SINBON Electronics — Annual Report 2020

Jul 21, 2020

Taiwan Stock Exchange Code: 3023

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SINBON Electronics Co., Ltd.

Annual Report 2019

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 the Chinese version, the Chinese version shall prevail.

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

Printed on April 30, 2020

1. Spokesperson and acting spokesperson

(1) Spokesperson Name: Matthew Chang Title: Director Phone: (02) 2698-9999 E-mail: Matthew@sinbon.com (2) Deputy Spokesperson

Name: Irene Chiu Title: Section manager Phone: (02) 2698-9999 E-mail: IreneChiu@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: Tzu-Ping Huang and Ming-Hung Chen 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 2019	2
	1.2. Summary of Business Plan in 2020	2
	1.3. Effect of External Competitions, Legislation, and the Overall Business	3
	Environment
	1.4. Future Development Strategy	4
2.	Company Profile
	2.1. Establishment Date	5
	2.2. Milestones	5
3.	Corporate Governance
	3.1. Organization	6
	3.2. Information of Directors, Supervisors, President, Vice Presidents,
	Assistant Vice Presidents, and Department and Subsidiary Managers	8
	3.3. Remunerations Paid to Directors, President, and Vice Presidents Last	19
	Year
	3.4. Corporate Governance	23
	3.5. Accountant Service Fees	42
	3.6. CPA Change Information	44
	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.	44
	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.	45
	3.9. Information of Top Ten Shareholders Who Are Interested Parties,
	Spouse, Relatives within Second Degree	47
	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	48
4.	Fundraising
	4.1. Capital and Shares	49
	4.2. Corporate Bonds	55
	4.3. Issue of Preferred Shares	56
	4.4. Issue of GDR	56
	4.5. Issue of Certificates of Employee Stock Subscription	56
	4.6. Issue of Employee Restricted Shares	56
	4.7. Acquisition (including mergers, buyouts, and spin-offs)	56
	4.8. Items to be Disclosed in Capital Utilization Plans	56
5.	Operational Highlights
	5.1. Business Activities	57
	5.2. Market and Production-Sales	69

	5.3.	Number, Average Service Length, Average Age, and Education
		Distribution of Employees in Last Two Years and by Report Publishing
		Date	71
	5.4.	Environmental Expenses	72
	5.5.	Labour-Management Relations	72
	5.6.	Material Contracts	74
6.	Financial Highlights
	6.1.	Condensed Balance Sheet, Integrated Income Statement, CPA Name	75
		and Comments
	6.2.	Financial Analysis of the Last Five Years	79
	6.3.	Supervisor or Auditor Audit Report of Financial Statements in the Last
		Year	81
	6.4.	Financial Statements in the Last Year (including CPA audit reports, a
		cross-reference of balance sheets of two years, integrated income
		statements, equipment change list, case flows list, and remarks or
		tables)	82
	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	321
7.	Review and Analysis of Financial Situation and Financial Performance and Risk
	Items
	7.1.	Financial Situation	322
	7.2.	Financial Performance	322
	7.3.	Cash Flows	323
	7.4.	Impact of Major Capital Expenses on Finance in Recent Years	323
	7.5.	Re-investment Policies and Major Causes of Profits or Losses in Recent
		Years, Improvement Plans, and Investment Plans in the Coming Year	324
	7.6.	Risk Items	324
	7.7.	Other Major Items	326
8.	Special Notes
	8.1.	Information of affiliates	327
	8.2.	Private placement of securities in the last year and by the report
		publishing date	335
	8.3.	Holding or settling corporate stocks in the last year and by the report
		publishing date	335
	8.4.	Other supplementations	335
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		335

1. Letter to Shareholders

1.1. Business Performance in 2019

1.1.1. Performance of business plan 2019

The business performance of SINBON Electronics in 2019 was as follows: Parent company's net operating income was NT$4,899,284 thousand; gross profit rate was 26%; operating net profit was NT$313,250 thousand; net profit after tax was NT$1,718,511 thousand; and EPS after tax was NT$7.47. The consolidated net operating income was NT$17,886,170 thousand; consolidated gross profit rate was 26%, consolidated net operating profit was $ 1,892,758 thousand; consolidated net profit after tax was NT$1,677,851 thousand, less the non-controlling interest (the interest of other shareholders of re-invested enterprises with non-controlling ownership) was -NT$40,660 thousand, the sum was NT$1,718,511 thousand; and consolidated EPS after tax was NT$7.47.

1.1.2. Budget execution

• Compared to the business plan of 2019, the revenue completion rate was 95.4%; the gross profit completion rate was 98.49%; the operating income completion rate was 93.48%; net profit after tax completion rate was 109.07%. The actual number is broadly in line with the Budget.

• 1.1.3. Revenue and profitability analysis

Revenue andprofitabilityanalysis
Item	2018	2019
Cash from operatingactivities(NT$1,000)	343,590	1,694,697
Cash from(used in)investingactivities(NT$1,000)	(134,716)	(338,019)
Cash used in financingactivities(NT$1,000)	(635,743)	(227,689)
Return on assets(%)	10.53	10.00
Return on equity (%)	20.95	22.86
Profit Before Tax to Capital Stock(%)	84.70	93.29
Profit Margin(%)	8.77	9.61
EPS(NT$)	6.26	7.47

• The cash provided by operating activities was 393% more than in 2018 because account receivable was decreased in 2019, thus increasing cash generated from operations.

• Cash outflows in investing activities were increased by 151% in 2019 because of an increase in acquisition of property, plant and equipment.

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• Cash outflows in financing activities were decreased by 64% in 2019 because of an increase in short-term loans.

