2019.

• (s) IAS 12“Income Taxes” — Recognition of Deferred Tax Assets for Unrealized Losses

The amendment clarifies how to account for deferred tax assets for unrealized losses. The amendment is effective for annual periods beginning on or after 1 January 2017.

(t) Disclosure Initiative — Amendment to IAS 7 “Statement of Cash Flows”:

The amendment relates to changes in liabilities arising from financing activities and to require a reconciliation of the carrying amount of liabilities at the beginning and end of the period. The amendment is effective for annual periods beginning on or after 1 January 2017.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. The Group cannot estimate the potential impact of these standards and interpretations at this point in 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)

4. Summary of significant accounting policies

• (1) Statement of Compliance

The consolidated financial statements of the Group for the years ended 31 December 2015 and 2014 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the FSC.

• (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.

• (3) Basis of consolidation

Preparation principle of consolidated financial statement

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

• (a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

• (b) exposure, or rights, to variable returns from its involvement with the investee, and

• (c) the ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• (a) the contractual arrangement with the other vote holders of the investee (b) rights arising from other contractual arrangements

• (c) the Group’s voting rights and potential voting rights

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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 Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Company 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 uniform accounting policies. All intra-group balances, income and expenses, 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 the 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.

The consolidated entities are listed 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 (%)	Percentage of ownership (%)	Note
			2015.12.31	2014.12.31
Th e Comp an y	Sinbon International Enterprise Co.,Ltd.(SB(B.V.I))	Holding company	100.00%	100.00%
Th e Comp an y	Hong Kong Sinbon Electronics Co., Ltd. (HKSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
Th e Company	Super Elite Ltd.(SEL)	Holdingcompany	64.48%	64.48%
Th e Comp an y	Beijing Sinbon Electronics Co., Ltd. (BJSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%

• 111 -

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 (%)	Percentage of ownership (%)	Note
			2015.12.31	2014.12.31
Th e Comp an y	Samoa Smart and Diligent Co., Ltd.(Samoa S&D)	Holding company	51.51%	51.51%
Th e Comp an y	Sinbon Technologies L.L.C. (USSB)	Selling a wide variety of connectors, wires and cables	51.00%	51.00%
Th e Comp an y	Japan Sinbon Electronics Co., Ltd. (JPSB)	Selling a wide variety of connectors, wires and cables	70.00%	70.00%
Th e Comp an y	Worldwide Wire Harnesses Co., Ltd.	Holding company	50.00%	50.00%
Th e Comp an y	Kwan-Ze Corporation Ltd. (Kwan-Ze)	Selling a wide variety of electronic materials and holdingcompany	100.00%	100.00%
Th e Company	Sinbon USA L.L.C.	Logistic center	100.00%	100.00%
Th e Comp an y	Beijing Sinbon Tongan Electronics Co., Ltd.(BJSB Tongan)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
Th e Comp an y	Sinbon Europe GmbH (EuropeSB)	Logistic center	100.00%	-	Note 1
Th e Comp an y	Ray Service ADA Corp.	Manufacturing and selling signal cables and cabin wiring.	90.00%	-	Note 2
B V I	Jiangyin Sinbon Electronics Co., Ltd. (JYSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
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%	Note 3
S E L	Hong Kong Comtek Electronics Co.,Ltd.(HongKongCMK)	Selling a wide variety of connectors and cables	64.48%	64.48%

• 112 -

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 (%)	Percentage of ownership (%)	Note
			2015.12.31	2014.12.31
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%	Note 3
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	92.74%	92.74%

Note 1: On September 16, 2015, the Company invested USD 500,000 in EuropeSB and obtained control

of the company. Accordingly, EuropeSB was consolidated.

• Note 2: On November 26, 2015, the Company invested $27,000 in Ray Service ADA Corp. and obtained control of the company. Accordingly, Ray Service ADA Corp. was consolidated.

• Note 3: The Company sold the equity interest in HK Sinact (including its investee company- JY Sinact) on March 13, 2015. The Company stopped recognizing its shares of profit or loss of the subsidiaries in the consolidated financial reports from the date it lost control.

(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.

• 113 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

• (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 partial disposals are accounted for as disposals:

• (a) when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and

• (b) when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign

• 114 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 joint arrangement 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

• (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.

• 115 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(7) Cash Equivalents

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

• (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.

(a) 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).

• 116 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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 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.

• 117 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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 debt instrument 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.

• 118 -

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.

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.

• 119 -

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 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.

(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.

• 120 -

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

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

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.

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.

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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)

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:

• 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.

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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)

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 fair 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 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.

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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) 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) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• (a) In the principal market for the asset or liability, or

• (b) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best 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)

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(11) Inventories

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

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

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.

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.

• (12) 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. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

Under the equity method, the investment in the associate or an investment in a joint venture 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 or joint venture. After the interest in the associate or joint venture 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 or joint venture. Unrealized gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the Group’s related interest in the associate or joint venture.

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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 changes in the net assets of an associate or a joint venture 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 or joint venture, 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 or joint venture on a pro-rata basis.

When the associate or joint venture issues new stock, and the Group’s interest in an associate or a joint venture is reduced or increased as the Group fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in Additional Paid in Capital and Investment accounted for using the equity method. When the interest in the associate or joint venture 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 reclassified to profit or loss on a pro rata basis when the Group disposes the associate or joint venture.

The financial statements of the associate or joint venture 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 or an investment in a joint venture 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 or joint venture 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 or joint venture, including the cash flows from 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.

• 126 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture 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 or joint venture, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(13) 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

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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)

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.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

(14) 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 carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

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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 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

(15)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 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.

• 129 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

(16) 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 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.

• 130 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(17) 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 the 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 passed 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 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 rate method and recognized in profit or loss.

Dividends

Revenue is recognized when the Group’s right to receive the payment is established.

(18) 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.

• 131 -

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

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

(19) 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.

(20) 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.

• 132 -

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

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

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. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

(a) the date of the plan amendment or curtailment, and

(b) the date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(21) 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.

The 10% surtax on undistributed retained earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

• 133 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Deferred 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 arrangements, 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.

• (b) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, 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.

• 134 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

(22) 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.

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.

• 135 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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.

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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)

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.

(a) 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.

(b) 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 and future salary increases. Please refer to Note 6 for more details.

(c) 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.

• 137 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

6. Contents of significant accounts

• (1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Demand deposits Time deposits Net amount	As of December 31,
	2015	2014 $11,453 2,255,878 145,143 $2,412,474
	$16,727 2,981,718 45,828
	$3,044,273

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

Held for trading: Derivatives not designated as hedging instruments Cross Currency Swap Embedded derivatives-bond Non-derivative financial assets Fund Shares Net amount	As of December 31, 2015 2014 $28,431 $14,318 77 - 28,507 31,031 13,965 - $70,980 $45,349
	2015
	$28,431 77 28,507 13,965
	$70,980

Financial assets held for trading were not pledged.

• (3) Notes receivables

Notes receivables
Notes receivables arising from operating activities Notes receivables arising from non-operating activities Less: allowance for doubtful debts Net amount	As of December 31,
	2015	2014 $399,250 - - $399,250
	$216,649 140,033 -
	$356,682

Notes receivables were not pledged.

• 138 -

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 subtotal Accounts receivable – related parties Net amount	As of December 31,
	2015	2014 $2,827,810 (12,253) 2,815,557 5,405 $2,820,962
	$2,598,714 (29,946)
	2,568,768 588
	$2,569,356

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, 2015 Write off bad debts Charge/reversal for the current period As of December 31 2015 As of January 1, 2014 Write off bad debts Charge/reversal for the current period As of December 31, 2014	Individually impaired	Collectively impaired	Total
	$ - - -	$12,253 25,304 (7,611)	$12,253 25,304 (7,611)
	$ -	$29,946	$29,946
	$ - - -	$6,150 8,353 (2,250)	$6,150 8,353 (2,250)
	$ -	$12,253	$12,253

There was no impairment loss of individually accounts receivable for the years ended December 31 2015 and 2014.

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:

Past due but not impaired

As of December 31,	Neither past due nor impaired	<=30 days	31~60 days	61~90 days	91~120 days	>=121 days	Total
2015 2014	$2,486,344 2,715,718	$57,599 59,764	$19,789 14,867	$2,711 5,259	$1,740 7,649	$1,173 17,705	$2,569,356 2,820,962

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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) Inventories

Raw materials Supplies & parts Work in progress Finished goods Merchandise Net amount	As of December 31, 2015 2014 $706,540 $697,349 660 7,282 79,513 137,210 522,751 459,172 861,605 635,299 $2,171,069 $1,936,312	As of December 31, 2015 2014 $706,540 $697,349 660 7,282 79,513 137,210 522,751 459,172 861,605 635,299 $2,171,069 $1,936,312
	2015 $706,540 660 79,513 522,751 861,605 $2,171,069
		$697,349 7,282 137,210 459,172 635,299
		$1,936,312

The inventory cost recognized as expenses for the years ended December 31, 2015 and 2014 were $9,389,101 and $9,112,319, respectively. The price reduction (recovery) of inventories related to cost of goods sold were $48,718 and $(14,284).

Gain from price recovery of inventories was due to the sale of obsolete products and the net realized value recovery for the year ended December 31, 2014.

No inventories were pledged.