• 1.1.4. Research and development

Year	Results of R&D
2013~2014	SINBON won a gold prize from iF Design Award 2013 for our latest Brezze® Nebulizer, a portable drug nebulizer developed by DigiO2 International Co., Ltd. (our re-invested enterprise) in collaboration with the NTUH Telehealth Center under the Telecare Service Project.
2015~2016	1. Tablet PC for Shun Feng logistics development to DVT stage. 2. Solar monitoring system developed to the DVT stage. 3. Finished development EV charger、charging gun and AC charging pile.
2017~2018	1. Wisdom medicine cabinet control lines, and adjustable window light control lines. 2. Robotic arm control lines, electronic fireplace, and smart grid assembly.
2018~Now	1. The sensor in wearable airbag hip protector and smart water heater. 2. AIOT (Artificial Intelligence of Things) and IoT application system.

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

1.2. Summary of Business Plan in 2020

• 1.2.1. The business policy of 2020

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

• (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.

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• (3) Expansion of the scope of operations of electronic parts and components through strategic alliances and acquisitions.

Provision of vertical Integration services: Apart from actively developing new products and providing professional engineering services, through organizational reform and IT system integration, we aim to integrate the resources of all oversea enterprises to maximize their efficiency.

• 1.2.2. Major production-marketing policies:

• (1) Strategic alliance or acquisition

  • To deal with rapid industrial changes and achieve quick expansion through strategic alliances or 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 high-voltage cables for electric vehicles; aviation/ navigation/vehicular GPS parts and components; portable physiological signal devices, X-ray machines, magnetic resonance imaging (MRI) machines, bone mineral density (BMD) testers, and wind turbines. We also actively engaged in the development of electronic parts and components for industrial controllers, industrial PCs, electronic medical devices, PV generators, wind power generators and aviation components.

• (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, robotic arms, AGV robot, unmanned stores, EV charging module, IoT module, E-bike, drone and smart grids for use on the IoT, so as to enter the special the electronic parts and components field.

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

• Thanks to successful organizational transformation, we successfully entered MAGIC industries to gradually transform from consumer products toward industrial application products. While raising revenue in these years, our profits also grow continuously. SINBON has established 6 production sites around the world. To cope with the impact of the China-US trade war, it also expanded production investments in the United States and Europe, in addition to the

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expansion of the new plant in Miaoli in 2018. The US factory integrates the core technologies in customized production to cope with the local trends. European locations are focusing on developing the business scope and a new factory in Hungary and a UK branch are established to take up more of the European market share.

1.4. Future Development Strategy

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

• 1.4.2. 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.

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

SINBON will continue to commit to good corporate governance, sustainability, and good returns to our shareholders. SINBON thank you for your trust and commitment to us and look forward to a long and profitable future together.

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. 2018 The board resolved that acquisition 10% shares of Ray Service AVA Co., Ltd., capital reduction and then increase of Ray Service AVA Co., Ltd, disposal shares of SINBON Japan, and capital increase US$ 8 million to SINBON Tongcheng.

• Apr. 2018 The board resolved that subsidiary company T-CONN Precision Corporation increases capital by surplus NT$14.4 million and SINBON Jiangyin increases capital by surplus US$6 million.

• July. 2018 The board resolved that set up a new branch in the UK, SINBON ELECTRONICS CO., LTD UK BRANCH, the subsidiary company, Enmagic Jiangsu Energy Co., Ltd., set up the new subsidiary company, Enmagic Kunshan Energy Technology Co., Ltd., the project of the subsidiary company Beijing SINBON Tongan change the company type,and the Investment structure change of the subsidiary company between Beijing SINBON Tongan and Beijing SINBON.

• Oct. 2018 The board resolved that the capital increase for the subsidiary company, T-conn Precision Co., Ltd. and the subsidiary company, Beijing SINBON Tongan’s Retained Earnings transferred to Capital.

• Nov. 2018 The board resolved that adjustment of the company's investment structure in Europe, dispose of Japan SINBON Electronics Co., Ltd. Shares, investment of the private placement of common shares of Nextronics Engineering Corp., and surplus USD$1.1million to a capital increase for the subsidiary company, SINBON USA

• July. 2019 The board resolved that the subsidiary company, Beijing SINBON Tongan Co., Ltd. set up the new subsidiary company, Enmagic Renewable Energy Co., Ltd. in Taiwan.

• Oct. 2019 The board resolved that the subsidiary company, Beijing SINBON Tongan Co., Ltd. set up the new subsidiary company, SINBON TongAn Renewable Energy ApS in Denmark and the capital increase NT$50.38 million and EUR$3.565 million for the subsidiary company, T-conn Precision Co., Ltd. and SINBON Holding GmbH. respectively.

• 2.2.2. Mass transfer or replacement of shares of directors, supervisors, or shareholders holding over 10% of shares: None.

• 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 20, 2020, the board resolved that the distribution of cash dividends at NT$5.30/share. The proposal will be submitted to the shareholders’ meeting for recognition on June 12, 2020.

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3. Corporate Governance

3.1. Organization

3.1.1. The organizational structure of SINBON

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Shareholders’ Meeting
Board of Directors Audit Committee
Auditing Remuneration
Office Committee
Chairman &
CEO Business Decision
Making Team
CEO Vice Chairman President
Legal Affairs
Finance Operation
Management HR Development Business
Center
Strategy
HR Service Global Sales
Marketing
Center
Management
QAMS Center
Information
System
Site
Administration
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3.1.2. Functions and duties of major departments

Department and Supervisor	Functions and Duties
Business Decision-Making Team Joseph Wang(Chairman & CEO), Xin-Chi Yeh(Vice Chairman), Wei-Ming Liang(President), Wen-Sen Huang(VP), Jun-Yu Chen(VP), Chi-Chou Chang(Director),	(1) Implement the instructions and material management issues from BOD. (2) Proposal for group business objectives and strategic directions. (3) Proposal of group major cooperation and investment cases, capital expenditures, dividend policy. (4) Proposal of internal control, audit-related, risk management issues. (5) Proposal of conflicts of interest, major employee complaints, fraud cases. (6) Proposal for appointment of important personnel. (7) Responsibility for performing corporate social responsibility and maintainingcorporate culture.
Chairman & CEO Joseph Wang	(1) Promote various policies and implement assignments assigned by the board and be accountable for the organization’s business performance. (2) Concurrent management of finance, strategy & marketing, and performance evaluation functions.