(6) Available-for-sale financial assets - noncurrent

INPAQ Technology Co., Ltd. Add (less)：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,
	2015	2014 $168,381 15,056 (7,991) $175,446
	$168,381 (67,125) (7,991)
	$93,265

Available-for-sale financial assets 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)

(7) Financial assets measured at cost - noncurrent

Financial assets at fair value through profit or loss Top Taiwan VII Venture Capital Co., Ltd. Top Taiwan Venture Capital Co., Ltd. Elcotronic Holding GmbH Top Taiwan II Venture Capital Co., Ltd. Hotwire Development L.L.C Circuits & Cables L.L.C Top Taiwan III Venture Capital Co., Ltd. General Research Of Electronics Inc. Shanghai Guoshun Shimen Investment Center (limited partnership) Gongwin Biopharm Co. Ltd Niigata Seimitsu Co., Ltd. Ultracap Technologies Co., Ltd. Dynahz Technologies Co., Ltd. Bandrich, Inc. Argosy (Beijing) Technologies Co., Ltd. Actmax Technologies Inc. Sintex Material Co., Ltd Total Less: accumulated impairment - financial assets measured at cost Net amount	As of December 31,	As of December 31,
	2015	2014
	$60,750 60,000 59,933 35,000 32,653 26,453 23,577 23,184 20,368 18,685 13,460 12,667 6,150 4,125 2,500 1,441 -	$60,750 - - 40,000 - - 50,000 23,184 20,450 - 13,460 12,667 6,150 4,125 2,398 1,441 4,500
	400,946 (29,451)	239,125 (33,850)
	$371,495	$205,275

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.

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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)

(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. Sardines wisdom Technology Co., Ltd. Total	As of December 31,	As of December 31,	As of December 31,
	2015 Carrying amount Percentage of ownership (%) $231,764 20.90% 160,134 20.00% 16,200 37.50% 10,033 27.27% $418,131	2014
	Carrying amount $231,764 160,134 16,200 10,033 $418,131	Carrying amount $227,449 173,718 18,754 - $419,921	Percentage of ownership (%)
			20.90% 20.00% 37.50% -

Fair value of the investment in the associate when there is a quoted market price for the investment: Argocy Research Inc. is a listed entity on the Taiwan Stock Exchange (TWSE). The fair value of the investment in Argocy Research Inc. is $232,792 and $319,326, as at 31 December 2015 and 2014, respectively.

The Group’s investments in Argocy Research Inc., Top Taiwan IV Venture Capital Co., Ltd., Korea Sinbon Electronics Co Ltd. and Sardines wisdom Technology Co., Ltd. are not individually material. The aggregate financial information based on Group’s share of its associates is as follows:

Profit or loss from continuing operations Other comprehensive income (post-tax) Total comprehensive income	For the years ended December 31,	For the years ended December 31,
	2015 $14,765 - $14,765	2014
		$30,992 -
		$30,992

The associates had no contingent liabilities or capital commitments as of December 31, 2015 and December 31, 2014. No investment in the associate was pledged.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(9) Property, plant and equipment

Cost: As of January 1, 2015 Additions Disposals Exchange differences Other changes As of December 31, 2015 As of January 1, 2014 Additions Disposals Exchange differences Other changes As of December 31, 2014 Depreciation and impairment: As of January 1, 2015 Depreciation Impairment losses Disposals Exchange differences As of December 31, 2015 As of January 1, 2014 Depreciation Impairment losses Disposals Exchange differences Other changes As of December 31, 2014 Net carrying amount as of December 31, 2015 2014	Land $146,976 2,882 - (54) - $149,804 $114,547 32,429 - - - $146,976 $ - - - - - $ - $ - - - - - - $ - $149,804 $146,976	Buildings $1,188,627 102,519 (357) 6,013 126,167 $1,422,969 $1,121,793 36,542 - 30,785 (493) $1,188,627 $425,548 64,383 - (357) (1,804) $487,770 $357,648 46,903 - - 20,997 - $425,548 $935,199 $763,079	Machinery and equipment $952,783 53,860 (204,232) 1,646 39 $804,096 $969,685 52,661 (89,844) 18,085 2,196 $952,783 $565,735 52,896 (2,762) (100,251) (5,728) $509,890 $507,944 82,974 (5,252) (54,462) 34,531 - $565,735 $294,206 $387,048	Office equipment $91,190 17,202 (8,963) - - $99,429 $90,212 8,380 (9,874) 2,472 - $91,190 $63,564 8,651 - (7,462) 3,938 $68,691 $65,577 8,821 - (7,165) (2,340) (1,329) $63,564 $30,738 $27,626	Transportation equipment $43,055 3,571 (1,232) (396) - $44,998 $40,125 4,294 (1,471) (678) 785 $43,055 $24,197 6,550 - (1,132) 1,642 $31,257 $23,353 6,170 - (1,393) (3,933) - $24,197 $13,741 $18,858	Other equipment $160,178 20,722 (12,400) 758 2,547 $171,805 $130,349 30,613 (7,268) 6,484 - $160,178 $73,130 19,834 - (9,096) 13,144 $97,012 $69,873 17,464 - (5,465) (8,742) - $73,130 $74,793 $87,048	Leasehold improvements $128,273 301 (123,445) 265 - $5,394 $124,300 - - 3,973 - $128,273 $30,442 32 - (25,418) 54 $5,110 $24,071 5,552 - - 819 - $30,442 $284 $97,831	Construction in progress and equipment pending inspection $10,870 10,577 (45) (36) (12,594) $8,772 $12,293 198 - (1,621) - $10,870 $ - - - - - $ - $- - - - - - $ - $8,772 $10,870	Total
									$2,721,952 211,634 (350,674) 8,196 116,159
									$2,707,267
									$2,603,304 165,117 (108,457) 59,500 2,488
									$2,721,952
									$1,182,616 152,346 (2,762) (143,716) 11,246
									$1,199,730
									$1,048,466 167,884 (5,252) (68,485) 41,332 (1,329)
									$1,182,616
									$1,507,537
									$1,539,336

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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)

Property, plant and equipment was not pledged.

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 deferred charges Long-term prepaid rent Refundable deposits Prepayment for equipment Other long-term investment Other assets Total	As of December 31,	As of December 31,
	2015 $54,708 44,841 27,375 5,661 2,361 154 $135,100	2014 $68,479 46,187 22,171 18,699 2,361 402
		$158,299

Long-term prepaid rents were payments for land use rights as of December 31, 2015 and 2014.

No other non-current assets were pledged.

(11) Short-term loans

Unsecured bank Interest rates Due date	As of December 31 2015 2014 loans $1,919,023 $1,842,548 For theyears ended December 31,	As of December 31 2015 2014 loans $1,919,023 $1,842,548 For theyears ended December 31,
	2015 0.90% - 5.09% January 14, 2016-July 27, 2016	2014
		0.78% - 6.16% January 5, 2015- June 26, 2015

The Group’s unused short-term lines of credits amounted to $703,475 and $503,067 as of December 31, 2015 and 2014, respectively.

• 144 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

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

(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 Bonds payable Liability component: Principal amount Discounts on bonds payable Subtotal Less: current portion Net Embedded derivative Equity component		As of December 31,
		2015 2014 $6,489 $27,802 - 1,950 $6,489 $29,752 $6,489 $27,802 - 1,950 $6,489 $29,752 As of December 31, 2015 2014 $48,200 $300,000 (1,165) (11,560) $47,035 $288,440 (47,035) - $- $288,440 $(77) $1,950 $1,844 $11,475
		2015
		$48,200 (1,165)
		$47,035 (47,035)
		$-
		$(77)
		$1,844

(13) Bonds payable

Issuance of convertible bonds :

On June 23, 2015, 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, 2015 ~ June 23, 2017

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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)

Conversion price: NT$46.9

On August 21, 2014, the conversion price had been adjusted from NTD 46.9 to NTD 44.5 (in dollar) per share. On September 2, 2015, the conversion price had been adjusted from NTD 44.5 to NTD 41.2 (in dollar).

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.

The bonds already exchanged amount to $251,800 and $- as of December 31, 2015 and December 31, 2014, respectively.

• (14) Long-term loans

Details of long-term loans as of December 31, 2015 and 2014 are as follows:

Lenders	As of December 31,2015	Interest Rate(%)	Maturity date and terms of repayment
The Bank of Tokyo-Mitsubishi UFJ, Ltd The Bank of Tokyo-Mitsubishi UFJ, Ltd Total Less: current portion Net amount	$5,674 2,897	0.9% 0.9%	Effective August 7, 2013 to July 9, 2018. Principal is repaid in 60 quarterly payments with monthly interest payments. Effective July 25, 2014 to July 7, 2017. Principal is repaid in 36 quarterly payments with monthly interest payments.
	8,571 (4,067)
	$4,504

• 146 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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	$7,600 4,566	0.9% 0.9%	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.
	$12,166

(15) Long-term Deferred Revenue

Beginning balance Amortization Exchange effect Ending Balance Deferred revenue - related to assets	For the years ended December 31, 2015 2014 $19,402 $19,184 (424) (423) (76) 641 $18,902 $19,402 As of December 31,	For the years ended December 31, 2015 2014 $19,402 $19,184 (424) (423) (76) 641 $18,902 $19,402 As of December 31,
	2015 $18,902	2014 $19,402

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.