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Department and Supervisor	Functions and Duties
Headquarters office Xin-Chi Yeh(Vice Chairman) Jun-Yu Chen(VP)	In charge of group HR, administration, MIS, and legal functions.
President Wei-MingLiang	In charge of product manufacture, sales, and R&D functions.
Auditing Office Hui-Jun Li (Associate Manager) (5 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.
Finance Management Chi-Chou Chang (Director)	(1) Take charge of accounting and cashier affairs. (2) Provide relevant units and higher management with relevant financial management information for the reference for decision making. (3) Direct organizational budgeting. (4) Operate and assess overseas re-invested enterprises. (5) Make financial planning for various projects. (6) Plan board meeting and shareholders’ meeting affairs, publish external information, and operate investor relations and serve as the investor contact window.
Strategy Marketing Li-Li Huang (Director)	(1) Industry research and analysis. (2) Assess and research new business and products. (3) Make overall marketingstrategies.
Legal Yun-Ru Huang (Director)	(1) Plan and handle legal affairs. (2) Manage andprotect intellectualproperty.
HR Development Center Cheng-Ling Li (Director) HR Service Center San Li(Manager)	(1) Make and implement human resources planning. (2) The survey, plan and implement organizational training needs. (3) Implement wage management.
Management Information System Yang Yu Wu (Senior Manager)	(1) Install, maintain, and manage IT equipment (hardware and software). (2) Promote computerization within the organization. (3) Provide IT management reports for individual departments.
Group Site Administration Kui-Zhen Feng (Associate Director)	(1) In charge of group administration function. (2) Communicate and coordinate with relative departments.
Operation Business Wei-Ming Liang (Concurrently taking up by President)	In charge of domestic sales activities.
Global Sales Group Wen-Sen Huang (VP)	In charge of global sales activities.
QAMS Center Ping Li (Director)	Integration of the Group’s quality assurance, manufacturing, and engineering resources.

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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 (including Independent directors)

Information on Directors and Independent directors (I)

																	(April 14,2020)	(April 14,2020)	(April 14,2020)	(April 14,2020)
Title1	Nationality or Residency	Name	Gender	Elected (Inauguration) Date	Term (yrs.)	Initially Elected Date2	Shares Held When Elected/Inaugurated		Shares Currently Held		Shares Currently Held by Spouse/Minor Children		Shares Held Under Other’s Name		Major Experience (Education)3	Position(s) Concurrently Held in this and other Organizations	Spouse/2ndDegree Relatives Holding Officer/Director/ Supervisor Post of this Organization.			Note4
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Chairman	ROC	Joseph Wang	M	Jun 08, 2018	3	Dec 6, 1989	4,508,062	2.00%	7,508,062	3.23%	2,131,236	0.92%	0	0%	EMBA, Fudan University. BA in Mathematics, Tamkang University. Sales Management, AMP of USA. Sales Manager, Kanagawa of Japan	5	Director	Wei-Chun Wang	Father and son	-
Director	ROC	Xin-Chi Yeh	M	Jun 08, 2018	3	Nov 4, 1997	1,707,373	0.76%	1,707,373	0.75%	500,000	0.22%	0	0%	EMBA, Fudan University. BS in Agricultural Machinery, National Taiwan University. President, T&B of USA.	6	N/A	N/A	N/A	-
Director	ROC	Wei-Ming Liang	M	Jun 08, 2018	3	May 6, 2005	1,015,523	0.45%	1,015,523	0.44%	0	0%	0	0%	IE & MBA, University of Iowa. BS in Industrial Engineering, Tunghai University. VP, Starconn Electronic Co.,Ltd.	7	N/A	N/A	N/A	-
Director	ROC	Cao-Liang Wang, rep of Argosy Research Inc.	M	Jun 08, 2018	3	May 16, 1998	3,806,421	1.69%	3,806,421	1.64%	311,388 (Shares held by Cao-liang Wang)	0.13%	0	0%	BA in Power Mechanical Engineering, National Tsing Hua University. Chairman, Argosy Research Inc.	8	N/A	N/A	N/A	-
Director	ROC	Wei-Chun Wang, rep of Tai-Yi Investmen t Co., Ltd.	M	Jun 08, 2018	3	May 6, 2005	4,130,572	1.83%	4,130,572	1.78%	1,159,158 (Shares held by Wei-Chun Wang)	0.50%	628,812 (Shares held by Wang’s wife and children)	0.27%	Chengchi University MBA Manager, Top Taiwan Investment & Development	Chairman, Tai-Yi Investment. Senior Manager, Top Taiwan Investment & Development	Chairman	Joseph Wang	Father and son	-

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Title1	Nationality or Residency	Name	Gender	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.	Note4
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Director	ROC	Kuo-Hong Wang, rep of Kuo-Shian Investmen t Co., Ltd.	M	Jun 08, 2018	3	Jun 11, 2015	2,415,539	1.07%	2,415,539	1.04%	105,022 (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. Supervisor, Tang-Juan Company	N/A	N/A	N/A	-
Director	ROC	Min-Cheng Lin9	M	Jun 06, 2019	3	April 12, 2001	3,000	0%	-	-	0	0%	0	0%	Bachelor degree of National Cheng Kung University Director of Lee-Yu & CO., CPA	Director of Lee-Yu & CO., CPA Director of Lee-Yu Business Management Inc. Supervisor, Ledtech Electronics Co.,Ltd. Supervisor, Argosy Research Inc. Supervisor, Radbon Avionics Inc.	N/A	N/A	N/A	-
Director	ROC	Te-Cheng Chiu	M	Jun 06, 2019	3	Jun 18, 2002	100,000	0%	100,000	0.04%	0	0%	0	0%	Vice chairman of Taiwan Life Insurance Co., Ltd. Chairman of Taiwan Private Equity Association	10	N/A	N/A	N/A	-
Independent director	ROC	Chi-Lin Wei	M	Jun 08, 2018	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	11	N/A	N/A	N/A	-