• 147 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Subsidiaries located in the People’s Republic of China will contribute social 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, 2015 and 2014 were $28,738 and $26,735, 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. Before the end of each year, the Company and its domestic subsidiaries assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Company and its domestic subsidiaries will make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under discretionary accounts, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19.The Group expects to contribute $3,404 to its

• 148 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

defined benefit plan during the 12 months beginning after 31 December 2015.

The average duration of the defined benefits plan obligation as at 31 December 2015 are 17 years.

Pension costs recognized in profit or loss for the years ended 31 December 2015 and 2014:

Current period service costs Interest income or expense Total	For the years ended 31 December	For the years ended 31 December
	2015	2014
	$1,905 1,516	$2,203 1,487
	$3,421	$3,690

Changes in the defined benefit obligation and fair value of plan assets are as follows:

Defined benefit obligation Plan assets at fair value Other non-current liabilities - Accrued pension liabilities recognized on the consolidated balance sheets		As of
	31 Dec. 2015	31 Dec. 2014	1 Jan. 2014
	$137,712 (62,311)	$139,637 (63,280)	$132,635 (58,267)
	$75,401	$76,357	$74,368

Reconciliation of liability (asset) of the defined benefit plan is as follows:

As of 1 Jan. 2014 Current period service costs Net interest expense (income) Past service cost and gains and losses arising		As of
	Defined benefit obligation	Fair value of plan assets	Benefit liability (asset)
	$132,635 2,203 2,652 -	$(58,267) - (1,165) -	$74,368 2,203 1,487 -

• 149 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

from settlements Subtotal Remeasurements of the net defined benefit liability (asset): Experience adjustments Return on plan assets Subtotal Payments from the plan Contributions by employer Effect of changes in foreign exchange rates As of 31 Dec. 2014 Current period service costs Net interest expense (income) Past service cost and gains and losses arising from settlements Subtotal Remeasurements of the net defined benefit liability (asset): Actuarial gains and losses arising from changes in financial assumptions Experience adjustments Return on plan assets Subtotal Payments from the plan Contributions by employer Effect of changes in foreign exchange rates As of 31 Dec. 2015		As of
	Defined benefit obligation	Fair value of plan assets	Benefit liability (asset)
	137,490 2,147 -	(59,432) - (176)	78,058 2,147 (176)
	2,147	(176)	1,971
	- - -	- (3,672) -	- (3,672) -
	139,637 1,905 2,796 -	(63,280) - (1,280) -	76,357 1,905 1,516 -
	144,338 4,818 (5,411) -	(64,560) - - (380)	79,778 4,818 (5,411) (380)
	(593)	(380)	(973)
	(6,033) - -	6,033 (3,404) -	- (3,404) -
	$137,712	$(62,311)	$75,401

The following significant actuarial assumptions are used to determine the present value of the defined benefit obligation:

Discount rate Expected rate of salary increases	As of	As of
	31 Dec. 2015	31 Dec. 2014
	1.75% 3.00%	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 sensitivity analysis for significant assumption as of 31 December 2015 and 2014 is, as shown below:

Discount rate increase by 0.50% Discount rate decrease by 0.50% Future salary increase by 1.00 % Future salary decrease by 1.00%	Effect on the defined benefit obligation	Effect on the defined benefit obligation	Effect on the defined benefit obligation	Effect on the defined benefit obligation
	2015		2014
	Increase defined benefit obligation	Decrease defined benefit obligation	Increase defined benefit obligation	Decrease defined benefit obligation
	$- 10,342 21,204 -	$9,416 - - 17,962	$- 10,803 22,229 -	$9,817 - - 18,753

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another. There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(17) Equities

(a) Common stock

The Company’s authorized capital was $4,500,000 on January 1, 2014, which was divided into 450,000 thousand shares with par value of NTD 10 each. The paid- in capital was $2,076,709 divided into 207,670 thousand shares.

The investors requested to convert the Company’s convertible bonds into common stocks by issuing new common shares in the amount of $251,800 in a total of 5,821 thousand shares from January 1, 2015 to December 31, 2015 and had completed the registration process for 4,006 thousands units as of December 31, 2015. As the registration process for the remaining 1,815 thousands unit has not been completed, the accumulated book value of certificates of bond-to-stock conversion amounted to $18,155.

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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)

Based on the resolution adopted at the annual shareholders’ meeting held on June 11, 2015, the Company declared stock dividends paid out of retained earnings in the amount of $41,534. The Board of Directors approved the change and the effective date of the capital increase was set on September 2, 2015. The capital increase was approved by the competent authority and the registration process was completed on December 31, 2015. As of December 31, 2015, the Company’s authorized capital was $4,500,000, which was divided into 450,000 thousand shares with par value of NTD 10 each. The paid- in capital was $2,158,229 divided into 215,829 thousand shares.

(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,
	2015 $887,012 5,749 (4,666) 705 1,844 $890,644	2014
		$732,796 5,749 (3,930) 705 11,475
		$746,795

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a 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) Retained earnings and dividend policies

According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

• a. Payment of all taxes and dues;

• b. Offset prior years’ operation losses;

• c. Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve;

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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)

• d. Set aside or reverse special reserve in accordance with law and regulations; and

• e. After deducting items (a), (b), (c), and (d) above from the current year’s earnings, 1% to 15% of the remaining amount together with the prior years’ unappropriated earnings may be allocated as employee bonuses, which may be distributed through issuance of new shares of the Company or cash, upon meeting certain requirements set by the Board of Directors.

• f. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

However, according to the addition of Article 235-1 of the Company Act announced on 20 May, 2015, the Company shall provide a fixed amount or percentage of the actual profit for a year to be distributed as “employees’ compensation”, after deducting and setting aside an amount equal to the cumulative losses (if any). The aforementioned employees’ compensation may be made in the form of stocks or cash, which shall be determined by a resolution adopted by a majority vote at a board of directors meeting attended by two-thirds or more of the directors and be reported at a shareholders’ meeting. Furthermore the Articles of Incorporation may stipulate that the employees’ compensation could be distributed to employees of affiliated enterprises meeting certain criteria. The Articles of Incorporation are to be amended in accordance with the aforementioned recent amendment to the Company Act in the shareholders’ meeting in 2016.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders’ meeting. At least 10% of total dividends must be paid in the form of cash.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. 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.

• 153 -

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

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

When the Company distributes earnings, 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.

Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Financial-Supervisory-Securities-Corporate-1010012865, which sets out the following provisions for compliance:

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 to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an 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.

As of the years ended January 1, 2015 and 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.

Details of the 2015 and 2014 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on March 11, 2016 and June 11, 2015, respectively, are as follows:

Common stock -cash dividend Legal reserve Capital surplus transferred to capital Total	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2015	2014	2015	2014
	$675,430 97,019 65,364	$581,479 79,375 41,534	$3.1 0.3	$2.8 0.2
	$837,813	$702,388

Please refer to Note 6(19) for further details on employees’ compensation and remuneration to directors and supervisors.

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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)

(d) Non-controlling interests

Beginning balance Profit 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 in non-controlling interests Ending balance	For theyears ended December 31	For theyears ended December 31
	2015 $65,059 (16,092) 2,749 2,999 $54,715	2014
		$80,797 (18,805) 3,067 - $65,059

(18) Operating revenue

Sale revenue Less: Sales returns, discounts and allowances Total	For theyears ended December 31	For theyears ended December 31
	2015 $12,168,027 (56,769) $12,111,258	2014
		$11,680,010 (37,291)
		$11,642,719

(19) Summary of employee benefits, depreciation and amortization expenses by function for the years ended December 31, 2015 and 2014:

		For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
		2015			2014
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$806,933	$799,199	$1,606,132	$836,236	$703,418	$1,539,654
Labor and health insurance	60,370	116,499	176,869	56,981	97,571	154,552
Pension	9,023	23,136	32,159	8,378	22,047	30,425
Other employee benefits expense	65,440	57,241	122,681	71,638	54,794	126,432
Depreciation	70,536	81,809	152,345	114,533	53,351	167,884
Amortization	4,114	25,124	29,238	12,663	47,346	60,009

The number of employees for Company and its subsidiaries are 4,974 and 5,219 on December 31, 2015 and 2014, respectively.

• 155 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

A resolution was passed at a Board of Directors meeting of the Company held on December 24, 2015 to amend the Articles of Incorporation of the Company. According to the resolution, 1% to 15% of profit of the current year is distributable as employees’ compensation and no higher than 3% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. The Articles of Incorporation are to be amended in the shareholders’ meeting in 2016. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Based on profit of current year, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended 31 December 2015 to be 1.70% of profit of current year and 1.10% of profit of current year, respectively, and recognized $20,000 and $13,000 as employee benefits expense. A resolution was passed at a Board of Directors meeting held on March 31, 2016 to distribute $20,000 and $13,000 in cash as employees’ compensation and remuneration to directors and supervisors, respectively.

The estimated employee bonuses and remuneration to directors and supervisors for the year ended 31 December 2014 were based on post-tax net income of the period 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 for the year ended 31 December 2014 are recognized as employee benefits 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 resolution of shareholders’ meeting will be recognized in profit or loss of the subsequent year. The number of stocks distributed as employee bonuses 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 Company estimated the amounts of the employee bonuses and remuneration to directors and supervisors for the year ended 31 December 2014 to be $16,000 and $11,500, respectively. No material differences exist between the estimated amount and the actual distribution of the employee bonuses and remuneration to directors and supervisors for the year ended 31 December 2014.

• 156 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

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

For the years ended December

	For the years ended December	For the years ended December
Bad debt reversal Interest income Dividend income Sample income Others Total	31,
	2015 $7,611 26,473 19,656 27,164 103,122 $184,026	2014
		$2,250 15,051 8,958 24,684 60,822
		$111,765

(b) Other gains and losses

Foreign exchange gains, net Gain on disposal of investments Gain of financial instruments at fair value through profit or loss Loss on impairment of financial instruments Loss on disposal of property, plant and equipment Others Total	For theyears ended December 31,	For theyears ended December 31,
	2015 $131,022 2,039 35,161 - (3,571) (21,963) $142,688	2014
		$26,588 13,469 1,014 (343) (22,663) (27,309)
		$(9,244)

(c) Finance costs

Interest on loans from bank Interest on bonds payable Total	For the years ended December 31,	For the years ended December 31,
	2015 $35,266 2,993 $38,259	2014
		$33,424 7,157
		$40,581

• 157 -

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, 2015:

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of a foreign operation Unrealized gains (losses) from available-for-sale financial assets Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during theperiod	Reclassification adjustments duringtheperiod	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income,net of tax
	$973 (1,767) (82,181) 17,321	$ - - - -	$973 (1,767) (82,181) 17,321	$(165) 542 - -	$808 (1,225) (82,181) 17,321
	$(65,654)	$-	$(65,654)	$377	$(65,277)

For the year ended December 31, 2014

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of a foreign operation Unrealized gains (losses) from available-for-sale financial assets Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during theperiod	Reclassification adjustments duringtheperiod	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income,net of tax
	$(1,971) 169,561 15,056 8,412	$ - - - -	$(1,971) 169,561 15,056 8,412	$355 (27,775) - -	$(1,636) 141,786 15,056 8,412
	$191,058	$-	$191,058	$(27,440)	$163,618

• 158 -

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,
	2015	2014
Current income tax expense :
Current income tax charge	$365,181	$255,764
Adjustments in respect of current income tax	15,367	(638)
of prior periods
Deferred tax expense:
Deferred tax expense relating to origination	35,358	13,449
and reversal of temporary differences
Total income tax expense	$415,906	$268,575
Income tax relating to components of other comprehensive income

	For the years ended	For the years ended
	December 31,
	2015	2014
Deferred tax expense (income):
Exchange differences on translation	$(542)	$27,775
of foreign operations
Remeasurements of defined benefit plans	165	(335)
Income tax relating to components of other comprehensive income	$(377)	$27,440
A reconciliation between tax expense and the product	of accounting profit
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 revenues exempt from taxation Tax effect of expenses not deductible for tax purposes Tax effect of deferred tax assets/liabilities 10 % surtax on undistributed retained earnings Tax effect of different tax rates for entities in other tax regions Adjustments in respect of current income tax of prior periods Total income tax expense (income) recognized in profit or loss	For the years ended 31 December	For the years ended 31 December
	2015	2014
	$1,370,009	$1,043,522
	$232,902 (41,618) 6,067 11,742 13,126 178,320 15,367	$177,399 (41,594) 1,217 - 25,554 106,637 (638)
	$415,906	$268,575

• 159 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Deferred tax assets (liabilities) relate to the following:

For the year ended December 31, 2015

Temporary differences Exchange differences on translation of foreign operations Investments accounted for using the equity method Unrealized intragroup profits and losses Unrealized foreign exchange gains or losses Loss from price recovery (reduction) of inventories Revaluations of financial assets at fair value through profit or loss Revaluations of financial liabilities at fair value through profit or loss Remeasurements of defined benefit plans Non-current liability – Defined benefit Liability Deferred income-government grants Accumulated losses 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 $(76,421) (130,779) 1,529 (2,680) 2,481 (1,908) 4,432 5,660 7,320 4,850 6,214 402 707 $(178,193) $30,342 $208,535	Recognized in profit or loss $- (48,029) 1,920 1,412 16,830 (2,742) (3,515) - 3 (124) - - (1,113) $(35,358)	Recognized in other comprehensive income $542 - - - - (165) - (165) - - - - - $377	Balance as of December 31
				$(75,879) (178,808) 3,449 (1,268) 19,311 (4,650) 917 5,495 7,323 4,726 6,214 402 (406)
				$(213,174)
				$47,837
				$261,011

• 160 -

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, 2014

Temporary differences Exchange differences on translation of foreign operations Investments accounted for using the equity method Unrealized intragroup profits and losses Unrealized foreign exchange gains or losses Loss from price recovery (reduction) of inventories Revaluations of financial assets at fair value through profit or loss Revaluations of financial liabilities at fair value through profit or loss Remeasurements of defined benefit plans Non-current liability – Defined benefit Liability Deferred income-government grants Convertible Bond Accumulated losses 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 $(47,709) (114,134) - (667) 2,203 1,768 - 5,325 7,317 4,974 756 - (53) 2,916 $(137,304) $28,175 $165,479	Recognized in profit or loss $(937) (16,645) 1,529 (2,013) 278 (3,676) 4,432 - 3 (124) (756) 6,214 455 (2,209) $(13,449)	Recognized in other comprehensive income $(27,775) - - - - - - 335 - - - - - - $(27,440)	Balance as of December 31
				$(76,421) (130,779) 1,529 (2,680) 2,481 (1,908) 4,432 5,660 7,320 4,850 - 6,214 402 707
				$(178,193)
				$30,342
				$208,535

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 2015, and December 31 2014, the taxable temporary differences associated with investment in subsidiaries, for which deferred tax liability has not been recognized, aggregated to $119,790 and $92,480, respectively.

• 161 -

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,
	2015 $207,019	2014
		$88,526

The expected creditable ratio for 2015 and the actual creditable ratio for 2014 were 13.27% and 14.21%, 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,
	2015 $382 1,559,590 $1,559,972	2014
		$382 1,249,441
		$1,249,823

The assessment of income tax returns

As of December 31, 2015, 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 2013 Assessed and approved up to 2013 Assessed and approved up to 2013 Assessed and approved up to 2013

• 162 -

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.

(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) 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,	For the years ended December 31,
	2015 $970,195 214,224 $4.53 $970,195 2,484 $972,679 214,224 326 1,028 215,578 $4.51	2014
		$793,752
		207,670
		$3.82
		$793,752 5,941
		$799,693
		211,752 36 3,347
		211,053
		$3.79

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were authorized for issue.

• 163 -

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

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

(24) Disposal of subsidiaries

On March 13, 2015, the Company disposed of 100% interest in its subsidiary - JY Sinact and lost control of the entity. A cash consideration of $12,560 was received and the Company has recognized gain on disposal of investment amounting to $733, which was recorded in the statements of other comprehensive income.

The book value of the identifiable assets and liabilities of JY Sinact as of March 13, 2015 were:

Assets Cash on hand & demand deposits Account receivable and other receivable Inventories Property, plant and equipment Intangible assets Others Liabilities Short-term loans Account payable and other payable Other current liabilities The net asset disposition (a) Gain on disposal of subsidiaries The price charged by cash and cash equivalents The net asset value of the sale Gain on disposal of subsidiaries	Amount
	$132,433 122,362 24,628 196,362 2,432 30,514 (231,234) (265,461) (209)
	$11,827
	Amount
	$12,560 11,827
	$733

(b) Net cash outflow from disposal of subsidiaries The price charged by cash and cash equivalents Less：Disposition of cash and cash equivalents balances Net cash outflow from disposal of subsidiaries	Amount
	$12,560 (132,433)
	$(119,873)

• 164 -

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

Significant transactions with related parties

(a) Sales

Other related parties	For the years ended December 31,	For the years ended December 31,
	2015 $3,466	2014
		$8,016

The sales price to the above related parties was determined through mutual agreement based on the market rates. The collection periods for domestic sales to related parties were month-end 60~120 days, while the term for overseas sales was net 45~75 days. The outstanding balance at 31 December 2015 and 2014 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

(b) Purchases

Other related parties	For the years ended December 31,	For the years ended December 31,
	2015 $169,931	2014
		$113,124

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.

(c) Accounts Receivable-Related Parties

Other related parties	As of December 31, 2015 2014 $588 $5,406	As of December 31, 2015 2014 $588 $5,406
	2015 $588
		$5,406

• 165 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (d) Other Receivables-Related Parties

Other related parties Accounts Payable-Related Parties Other related parties	As of December 31,	As of December 31,
	2015 2014 $359 $ - As of December 31,	2014
		$ -
	2015 $28,354	2014
		$28,567

• (e) Accounts Payable-Related Parties

• (f) Key management personnel compensation

Short-term employee benefits Post-employment benefits Total	For the years ended December 31,	For the years ended December 31,
	2015 $163,070 19,873 $182,943	2014
		$104,502 30,425
		$134,927

8. Assets pledged as security

None.

9. Significant contingencies and unrecognized contract commitments

• (1) The Company provided guarantees for subsidiaries’ financing to banks for the years ended December 31, 2015. Please refer to Note 13.(1)(b).

10. Significant disaster loss

None.