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Title1	Nationality or Residency	Name	Gender	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.	Note4
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Independent director	ROC	Ho-Min Chen	M	Jun 06, 2019	3	Jun 6, 2019	0	0%	0	0%	0	0%	0	0%	Professor of National Taiwan University Dean of Commerce Development Research Institute Dean of the College of Management ,Natio nal Chung Hsing University Chairperson of Dept. of Business Administration, National Chung HsingUniversity	Professor of National Taiwan University Independent director, ELAN Microelectronics Independent director, Fulltech Fiber Glass Corp. Director of ROO HSING Co., Ltd.	N/A	N/A	N/A	-
Independent director	ROC	Zheng-Yan Chang	M	Jun 08, 2018	3	Jun 08, 2018	0	0%	0	0%	0	0%	0	0%	Clinical researcher of Paris Descartes University. National Defense Medical Center. Supervisor of Radiologicl Society of North America. Director of Radiology Department, Taipei Veterans General Hospital	Chief Consultant, Tzu Chi Medical Imaging Department Professor Consultant Physician, Taipei Veterans General Hospital Professor of National Yang-Ming University Clinical Professor of National Defense Medical Center Professional Consultant, CTCI Corporation	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.

• 4 When the Company’s Chairman and the President or equivalent (the highest ranked managerial officer) are the same person, or relatives such as spouses or the first degree of kinship, the information such as the reason, reasonableness, necessity and response measures (For example, increasing the number of independent directors, and having more than half of the directors who do not serve concurrently as employees or managerial officers, etc.) should be provided.

5Chairman 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 Kwan-Ze, chairman of SINBON International (representative of the Company), chairman of Japan SINBON (representative of the Company), director of Argosy Technology (representative of the Company), chairman of Top Taiwan IV Venture Capital (representative of the Company), chairman of Top Taiwan III Venture Capital (representative of the Company), director of Top Taiwan II Venture Capital (representative of the Company), director of Top Taiwan VII Venture Capital (representative of the Company), director of Top Taiwan Venture Capital (representative of the Company), director of Top Taiwan XII Venture Capital (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 Progressive Ltd. (representative of the Company), director of Beijing SINBON Tongan Electronics (representative of the Company) , and director of Enmagic Renewable Energy Co., Ltd. (representative of the Company).

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6Director of Kwan-Ze (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 Progressive Ltd. (representative of the Company).

7Director of Worldwide Wire Harnesses Ltd. (representative of the Company), chairman of SINBON Tongcheng (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 Beijing SINBON Tongan (representative of the Company), director of SINBON Shenzhen (representative of the Company), director of SINBON Shanghai (representative of the Company), chairman of Jiangsu Yingmai Energy Technology Co., Ltd. (representative of the Company) , director of Kunshan Yingmai Energy Technology Co., Ltd. (representative of the Company), Independent director of Flytech Technology Co., Ltd. , and director of Enmagic Renewable Energy Co., Ltd. (representative of the Company).

8Chairman 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 III Venture Capital (representative of the Company),and director of Top Taiwan V Venture Capital (representative of the Company) , Supervisor of Top Taiwan XII Venture Capital. 9Resigned on January 7, 2020.

10 Chairman / President of Top Taiwan, Top Taiwan IX, Top Taiwan III, Top Taiwan X, Top Taiwan XI, and Top Taiwan XII Venture Capital; Chairman / President of Top Taiwan Financial Consulting, President of Top Taiwan II, Top Taiwan IV, Top Taiwan V, Top Taiwan VI, Top Taiwan VII, and Top Taiwan VIII Venture Capital; Independent Director of Silitech Technology and Chicony Power Technology; Corporate representative of ShareHope Medicine and AMICCOM Electronic; Director of ELAN Microelectronics and AVATACK; Director of Radbon Avionics Inc. (representative of SINBON Electronics).

11Chairman of Top Taiwan VI Venture Investment, independent director of Inventec Besta, independent director of Formosa Plastics, director of AcBel Polytech Inc., director of ELAN Microelectronics, and chairman of Waterland Financial Holdings, supervisor of Radium Life Tech Company, supervisor of Aces Electronics, director of Nuvoton Technology Corporation, director of Taiwan Secom Co. , Ltd.

Table 1: Major Shareholder of the Company

	Table 1: Major Shareholder of the Company
	(April 14,2020)
Name of The Company1	Major Shareholders of the Company2
Argosy Research Inc.	Kwan-Ze Co., Ltd. (17.81%), Cao-Liang Wang (7.01%), Fubon Life Insurance Co., Ltd. (5.00%), SINBON Electronics (3.59%), Shu-Zhen Chen (3.22%), Prudential Financial Maxime Fund (1.85%), Yi-Ben Yuan (1.69%), Sheng-wen Wang (1.64%), UPAMC GREAT CHINA Fund (1.19%), Yue-Ning Wang (1.12%).
Tai-Yi Investment Co., Ltd.	Zhen-Chun Wang (29.42%), Wei-Chun Wang (29.39%), Xin-Chi Yeh(8.80%), Wei-Ming Liang(8.19%), Jun-Qiang Wang(8.00%), Chao-Yeh Wang(6.65%), Mu-Xiao Liu(4.72%), Huang-Ji Lin (1.92%), Chi-Chou Chang (1.78%), Pei-Wen Hu(0.57%),
Kuo-Shian Investment Co., Ltd.	Kuo-Hong Wang(33.33%), Xing-hui Liu(33.33%), Xiang Wang(33.33%)

1Directors and supervisors who are representatives of the companies must fill in the name of the companies 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 company, continue with Table 2.

3If the legal person shareholder is not a company or organization, the aforementioned name of the shareholder and shareholding ratio that should be disclosed is the name of the capital contributor or sponsor and the contribution or sponsoring ratio.