11. Significant subsequent events

None.

• 166 -

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

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

12. Others

(1)Categories of financial instruments

Financial assets Financial assets at fair value through profit or loss: Held for trading Embedded derivatives-bond Non-derivative financial assets Subtotal Available-for-sale financial assets： Financial assets at fair value Financial assets at cost-noncurrent Subtotal Loans and receivables: Cash and cash equivalents (exclude cash on hand) Debt instrument investments for which no active market exists 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: Held for trading Embedded derivative financial instruments Bond Subtotal Total	As of December 31,	As of December 31,
	2015 2014 $28,431 $14,318 77 - 42,472 31,031 70,980 45,349 93,265 175,446 371,495 205,275 464,760 380,721 3,027,546 2,401,021 95,723 - 2,926,038 3,220,212 109,827 120,518 6,159,134 5,741,751 $6,694,874 $6,168,114 As of December 31,	2014
		$14,318 - 31,031
		45,349
		175,446 205,275
		380,721
		2,401,021 - 3,220,212 120,518
		5,741,751
		$6,168,114
	2015	2014
	$1,919,023 2,234,512 47,035 8,571	$1,842,548 2,114,817 288,440 12,166
	4,209,141	4,257,971
	6,489 -	27,802 1,950
	6,489	29,752
	$4,215,630	$4,287,723

• 167 -

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

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

(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 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 are 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.

• 168 -

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, 2015 and 2014 are as follows:

For the year ended December 31, 2015

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 +/−16,780 +/−355 +/− 1,888 -	Sensitivity of equity
			+/−(330) +/−3,354 - +/− 9,326

• 169 -

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, 2014

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 +/−$8,211 +/− $164 +/− $1,850 -	Sensitivity of equity
			+/− $416 +/− $12,296 - +/− $17,544

(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, 2015 and 2014, amounts receivables from top ten customers represented 21.31% and 27.20% of the total accounts receivables of the Group, respectively. The credit concentration risk of other accounts receivables is insignificant.

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.

• 170 -

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

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

(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, 2015 Loans Notes and accounts payable Convertible bonds As of December 31, 2014 Loans Notes and accounts payable Convertible bonds	Less than 1 year $1,949,778 2,234,512 49,169 $1,878,817 2,114,817 -	2 to 3years $4,581 - - $7,105 - 306,030	4 to 5years $ - - - $1,244 - -	> 5years	Total
				$ - - - $ - - -	$1,954,359 2,234,512 49,169 $1,887,166 2,114,817 306,030

Derivative financial instruments

As of December 31, 2015 Forward foreign exchange contracts Inflows Outflows Net Cross Currency Swap Inflows Outflows Net	Less than 1 year $625 (7,114) $(6,489) $438,410 (426,800) $11,610	2 to 3years $ - - $- $ - - $ -	4 to 5years $ - - $- $ - - $ -	> 5years $ - - $- $ - - $ -	Total
					$625 (7,114)
					$(6,489)
					$438,410 (426,800)
					$11,610

• 171 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As of December 31, 2014 Forward foreign exchange contracts Inflows Outflows Net Cross Currency Swap Inflows Outflows Net	Less than 1 year $1,068 (27,833) $(26,765) $334,776 (332,000) $2,776	2 to 3years $ - - $ - $ - - $ -	4 to 5years $ - - $ - $ - - $ -	> 5years $ - - $ - $ - - $ -	Total
					$1,068 (27,833)
					$(26,765)
					$334,776 (332,000)
					$2,776

The table above contains the undiscounted net cash flows of derivative financial instruments.

(6) Fair values of financial instruments

• (a) The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

• a. The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.

• b. 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, beneficiary certificates, bonds and futures etc.) at the reporting date.

• 172 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• c. Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).

• d. Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

• e. The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation).

• (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.

• (c) Fair value measurement hierarchy for financial instruments

Please refer to Note 12.(8) for fair value measurement hierarchy for financial instruments of the Group.

• 173 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

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

(7) Derivative financial instruments

The Group’s derivative financial instruments include forward currency contracts, cross currency swap and embedded derivatives. The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as of December 31, 2015 and December 31, 2014 is as follows:

Forward currency contracts and Cross Currency Swap

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, 2015 Forward currency contract Forward currency contract Forward currency contract Forward currency contract Cross currency swaps As of December 31, 2014 Forward currency contract Forward currency contract Forward currency contract Forward currency contract Cross currency swaps	Notional Amount Buy call option USD 2,500 Buy put option USD 950 Sell call option USD 250 Sell put option USD 5,000 USD 14,000 Buy call option USD 2,900 Buy put option USD 400 Sell call option USD 1,050 Sell put option USD 5,800 USD 11,000	Contract Period
		August 7, 2015 - December 12, 2016 December 18, 2015 - January 26, 2016 May 15, 2015 - March 15, 2016 August 7, 2015 - December 12, 2016 January 10, 2014 - August 5, 2016 March 8, 2014 - December 9, 2015 March 8, 2014 - September 7, 2015 March 8, 2014 - September 7, 2015 March 8, 2014 - December 9, 2015 January 10, 2014 - January 14, 2016

Embedded derivatives

The embedded derivatives arising from issuing convertible bonds have been separated from the host contract and were carried at fair value through profit or loss. Please refer to Note 6(13) for further information on this transaction.

The counterparties for the aforementioned derivatives transactions are well

• 174 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

known local or overseas banks, as they have sound credit ratings, the credit risk is insignificant.

The forward foreign exchange contracts and cross currency swaps have been entered into to hedge the foreign currency risk of net assets or net liabilities, and there will be corresponding cash inflow or outflows upon maturity and the Group has sufficient operating funds, the cash flow risk is insignificant.

(8) Fair value measurement hierarchy

(a) Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(b) Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis is as

• 175 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

follows:

As of December 31, 2015 Financial assets: Financial assets at fair value through profit or loss Forward foreign exchange contracts Fund Stock Embedded derivatives Available-for-sale financial assets: Stock Financial liabilities: Financial liabilities at fair value through profit or loss Forward foreign exchange contracts As at 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 $ - 28,507 13,965 - 93,265 $ - Level 1 $- 31,031 175,446 $- -	Level 2 $28,431 - - 77 - $6,489 Level 2 $14,318 - - $27,802 1,950	Level 3 $ - - - - - $ - Level 3 $ - - - $ - -	Total
				$28,431 28,507 13,965 77 93,265 $6,489 Total
				$14,318 31,031 175,446 $27,802 1,950

• 176 -

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

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

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2015 and 2014, there were no transfers between Level 1 and Level 2 fair value measurements.

• (c) Fair value measurement hierarchy of the Company’s assets and liabilities not measured at fair value but for which the fair value is disclosed.

None.

• (9) 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 liabilities Monetary items: USD RMB EUR Foreign exchange gains or losses on monetary financial assets and financial liabilities Monetary items: USD RMB HKD	As of December 31,	As of December 31,	2015 NTD $3,031,201 2,074,465 44,566 1,133,325 1,114,531 14,548 9,188 58,591 13,789	As of December 31,	As of December 31,	2014
	Foreign currencies $91,671 407,557 1,233 34,270 218,964 403 288 11,444 3,347	Foreign exchange rate 33.07 5.09 36.13 33.07 5.09 36.13 31.91 5.12 4.12		Foreign currencies $65,721 391,446 1,480 46,575 139,066 259 (8) (3,506) 891	Foreign exchange rate 31.72 5.11 38.55 31.72 5.11 38.55 30.37 4.94 3.92	NTD
						$2,084,530 2,001,271 57,059 1,477,263 710,979 9,966 (213) (17,316) 3,489

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

• 177 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(10) 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.

13. Other disclosure

• (1) Information at significant transactions

• (a) Financing provided to others for the year ended December 31, 2015: Please refer to Attachment 1.

• (b) Endorsement/Guarantee provided to others for the year ended December 31, 2015: Please refer to Attachment 2.

• (c) Securities held as of December 31, 2015: 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, 2015: 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, 2015: 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, 2015: None.

• 178 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (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, 2015: 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, 2015: 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.

• (2) Information on investees:

Names, locations, main businesses and products, original investment amount, investment as of December 31, 2015, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2015: 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.

• 179 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (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.

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, 2015

Revenue External customer Inter-segment Total revenue Segment profit Segment assets Segment liabilities	Cable Segment $7,390,386 1,968,640 $9,359,026 $1,249,557 $5,184,314 $3,334,685	Electronic Segment		Management Operation Segment	Adjustment and cancellation (Note)	Consolidated
		$4,108,017 36,421		$612,855 219,736	$ - (2,224,797) $(2,224,797) $ - $3,190,229 $75,401	$12,111,258 -
		$4,144,438		$832,591		$12,111,258
		$408,534		$(288,082)		$1,370,009
		$1,709,707		$1,029,421		$11,113,671
		$1,038,878		$1,026,651		$5,475,615

Note: Inter-segment revenues were eliminated when consolidated.

• 180 -

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, 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.

• (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, 2015 and 2014.

• (c) Geographical information

• i. Revenue from external customers:

Mainland China (Hong Kong) United States Taiwan Other countries Total	For theyears ended December 31,	For theyears ended December 31,
	2015	2014
	$7,777,857 1,461,815 791,616 2,079,970	$7,152,919 1,216,713 711,689 2,561,398
	$12,111,258	$11,642,719

The revenue information above is based on the location of the customers.