• 11 -

Table 2: Major Shareholders of Major the Company in Table 1

Table 2:	Major Shareholders of Major the Company in Table 1
	(April 14,2020)
Name of the Company in Table 11	Major Shareholders of the Company2
Kwan-Ze Co., Ltd.	SINBON Electronics (100%)
Fubon Life Insurance Co., Ltd.	Fubon Financial Holding Co., Ltd. (100%)
SINBON Electronics Co., Ltd.	Fubon Life Insurance Co., Ltd. (5.89%), Aberdeen Standard OEIC II- ASI Global Smaller Companies Fund (3.33%), Deutsche Bank Deutsche Bank Taipei Branch entrusted with the Brei Global Fund - Berri Asia Japan Excluding Small Companies Equity Funds (3.29%), Joseph Wang (3.23%), Swedbank Robur Globalfond (2.19%), Columbia Acorn Trust - Columbia Acorn International (1.88%)、Tai-Yi Investment Co., Ltd. (1.77%), Liu,Bo-Wen (1.77%), JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds (1.73%), Cathay Life Insurance Company, Ltd. (1.70%).
Prudential Financial Maxime Fund	N/A
UPAMC GREAT CHINA Fund	N/A

1Table 1: Fill in the corporation name for the company.

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

• 12 -

Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)	Information of Directors and Supervisors(II)
Requirements Name1	Do independent directors have over 5 years of relevant experience and the following professional qualifications?			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	11	12
Joseph Wang	No	No	Yes													0
Xin-Chi Yeh	No	No	Yes													0
Cao-Liang Wang, representative of ArgosyResearch	No	No	Yes													0
Wei-Ming Liang	No	No	Yes													1
Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.	No	No	Yes													0
Chi-Lin Wei	Yes	No	Yes													2
Ho-Min Chen	Yes	No	Yes													2
Zheng-Yan Chang	Yes	Yes	Yes													0
Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd.	No	No	Yes													0
Min-Cheng Lin3	No	Yes	Yes													0
Te-Cheng Chiu	No	No	Yes													1

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;

• 13 -

• (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) Not involved in any of the circumstances specified under article 30 of the Corporate Law.

• (12) Not nominated as a governmental or institutional shareholder, or as the representative as stipulated under article 27 of the Corporate Law.

• 3Resigned on January 7, 2020.

• 14 -

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

												(April 14,2020)	(April 14,2020)	(April 14,2020)
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.			Title3
				Shares	%	Shares	%	Shares	%			Title	Name	Relationship
President	ROC	Wei-Ming Liang	Jan 5, 1998	1,051,523	0.45%	0	0%	0	0%	IE & MBA, University of Iowa. BS in Industrial Engineering, Tunghai University. VP,Starconn Electronic Co.,Ltd.	4	N/A	N/A	N/A	-
Vice President	ROC	Wen-Sen Huang	Feb11, 1998	230,602	0.10%	0	0%	0	0%	Dip. in Industrial Design, National Taipei Institute of Science and Technology. Marketing Chief, AMP MarketingManager,IR-TEC International.	5	N/A	N/A	N/A	-
Vice President	ROC	Jun-Yu Chen	Apr 20, 2018	57,712	0.03%	0	0%	0	0%	LLM, Law School, Fudan University. HR and Sales Manager, Tsankuen Shanghai. Director, Administration Division, Want Want Holdings Limited	In charge of SINBON USA LLC Director of SINBON C&C (representative of the Company)	N/A	N/A	N/A	-
Director	ROC	Ping Li	Oct 1, 1996	101,220	0.04%	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	Jia-Zhi Hsu	Nov 1, 2000	26,166	0.01%	457	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	Li-Li Huang	Apr 21, 1997	930	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/ Accounting Officer	ROC	Chi-Chou Chang	Oct 1, 2000	225,389	0.10%	264,124	0.12%	0	0%	MBA, National Chung Hsing University BA in Accounting, Chung Yuan Christian University. Associate Manager,Diwan & Company	6	N/A	N/A	N/A	-
Director	ROC	Jun-Qiang Wang	Oct 1, 2014	160,000	0.07%	160,000	0.07%	0	0%	MBA, Rutgers University. BS in Industrial Engineering, Tunghai University. Capital Market Assistant Manager, Taiwan Securities	7	N/A	N/A	N/A	-

• 15 -

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.	Title3
				Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Director	ROC	Cheng-Ling Li	Sep 1, 2014	0	0.00%	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	-
Director	ROC	Xiu-Sui Lin	Sep 1, 2014	30,403	0.01%	0	0%	0	0%	Ging Chung Business College	Director of SZ SINBON (representative of the Company) Director of SINBON Shanghai (representative of the Company)	N/A	N/A	N/A	-
Director	ROC	Yun-Ru Huang	Sep 1, 2014	0	0.00%	62	0.00%	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	-
Director	ROC	Xin-Chun Wu	Oct 1, 2014	2,864	0.00%	0	0%	0	0%	BA in Spanish, Tamkang University	Director of JY SINBON (representative of the Company)	N/A	N/A	N/A	-
Director	ROC	Hao-Min Hsu	Oct 1, 2014	78	0.00%	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	-
Director	ROC	Jin-Zong Huang	Sep 01, 2018	0	0.00%	0	0%	0	0%	Chief Operating Officer ofGolden Bridge Electech Inc.	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Jin-Ze Zheng	Sep 1, 2014	0	0.00%	0	0%	0	0%	BA in Political Science, Soochow University. VP,KeyMouse Electronic	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Bing-Chen Song	Oct 1, 2014	1,689	0.00%	0	0%	0	0%	Ping Tung College of Technology Sales Manager,Wieson Technologies	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Min-Zheng Lin	Jun 1, 2015	588	0.00%	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	-