• 181 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

ii. Non-current assets:

Mainland China United States Taiwan Other Total	As of December 31,	As of December 31,
	2015	2014
	$1,437,344 1,103,343 29,226 13,003	$1,414,731 1,110,219 3,749 9,070
	$2,582,916	$2,537,769

• (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, 2015 and 2014.

• 182 -

Attachment 1: Financing provided to others for the year ended December 31, 2015

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	SZSB	Other receivables	Y	$65,845	$ -	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$241,457	$965,826
2	BJSB	BJSB Tongan	Other receivables	Y	$104,224	$ -	$ -	0.00%	Note 4	$-	Need for operating	$ -	-	$ -	$64,026	$256,103

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 2015.

$2,414,566X10%=$241,457

$640,258X10%=$64,026

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 2015. $2,414,566Í40%=$965,826

$640,258Í40%=$256,103

Note 4: For short-term financing.

-183 -

Attachment 2: Endorsement/Guarantee provided to others for the year ended December 31, 2015

(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	$2,233,336	$605,003	$429,858	$ -	none	7.70%	$5,583,341	Y	N	Y
0	The Company	BJSB	2	$2,233,336	$209,827	$ -	$ -	none	-	$5,583,341	Y	N	Y
0	The Company	BJSB Tongan	2	$2,233,336	$830,062	$827,972	$273,894	none	14.83%	$5,583,341	Y	N	Y
0	The Company	SHSB	3	$2,233,336	$49,692	$49,599	$ -	none	0.89%	$5,583,341	Y	N	Y
0	The Company	TCSB	3	$2,233,336	$177,485	$99,198	$ -	none	1.78%	$5,583,341	Y	N	Y
0	The Company	SZSB	3	$2,233,336	$64,683	$33,066	$ -	none	0.59%	$5,583,341	Y	N	Y
0	The Company	T-CONN Zhongshan	3	$2,233,336	$297,904	$297,594	$64,591	none	5.33%	$5,583,341	Y	N	Y
0	The Company	T-CONN Precision	3	$2,233,336	$132,512	$132,264	$ -	none	2.37%	$5,583,341	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 2015. $5,583,341X40%=$2,233,336

• 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 2015.

• 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.

-184 -

Attachment 3: Securities held as of December 31, 2015 (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type and name of securities	Relationship (Note 1)	Financial statement account	December 31, 2015	December 31, 2015	December 31, 2015	December 31, 2015	December 31, 2015	December 31, 2015	Note
				Shares	Book value			Percentage of ownership (%)	Fair value
The Company	Top Taiwan VII Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	6,000,000 shares		$60,750		3.06%	Note 2	-
The Company	Top Taiwan Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	6,000,000 shares		60,000		7.50%	Note 2	-
EuropeSB	Elcotronic Holding GmbH	-	Financial assets measured at cost- noncurrent	-		59,933		19.00%	Note 2	-
The Company	Top Taiwan II Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	3,500,000 shares		35,000		5.00%	Note 2	-
The Company	Hotwire Development L.L.C	-	Financial assets measured at cost- noncurrent	11,000 shares		32,653		10.00%	Note 2	-
SB USA	Circuits & Cables LLC (C&C)	-	Financial assets measured at cost- noncurrent	-		26,453		19.95%	Note 2	-
The Company	Top Taiwan III Venture Capital Co., Ltd.	-	Financial assets measured at cost- noncurrent	2,357,724 shares		23,577		4.07%	Note 2	-
The Company	General Research Of Electronics Inc.	-	Financial assets measured at cost- noncurrent	16,000 shares		23,184		7.50%	Note 2	-
SHSB	Guo Shun Fund	-	Financial assets measured at cost- noncurrent	-		20,368		-	Note 2	-
The Company	Gongwin Biopharm Co. Ltd	-	Financial assets measured at cost- noncurrent	240,000 shares		18,685		18.69%	Note 2	-
The Company	Niigata Seimitsu Co., Ltd.	-	Financial assets measured at cost- noncurrent	100,000 shares		13,460		0.46%	Note 2	-
The Company	Ultracap Technologies Co., Ltd.	-	Financial assets measured at cost- noncurrent	791,667 shares		12,667		4.82%	Note 2	-
The Company	Dynahz Technologies	-	Financial assets measured at cost- noncurrent	2,309,725 shares		6,150		16.67%	Note 2	-
The Company	Bandrich, Inc.	-	Financial assets measured at cost- noncurrent	330,000 shares		4,125		1.62%	Note 2	-
SB BVI	Argosy (Beijing) Technologies Co., Ltd.	-	Financial assets measured at cost- noncurrent	-		2,500		12.00%	Note 2	-
Kwan-Ze	Actmax Technologies Inc.	-	Financial assets measured at cost- noncurrent	-		1,441		19.00%	Note 2	-
			Subtotal			400,946
			Less: accumulated impairment			(29,451)
			Total			$371,495
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%	$93,265	-
			Adjustments for change in value of investment				(67,125)
			Less: accumulated impairment				(7,991)
			Total				$93,265

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

-185 -

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, 2015

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	$1,513,747	43.14%	Trading condition is as same as other supplier	N/A	N/A	$(408,825)	(45.59%)

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	$1,513,747	(Note 4)	12.50%
1	Jiangyin sinbon Electronics Co., Ltd.(JYSB)	The Company	2	Sales	$1,513,747	(Note 4)	12.50%

• 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 subsidiary.

• 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.

-186 -

Attachment 6: Names, locations, main businesses and products, original investment amount, investment as at December 31, 2015, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2015: (Excluding investment in Mainland China)

Investor	Investee company (Note1 )	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of December 31, 2015	Investment as of December 31, 2015	Investment as of December 31, 2015	Net income (loss) of investee company (Note1)	Investment income (loss) recognized (Note 1)	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
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%	$606,879	$202,066	$202,066	Subsidiary
The Company	JPSB	Japan	Selling a wide variety of connectors, wires and cables.	JPY25,000,000 $5,008	JPY25,000,000 $5,008	350 shares	70.00%	$7,953	$1,570	$1,099	Subsidiary
The Company	Kwan-Ze	Taipei County, Taiwan	Holding company	$235,600	$235,600	23,560,000 shares	100.00%	$261,775	$(38,003)	$(38,003)	Subsidiary
The Company	Top Taiwan IV Venture Capital Co., Ltd	Taipei City, Taiwan	Holding company	$140,000	$160,000	14,000,000 shares	20.00%	$160,134	$13,014	$2,603	Investee under the equity method
The Company	SB BVI	British Virgin Islands	Holding company	USD40,421,000 $1,321,747	USD40,421,000 $1,321,747	-	100.00%	$3,207,603	$254,043	$254,043	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%	$16,200	$(5,203)	$(1,951)	Investee under the equity method
The Company	USSB	U.S.A Florida	Selling a wide variety of connectors, wires and cables.	$ -	$ -	-	51.00%	$230	$3,193	$1,629	Subsidiary
The Company	S A M O A	Samoa	Holding company	USD3,143,000 $101,747	USD3,143,000 $101,747	-	51.51%	$10,628	$ -	$ -	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral	$30,648	$30,648	2,945,034 shares	3.50%	$38,131	$92,769	$3,250	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%	$7,153	$2,288	$1,144	Subsidiary
The Company	S E L	Mauritius	Holding company	USD 6,109,000 $192,742	USD 6,109,000 $192,742	-	64.48%	$52,140	$(42,056)	$(27,118)	Subsidiary
The Company	Sinbon USA LLC.	216th street SW,Suite D Lynneood WA 98036	Logistic center.	USD1,400,000 $43,500	USD900,000 $27,864	-	100.00%	$44,112	$(1,487)	$(1,487)	Subsidiary
The Company	Sinbon Europe GmbH	Pfarrkirchen, Germany	Logistic center.	EUR1,684,000 $61,743	$ -	-	100.00%	$60,837	$ -	$ -	Subsidiary
The Company	Ray Service ADA Corp.	Miaoli County, Taiwan	Manufacturing and selling signal cables and cabin wiring.	$27,000	$ -	2,700,000 shares	90.00%	$27,003	$3	$3	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%	USD1,651,000 $54,579	$ -	$ -	Subsidiary

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Attachment 6: Names, locations, main businesses and products, original investment amount, investment as at December 31, 2015, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2015: (Excluding investment in Mainland China)

Investor	Investee company (Note1 )	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of December 31, 2015	Investment as of December 31, 2015	Investment as of December 31, 2015	Net income (loss) of investee company (Note1)	Investment income (loss) recognized (Note 1)	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
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%	USD166,000 $5,486	USD(419,000) $(13,370)	$ -	Subsidiary
S E L	S P L	Mauritius	Logistic center.	USD 100,000 $3,228	USD 100,000 $3,228	-	100.00%	USD2,050,000 $67,800	USD(13,000) $(401)	$ -	Subsidiary
SB BVI	HK Sinact	Hong Kong	Holding company	$ -	USD4,671,000 $145,335	-	-	$ -	$ -	$ -	Subsidiary
Kwan-Ze	Digi O2	Miaoli Country, Taiwan	Selling a wide variety of connectors and cables.	$92,740	$42,740	9,274,000 shares	92.74%	$9,976	$(55,433)	$ -	Subsidiary
Kwan-Ze	Argocy Research Inc.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral	$147,175	$147,175	14,624,200 shares	17.40%	$193,633	$16,139	$ -	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%	USD182,000 $6,002	USD304,000 $9,690	$ -	Subsidiary
Argocy Research Inc.	Argosy Technology Inc.(USA)	U.S.A	Sell Multimedia related products, ODM and OED	$30,347	$30,347	900 shares	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%	$17,285	$23	$ -	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%	$7,975	$(457)	$ -	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%	$87,732	$(5,502)	$ -	Investee under the equity method
Argocy Research Inc.	ROTEC LIMITED	British Virgin Islands	Holding company	$268,479	$268,479	8,550 shares	77.38%	$364,234	$14,629	$ -	Investee under the equity method
Global Saber Electronics Co., Ltd	ROTEC LIMITED	British Virgin Islands	Holding company	$72,918	$72,918	2,500 shares	22.62%	$106,474	$14,629	$ -	Investee under the equity method

• Note 1: （1）Information such as "Investee company", "Address", "Main businesses and products", "Initial Investment"and "Investment as of December 31, 2015"

shall be filled according to the Company's or the directly- and indirectly-controlled investees' reinvestments, and indicate the relationship in the Notes.

• （2）Filled in information of "net income (loss) of investee for the year ended 31 December 2015" for "Net income (loss) of investee company".

• （3）Only information regarding "investment income (loss) under the equity method" is required for "Investment income (loss) recognized" and the investor shall confirm that its investment income (loss) includes the subsidiaries' re-

-188 -

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, 2014	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2015	Net income (loss) of investee company	Percentag e of Ownership	Investment income (loss) recognized	Carrying Value as of December 31, 2015	Accumulated Inward Remittance of Earnings as of Outflow December 31, 2015
					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	$5,815	100.00%	$5,815 (Note 1)	$640,275	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	USD8,869,000 $282,989	100.00%	USD8,869,000 $282,989 (Note 1)	USD73,022,000 $2,414,562	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 (11,000) $(362)	100.00%	USD (11,000) $(362) (Note 1)	USD7,116,000 $235,290	USD185,000 $6,050
SZSB	Selling a wide variety of connectors, wires and cables.	USD 2,810,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 2,750,000 $83,385	$ -	$ -	USD 2,750,000 $83,385	USD701,000 $22,373	100.00%	USD701,000 $22,373 (Note 1)	USD9,890,000 $327,028	$ -
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	USD603,000 $19,254	100.00%	USD603,000 $19,254 (Note 1)	USD8,839,000 $292,278	$ -
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 $2,500	$ -
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, 2014	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2015	Net income (loss) of investee company	Percentag e of Ownership	Investment income (loss) recognized	Carrying Value as of December 31, 2015	Accumulated Inward Remittance of Earnings as of Outflow December 31, 2015
					Outflow	Inflow
JY Sinact (Note 5)	Manufacturing and selling a wide variety of electronic materials.	USD 9,500,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 5,666,000 $177,159	$ -	USD 400,000 $12,560	USD 5,266,000 $164,599	$ -	-	$ -	$ -	$ -
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(895,000) $(28,558)	64.48%	USD(577,000) $(18,414) (Note 3)	USD(719,000) $(23,789)	$ -
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	$299,197	100.00%	$299,197 (Note 1)	$570,470	$ -
Accumulated Investment in Mainland China as of December 31, 2015 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment USD37,590,000 USD 54,320,000 N/A (Note 4)
Accumulated Investment in Mainland China as of December 31, 2015			Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
USD37,590,000			USD 54,320,000		N/A (Note 4)

Note 1: Based on the financial statements certificated by the public accountant of the parent company in Taiwan.

Note 2: Investee was measured at cost.

Note 3: The financial statements was 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.

Note 5: The Company sold the equity interest in HK Sinact (including its investee company- JY Sinact) on March 13, 2015. The Company held no shares of the subsidiary as of December 31, 2015.

-190 -

• 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

• 191 -

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	2014	2015	Difference
			Amount	Percentage
Current assets	7,949,062	8,530,755	581,693	7.32
Fixed assets	1,539,336	1,507,537	(31,799)	(2.07)
Other assets	158,299	135,100	(23,199)	(14.66)
Total assets	10,486,831	11,113,671	626,840	5.98
Current liabilities	4,795,863	5,115,795	319,932	6.67
Long-term liabilities	300,606	4,504	(296,102)	(98.5)
Total liabilities	5,402,715	5,475,615	72,900	1.35
Capital stock	2,076,709	2,176,454	99,745	4.8
Capital surplus	746,795	890,644	143,849	19.26
Retained earnings	1,936,291	2,325,815	389,524	20.12
Total equities	5,084,116	5,638,056	553,940	10.9
Note: (1) Long-term liabilities decrease was transferred to short-term. (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	Unit: NT$10,000	Unit: NT$10,000	Unit: NT$10,000	Unit: NT$10,000
		2014	2015		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	$(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) 	$(56,769)	12,168,027 (56,769 )  12,111,258 -  12,111,258 (9,389,101)  2,722,157  2,722,157 (1,655,368) 	488,017 (19,478)  468,539  468,539 (276,782)  191,757  191,757 (75,558) 	4.18 52.23  4.02  4.02 3.04  7.58  7.58 4.78 

• 192 -

	2014	2014	2014	2015	2015	2015		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			950,590 92,932  1,043,522 (268,575)  774,947			1,066,789 303,220  1,370,009 (415,906)  954,103		116,199 210,288  326,487 (147,331)  179,156		12.22 226.28  31.29 54.86  23.12
Addition/reduction variable analysis: (1) Income tax expense increased as re (2) Non-operatingincome increased a			venue increased. s exchangegain increased.

7.3. Cash flows

7.3.1. Analysis of cash flows in last two years

7.3.1. Analysis of cash	flows in last twoyear	s
Year Item	2014	2015	Increase (reduction) proportion
Cash flow ratio	12.84%	28.40%	15.56%
Cash flow adequacyratio	95.85%	118.46%	22.61%
Cash reinvestment ratio	1.40%	12.12%	10.72%
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
666,651	5,968,111	6,279,323	355,439	-

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 2015	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.	－	－

• 193 -

Description Item	Amount by 31 Dec 2015	Policy	Major causes of P/L	Improvement plans	Other future investment plans
		trade
Top Taiwan Venture Capital	140,000	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 losses.	Keep watching and pushing investees.	－
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	Operations of that company brought profits.	－	－
Korea SINBON Electronics Co.,Ltd	1,019	Cultivation of and service for South Korean customers.	Operation losses.	Continuous cultivation of local customers.	－
Samoa Smart & Diligent Co., Ltd.	101,747	Indirect control of the backlight module business in Mainland.	Operations of that company brought profits.	－	－
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 Tongan Electronics (Beijing)	89,134	Cultivation of and service for customers in northern China.	Operations of that company brought profits.	－	－
SINBON USA LLC.	43,500	Cultivation of customers in USA.	Operation losses.	Continuous cultivation of local customers.
Ray Service AVA Co., Ltd.	27,000	Development products in aviation industry.	Operation losses and in beginning stage.	Continuous cultivation of local customers.
SINBON Europe GmbH	61,743	Cultivation of customers in EU.	Operation losses and in beginning stage.	Continuous cultivation of local customers.

• 194 -

7.6. Risk items

• 7.6.1. Impact on profits and losses of interest rate and exchange rate volatility and inflation and future countermeasures:

• (1) Impact on profits and losses of interest rate volatility and future countermeasures in recent years

  • By the end of 2015, the amount of long-term debts from banks was NT$4,504,000, with interest rate at 0.9%. 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 2015 the recognized profits from exchange were NT$131,022,000. 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 2015.

• 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 2015, we did not engage in high-risk, high-leverage investments.

• (2) In 2015, 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$5,583,341,000. By the end of 2015, the balance of endorsements and guarantees was NT$1,869,551,000.

• 7.6.3. Future R&D plans and estimated R&D investments Before 2015, 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 2015 we invested a total of NT$384,192 thousand on research and development, with 9.22% more than last year, to actively develop electronic parts and components for the Internet of Thing (IoT), robots, and smart home. At the 4th board meeting of 2015, we even passed a joint venture in Ray Service AVA Co., Ltd with Czech Ray Service a. s. company for creating aerospace products. 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.

• 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

• 195 -

R&D team to develop products meeting customer demand to enhance competitiveness.

• 7.6.6. Impact of corporate image on organizational crisis management and 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.