• 16 -

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.	Title3
				Shares	%	Shares	%	Shares	%			Title	Name	Relationship
Ass. Director	ROC	Jia-Qing Lin	Apr 18, 2016	9,202	0.00%	0	0%	0	0%	Electronic Engineering, China University of Science and Technology	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Ya-Hui Guo	Apr 18, 2016	0	0.00%	0	0%	0	0%	National Taiwan University of Science and Technology / Department of Business Administration	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Kui-Zhen Feng	Apr 09, 2018	0	0.00%	4,000	0%	0	0%	Department of Slavic Languages and Literatures, National Chengchi University Operations manager of Holistic Music Culture Enterprise Co., Ltd. Administration Supervisor. of Ju Culture Enterprise Co.,Ltd.	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Pin-Jen Chen	Apr 09, 2018	7,000	0.00%	0	0%	0	0%	Dept. of Sport Management, Aletheia University Sales Supervisor of T-CONN Precision Corporation	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Chien-Ming Huang	Apr 09, 2018	0	0.00%	0	0%	0	0%	Department of Electronic Engineering, Fu-Hsin Trade & Arts School	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Hsing-Hsiu Kuo	Apr 10, 2018	6,262	0.00%	100	0%	0	0%	Master degree, Department of Applied Foreign Languages,National Yunlin Universityof Science and Technology	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Kuo-Hung Chen	Oct 29, 2018	0	0.00%	0	0%	0	0%	Department of Mechanical Engineering, National Taiwan University of Science and Technology Ass. Director of Consumer Products Division,Lorom Industrial Co. Ltd.	N/A	N/A	N/A	N/A	-
Ass. Director	ROC	Bing-Chen Fu	Jun 3, 2019	0	0.00%	5,000	0.00%	0	0.00%	Stratford University, MBA. PM, LITE-ON Technology	N/A	N/A	N/A	N/A	-
Director	ROC	Yu-Shan Su	Nov 14, 2019	1,000	0.00%	0	0.00%	0	0.00%	MBA, National Taiwan University BA in Business Administration, National Taiwan University President, International SOS-Taiwan branch President, Future Taiwan Advanced Electronics Pte Ltd.	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.

• 17 -

3 When the company’s President or equivalent (the highest ranked managerial officer) and the Chairman are the same person, or relatives such as spouses or the first degree of kinship, the information such as the reason, reasonableness, necessity and response measures (For example, increasing the number of independent directors, and having more than half of the directors who do not serve concurrently as employees or managerial officer, etc.) should be provided.

4 Director of Worldwide Wire Harnesses Ltd. (representative of the Company), chairman of SINBON Tongcheng (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 Beijing SINBON Tongan (representative of the Company), director of SINBON Shenzhen (representative of the Company), director of SINBON Shanghai (representative of the Company), chairman of Jiangsu Yingmai Energy Technology Co., Ltd. (representative of the Company) , director of Kunshan Yingmai Energy Technology Co., Ltd. (representative of the Company), Independent director of Flytech Technology Co., Ltd. , and director of Enmagic Renewable Energy Co., Ltd. (representative of the Company).

5 Director of SINBON Europe GmbH(representative of the Company), Director 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)

6Director of SINBON Hong Kong (representative of the Company), supervisor of SINBON Shenzhen (representative of the Company), supervisor of SINBON Shanghai (representative of the Company), director of Kwan-Ze (representative of the Company), supervisor of T-CONN (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), director of Jiangsu Yingmai Energy Technology Co., Ltd.

(representative of the Company)

7Supervisor of Kwan-Ze, Supervisor of T-CONN Precision, Director of T-CONN Precision Zhongshan (representative of the Company), and Director of Enmagic Jiangsu Energy Co., Ltd (representative of the Company), director of SINBON Beijing (representative of the Company) , director of Beijing SINBON Tongan (representative of the Company), chairman of Kunshan Yingmai Energy Technology Co., and director of Enmagic Renewable Energy Co., Ltd. (representative of the Company).

• 18 -

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

3.3.1. Directors (including independent directors)

												(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)	(December 31,2019; Expressed in Thousands of NTD)
Title	Name	Remuneration paid to directors								The proportion of the sum of items A-D in net profit after tax10		Compensation earned by directors holding concurrent posts at SINBON or affiliates								The proportion of the sum of items A-G in net profit after tax10		Compensation Paid to Directors from Non-consolidated Affiliates11
		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
		From SINBON	From All Consolidated Entities7	From SINBON	From All Consolidated Entities7	From SINBON	From All Consolidated Entities7	From SINBON	From All Consolidated Entities7	From SINBON	From All Consolidated Entities7	From SINBON	From All Consolidated Entities7	From SINBON	From All Consolidated Entities7	From SINBON		From All Consolidated Entities8		From SINBON	From All Consolidated Entities7
																Cash	Stock (Fair Market Value)	Cash	Stock (Fair Market Value)
Chairman	Joseph Wang	-	-	--	-	13,950	13,950	1,480	1,480	0.89	0.89	2,367	2,885	-	-	8,780	-	8,780	-	1.75	1.78	-
Director	Wei-MingLiang
Director	Xin-Chi Yeh
Director	Cao-Liang Wang, rep of Argosy Research
Director	Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.
Director	Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd.
Director	Te-Cheng Chiu
Director	Min-ChengLin
Independent Director	Chi-Lin Wei	-	-	--	-	3,400	3,400	220	220	0.21	0.21	-	-	-	-	-	-	-	-	-	-	-
Independent Director	Ho-Min Chen
Independent Director	Zheng-Yan Chang
* Please state the policy, system, standards and structure of independent directors ’remuneration payment, and describe the relevance to the amount of remuneration, responsibilities, risks, time invested and other factors: * In addition to the above table,the otherpayments to the directors of the Companyin the lastyear from all companies in consolidated reports(such as to be a consultant,not an employee):None.

• 19 -

Remuneration Intervals

Intervals of Remuneration Paid to Directors (NT$)		Director	Director	Director
	Sum of	A,B,C,D	Sum of A,B,C,D,E,F,G
	From SINBON8	From All Consolidated Entities9 (I)	From SINBON8	From All Consolidated Entities9 (J)
Under 1,000,000	Min-Cheng Lin Ho-Min Chen Te-ChengChiu	Min-Cheng Lin Ho-Min Chen Te-ChengChiu	Min-Cheng Lin Ho-Min Chen Te-ChengChiu	Min-Cheng Lin Ho-Min Chen Te-ChengChiu
1,000,000 (incl.)-2,000,000 (excl.)	Zheng-Yan Chang Chi-Lin Wei Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd. Cao-Liang Wang, rep of ArgosyResearch	Zheng-Yan Chang Chi-Lin Wei Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd. Cao-Liang Wang, rep of ArgosyResearch	Zheng-Yan Chang Chi-Lin Wei Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd. Cao-Liang Wang, rep of ArgosyResearch	Zheng-Yan Chang Chi-Lin Wei Kuo-Hong Wang, rep of Kuo-Shian Investment Co., Ltd. Cao-Liang Wang, rep of ArgosyResearch
2,000,000 (incl.)-3,500,000 (excl.)	Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd. Xin-Chi Yeh Wei-Ming Liang Joseph Wang	Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd. Xin-Chi Yeh Wei-Ming Liang Joseph Wang	Xin-Chi Yeh Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.	Xin-Chi Yeh Wei-Chun Wang, rep of Tai-Yi Investment Co., Ltd.
3,500,000(incl.)-5,000,000(excl.)
5,000,000 (incl.)-10,000,000 (excl.)			Wei-Ming Liang Joseph Wang	Wei-Ming Liang 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	19,050,000	19,050,000	30,197,000	30,715,000

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 the 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 the 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. In addition, according to IFRS 2 "Fundamental basis for the payment", the remuneration recognized as salary costs should also be included, including the acquisition of employee stock vouchers, restrictions on employee rights and participation in new shares and other shares, etc.

6This refer to the employee profit sharing (including stock and cash) of directors who are also employees (including the 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.

7The total amount of all remunerations paid to directors by all consolidated entities (including SINBON).

8The name of directors must be disclosed in respective remuneration intervals based on the total amount of remunerations paid to each director by SINBON.

• 9The 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).

10This 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. 11

• 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 (I), 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.

*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.

• 20 -

3.3.2. Remunerations Paid to President and Vice Presidents

								(December 31,2019;Expressed in Thousands of NTD)	(December 31,2019;Expressed in Thousands of NTD)	(December 31,2019;Expressed in Thousands of NTD)	(December 31,2019;Expressed in Thousands of NTD)	(December 31,2019;Expressed in Thousands of NTD)	(December 31,2019;Expressed in Thousands of NTD)	(December 31,2019;Expressed in Thousands of NTD)
Title	Name	Base Compensation (A)3		Severance Pay and Pensions (B)		Bonuses, Special Disbursement, etc. (C)4		Employee Profit Sharing (D)5				The proportion of the sum of items A-D in net profit after tax9		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
								Cash	Stock (Fair Market Value)	Cash	Stock (Fair Market Value)
President	Wei-Ming Liang	5,276	7,752	-	-	2,536	2,536	1,460	-	1,460	-	0.54	0.68	-
Vice President	Zhen-Xing Chen (Note 1)
	Wen-Sen Huang
	Jun-Yu 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.

1Retirement on Feb. 28, 2019.

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 1,000,000
1,000,000(incl.)-2,000,000(excl.)	Zhen-XingChen	Zhen-XingChen
2,000,000 (incl.)-3,500,000 (excl.)	Wei-Ming Liang; Wen-Sen Huang;Jun-Yu Chen	Wei-Ming Liang; Wen-Sen Huang;Jun-Yu Chen
3,500,000(incl.)-5,000,000(excl.)
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	9,272,000	11,748,000

2The 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.

3Fill in the base compensation, allowances, and severance pay of presidents and vice presidents in the last year.

4This 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. In addition, according to IFRS 2 "Fundamental basis for the payment", the remuneration recognized as salary costs should also be included, including the acquisition of employee stock vouchers, restrictions on employee rights and participation in new shares and other shares, etc.

5This 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.

6The total amount of all remunerations paid to presidents and vice presidents by all consolidated entities (including SINBON).

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

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

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

• 21 -

10

• a. This refers to the amount of 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.

*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, 2019; Expressed in Thousands of NTD)

	Title1	Name1	Amount of Profit Sharing in Stock	Amount of Profit Sharing in Cash	Total	The proportion of Net Profit after Tax (%)
Executives	President	Wei-MingLiang	-	3,220	3,220	0.19
	Vice President	Wen-Sen Huang
	Vice President	Jun-Yu Chen
	Director	PingLi
	Director	Jia-Zhi Hsu
	Director	Li-Li Huang
	Director	Jun-QiangWang
	Director	Cheng-LingLi
	Director	Xiu-Sui Lin
	Director	Yun-Ru Huang
	Director	Xin-Chun Wu
	Director	Jin-ZongHuang
	Ass. Director	Kong-De Yang 5
	Ass. Director	Hao-Min Hsu
	Ass. Director	Bing-Chen Song
	Ass. Director	Jin-Ze Zheng
	Ass. Director	Min-ZhengLin
	Ass. Director	Jia-QingLin
	Ass. Director	Ya-Hui Guo
	Director	Pei-LingHuang 6
	Ass. Director	Kui-Zhen Feng
	Ass. Director	Pin-Jen Chen
	Ass. Director	Chien-MingHuang
	Ass. Director	Hsing-Hsiu Kuo
	Ass. Director	Kuo-HungChen
	Ass. Director	Bing-Chen Fu
	Director	Yu-Shan Su
	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.

5 Resigned on Dec 31, 2019.

6 Resigned on May 31, 2019.

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

and future risk.
	(December 31,2019
Item	Theproportion of Total Remuneration Amount in Net Profit after Tax(%)
	2019		2018
	SINBON	All Consolidated Entities	SINBON	All Consolidated Entities
Directors	1.75	1.78	1.64	1.68
President and Vice Presidents	0.54	0.68	0.74	0.92
Note: Although the amount of remunerations in 2019 was more than in 2018, the percentage of the increase is lower than 20%,so there is no explanation needed accordingto the rules.