• 196 -

8. Special Notes

8.1. Information of affiliates

8.1.1. Consolidated business reports of affiliates

(1) Affiliates organization chart

==> picture [485 x 603] 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% 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%
(2) Basic information of affiliates
Name Establishment Paid-in Capital Address Major scope of business or
Date products
Building No. 26, Production and sales of
Liando U Valley, No. comprehensive connectors.
15, Jingsheng South
SINBON Beijing
1993.12.20 US$4.45 million 4th Street, Majuqiao,
(Factory)
Tongzhou, District,
Beijing, 101102,
China
Unit 05, 18/F, Lemmi Sales of comprehensive
SINBON Hong Kong Centre, 50 Hoi Yuen cables, connectors, and
1995.6.20 HK$95.61 million
(Contact Office) Road, Kwun Tong, other electronic parts and
Kowloon, Hong Kong components.
SINBON Shanghai 1996.3.15 US$3.28 million 3F, Building 60, No. Sales of comprehensive
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• 197 -

Name	Establishment Date	Paid-in Capital	Address	Major scope of business or products
(Sales Office)			461, Hong-Cao Rd., Shanghai 200233, China	Cables, connectors, and other electronic parts and components.
Sinbon International Enterprise CompanyLimited	2000.10.24	US$48.18 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$2.81 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$200	273 Lake Breeze Circle, Lake Mary, Florida 32746, U.S.A.	Sales of comprehensive cables, connectors, and other electronic parts and components.
SINBON Japan (Sales Office)	2004.09.09	JPN25 million	Chiyoda 4-1-7, Naka-Ku Nagoya City, 460-0012, Japan	Sales of comprehensive cables, connectors, and other electronic parts and components.
Guanze Co., Ltd.	2003.01.22	NT$ 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 Tongan 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, Taiwan	Production and sales of comprehensive electronic connectors and cables.
Samoa Smart & Diligent Co.,Ltd.	2003.07.28	US$6.10 million	Level 2, Lotemau Centre Vaea Street,	Comprehensive investments

• 198 -

Name	Establishment Date	Paid-in Capital	Address	Major scope of business or products
			Apia Samoa
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$1.40 million	4265 Gibson Dr., Tipp City ,Ohio 45371	Overseas sales center
Ray Service AVA Co., Ltd.	2015.12.28	NT$30 million	No. 582 Kuohwa Road, Miaoli 360, Taiwan	Production and sales of comprehensive electronic connectors and cables.
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$10.13 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$7.10 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.
SINBON Europe GmbH	2015.9	EUR 1.68 million	Passauer Str. 99 84347 Pfarrkirchen	General investment

• (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 (Factory)	Chairman Director Director President (concurrent)	Joseph Wang Xiao-jing Chi Wei-ming Liang Chi-chou Chang (All are representatives of SINBON Electronics)	US$4.45 million	100.00%
SINBON Hong Kong (Contact Office)	Director	Joseph Wang, Wei-ming Liang,Huang-ji Lin, Chi-chou Chang (All are representatives of SINBON	HK$95.61 million	100.00%

• 199 -

Name	Title	Name or Representative	Shares Held
			Shares	Percentage
		Electronics)
SINBON Shanghai (Sales Office)	Chairman Director Supervisor	Joseph Wang Wei-ming Liang, Xiu-sui Lin Chi-chou Chang (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$48.18 million	100.00%
SINBON Jiangyin (Factory)	Chairman Director Supervisor	Joseph Wang Wei-ming Liang, Chi-chou Chang, 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 Chi-chou Chang (All are representatives of Sinbon International Enterprise Company Limited)	US$2.81 million	100.00%
Sinbon Technologies, L.L.C	Director Director	Wei-ming Liang(Representative of SINBON Electronics) Steve Confield	-	51.00%
SINBON Japan (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, Chi-chou Chang 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 Chi-chou Chang, Guo-cai Song Huang-ji Lin (All are representatives of Sinbon International Enterprise Company Limited)	US$6 million	100.00%
SINBON Tongan Electronics Beijing	Chairman Director Director Supervisor (concurrent)	Joseph Wang Xiao-jing Chi Wei-ming Liang Chi-chou Chang (All are representatives of SINBON International Enterprise Company Limited)	US$3 million	100.00%
DigiO2 International Ltd.	Chairman Director	Wei-ming Liang Hun-songChen,Jun-xingLiang	9,274,000 shares	92.74%

• 200 -

Name	Title	Name or Representative	Shares Held
			Shares	Percentage
	Supervisor	Chi-chou Chang (these four people are all representatives of Guanze Co.,Ltd.)
Samoa Smart & Diligent Co., Ltd.	Director Director	Jian-ming Xie Joseph Wang(Representative of SINBON Electronics)	US$3.14 million	51.51%
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$1.4 million	100.00%
Ray Service AVA Co., Ltd.	Chairman Director Director Supervisor	Wei-ming Liang(Representative of SINBON Electronics) Han Tao(Representative of SINBON Electronics) Petr Gabriel (Representative of Ray Service a. s.) Chi-chou Chang	NT$30 million	90.00%
T-CONN Precision Corporation	Chairman Director Director Supervisor	Xin-chi Yeh Joseph Wang Jun-qiang Wang Chi-chou Chang (these four people are all representatives of Super Elite Ltd)	NT$6.45 million	64.48%
Super Elite Limited	Chairman Director Director Director Director	Xin-chi Yeh Joseph Wang Chi-chou Chang (these four people are all representatives of SINBON Electronics) Jun-qiang Wang (representative of Wistron Corporation) Fu-qian Lin (representative of Wistron Corporation)	US$6.53 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$4.58 million	64.48%
Super Progressive Limited	Chairman	Xin-chi Yeh (representative of Super Elite Ltd)	US$64,480	64.48%
Hong Kong Comteck Electronics Co., Ltd.	Director	Joseph Wang, Xin-chi Yeh, Chi-chou Chang (all are representatives of SINBON Electronics)	US$2.08 million	64.48%
SINBON Europe GmbH	Chairman	Wen-sang Huang(representatives of SINBON Electronics)	EUR1.68 million	100%

• 201 -

(5) Operational performance of affiliates (2015)

	(5) Operati	onalperfor	mance of a	ffiliates(20	15)
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	127,971,676	2,236,196	125,735,480	0	(6,781,612)	1,134,951	-
SINBON Hong Kong (Contact Office) (HKD))	95,606,400	264,982,861	122,738,552	142,244,309	439,446,753	41,049,437	49,098,870	-
SINBON Shanghai (Sales Office) (RMB/CNY)	25,401,762	60,195,626	13,792,386	46,403,240	77,180,466	(240,080)	(70,685)	-
Sinbon International Enterprise Company Limited (USD)	48,181,715	99,813,225	2,150,000	97,663,225	0	(2,150,000)	8,360,828	-
SINBON Jiangyin (Factory) (RMB/CNY)	241,032,010	674,159,784	199,980,919	474,178,865	821,325,916	67,166,215	55,232,825	-
SINBON Shenzhen (Sales Office) (RMB/CNY)	17,924,155	82,447,023	18,224,236	64,222,787	68,656,830	6,195,847	4,366,761	-
Sinbon Technologies,L. L.C (USD)	200	747,654	734,056	13,598	4,392,350	150,078	150,078	-
SINBON Japan (Sales Office) (JPY)	25,000,000	203,441,817	162,081,957	41,359,860	440,823,569	8,436,381	5,953,753	-
Guanze Co., Ltd. (TWD)	235,600,000	262,614,941	840,612	261,774,329	0	(126,749)	(38,003,073)	-
SINBON Tongcheng (Factory) (RMB/CNY)	42,826,700	78,150,448	20,752,084	57,398,364	63,054,633	3,358,632	3,757,875	-
SINBON Tongan Electronics Beijing (RMB/CNY)	18,513,390	252,143,271	140,175,779	111,967,492	408,134,515	80,791,673	58,333,371	-
Sinbon USA LLC. (USD)	1,400,000	1,399,794	65,737	1,334,057	342,579	(81,247)	(46,598)	-
Ray Service AVA Co., Ltd. (TWD)	30,000,000	30,002,952	0	30,002,952	0	0	2,952	-
T-CONN	10,000,000	216,296,006	210,212,669	6,083,337	480,819,394	(13,029,047)	(13,370,412)	-

• 202 -

Name	Authorized Capital	Total Assets	Total Liabilities	Net Worth	Operating Revenue	Operating Income	Current P/L (after tax)	EPS (after tax)
Precision Corporation (TWD)
Super Elite Limited (USD)	10,127,247	5,207,233	2,761,234	2,445,999	0	(5,752)	(1,317,621)	-
T-CONN Precision (Zhongshan) Corporation (RMB/CNY)	54,268,753	37,488,060	44,693,894	(7,205,834)	62,312,942	(3,964,333)	(5,534,256)	-
Super Progressive Limited (USD)	100,000	4,840,910	2,790,477	2,050,433	8,677,777	(11,000)	(12,578)	-
DigiO2 International Ltd. (TWD)	100,000,000	23,619,855	14,491,914	11,127,941	21,238,179	(64,207,938)	(59,772,694)	-
Samoa Smart & Diligent Co., Ltd. (USD)	6,103,014	730,128	69,764	660,364	0	0	0	-
Worldwide Wire Harnesses Co., Ltd. (USD)	150,000	432,731	65	432,666	(232,000)	(232,000)	71,714	-
SINBON Technologies Tennessee Co., LLC. (USD)	139,980	1,129,133	947,611	181,522	1,669,374	71,939	71,703	-
Hong Kong Comteck Electronics Co., Ltd. (HKD)	35,980,818	12,792,653	0	12,792,653	0	0	0	-
SINBON Europe GmbH (EUR)	1,683,773	1,683,773	0	1,683,773	0	0	0	-

• 203 -

8.1.2. Consolidated financial statement of subsidiaries

Statement of Compliance

Our consolidated financial statement for 2015 (period:January 1, 2015 to December 31, 2015), 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: March 11, 2016

• 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.

9. 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.

• 204 -