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

• A. Directors and Supervisors: There is no fixed salary but travelling 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 the 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 proposes 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 2019 and April 2020, 4 (A) board meetings were held, and director attendances are as follows:

	attendances are as follows:
Title	Name1	Actual Participation (Attendance) B	Agent Attendance	Actual Participation (Attendance) Rate(%) (B/A)2	Remarks
Chairman	Joseph Wang	3	1	75%	-
Director	Wei-Ming Liang	4	0	100%	-
Director	Xin-Chi Yeh	4	0	100%	-
Director	Cao-Liang Wang, rep. of ArgosyResearch Inc.	4	0	100%	-
Director	Wei-Chun Wang, rep. of Tai-Yi Investment Co.,Ltd.	4	0	100%	-
Director	Kuo-Hong Wang, rep. of Kuo-Shian Investment Co.,Ltd.	4	0	100%	-
Director	Te-Cheng Chiu	4	0	100%	-
Director	Min-Cheng Lin	2	0	100%	Resigned on January 7,2020.
Independent Director	Chi-lin Wei	4	0	100%	-
Independent Director	Zheng-Yan Chang	4	0	100%	-
Independent Director	Ho-Min Chen	4	0	100%	Elected on June 6, 2020.

• 23 -

Annotations

• (1) The board operation has one of below status should 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:

• A. Items listed in Article 14-3 of the Securities and Exchange Act.

• B. The other board resolutions with a dissenting opinion or qualified opinion expressed by independent directors and recorded in the minutes or in writing.

Date Name	July 26 2019	Oct. 25 2019	Mar. 20 2020	Apr. 23 2020
Chi-lin Wei	No objections	No objections	No objections	No objections
Zheng-Yan Chang	No objections	No objections	No objections	No objections
Ho-Min Chen	No objections	No objections	No objections	No objections

• (2) For the recusal of proposals by directors for conflicts of interest, the name of directors, proposal content, the reason for recusal, and voting status must be specified: None.

• (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 once a year. 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. The evaluation had done on October 29, 2019 and the results have been published on the website: https://www.sinbon.com/en/corporate-governance, the rating was 100%.

1If directors and supervisors are entities, the name of the Company 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.

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3.4.2. Evaluation of Board of Directors

Frequency	Period	Scope	Method	Content
Once per Year	2019/01/01~ 2019/12/31	Board of Directors	Internal self-evaluation of the Board of Directors	1

• 2 The measurement items include the following indicators:

• (1) Evaluation of Board of Directors: participation in the company’s operation, improving the quality of the board’s decision-making, board composition and structure, director selection and continuous training and internal control.

• (2) Evaluation of each director: understanding of the company’s business objectives and director’s duties, participation in the company’s operation, internal communication and management, director selection and continuous training and internal control.

3.4.3. Audit Committee Operation or Supervisor Participation in Board Operation:

SINBON adopted the supervisor system without establishing an audit committee. Between June 2018 and April 2019, 5 (A) board meetings were held, and supervisor attendances are as follows:

Title	Title	Name	Actual Attendance (B)	Actual Attendance Rate (%) (B/A) (Notes)	Actual Attendance Rate (%) (B/A) (Notes)	Remarks
Independent Director		Chi-Lin Wei	4	100%		-
Independent Director		Zheng-Yan Chang	4	100%		-
Independent Director		Ho-Min Chen	4	100%		Elected on June 6,2019.
Annotations (1) a. Matters relatingto Article 14-5 of the Securities and Exchange Act: Date Agenda and subsequent processes Mar. 14,2019  Approval of the consolidated financial statement and individual financial statements of 2018  Approval of the profit allocation plan of 2018  Approval of the Statement of Compliance of Internal Control System Compliance of 2018  Approval of the assessment results of CPA independency: Complied  Approval of renewal of the credit line from HSBC (China)  Approval of amendment to the Operational procedures for Acquisition and Disposal of Assets  Approval of amendment to Procedures for Lending Funds to Others.  Approval of amendment to the Operational Procedures for Endorsements and Guarantees Apr. 19, 2019  Approval of the consolidated financial statement of Q1 2019  Approval of renewal of the credit line from CTCB and Land Bank of Taiwan  Approval of Beijing SINBON Tongan Capital Increased byCash for employee stockpurchaseplan Jul. 26, 2019  Approval of the consolidated financial statement of Q2 2019  Approval of the change of CPA from Ernst & Young  Approval of Beijing SINBON Tongan to establish new subsidiary “Enmagic Renewable Energy Co., Ltd.” in Taiwan.  Approval of renewal of the credit line from HSBC(Taiwan), CTBC, Bank SinoPac, Taipei Fubon Bank,DBS,Mizuho Bank and Taishin Bank.					Board resolutions and how the company handles the opinions All of the independent directors raised no objection and approved by the Board of Director.
	Date	Agenda and subsequent processes			Board resolutions and how the company handles the opinions
	Mar. 14,2019	 Approval of the consolidated financial statement and individual financial statements of 2018  Approval of the profit allocation plan of 2018  Approval of the Statement of Compliance of Internal Control System Compliance of 2018  Approval of the assessment results of CPA independency: Complied  Approval of renewal of the credit line from HSBC (China)  Approval of amendment to the Operational procedures for Acquisition and Disposal of Assets  Approval of amendment to Procedures for Lending Funds to Others.  Approval of amendment to the Operational Procedures for Endorsements and Guarantees			All of the independent directors raised no objection and approved by the Board of Director.
	Apr. 19, 2019	 Approval of the consolidated financial statement of Q1 2019  Approval of renewal of the credit line from CTCB and Land Bank of Taiwan  Approval of Beijing SINBON Tongan Capital Increased byCash for employee stockpurchaseplan
	Jul. 26, 2019	 Approval of the consolidated financial statement of Q2 2019  Approval of the change of CPA from Ernst & Young  Approval of Beijing SINBON Tongan to establish new subsidiary “Enmagic Renewable Energy Co., Ltd.” in Taiwan.  Approval of renewal of the credit line from HSBC(Taiwan), CTBC, Bank SinoPac, Taipei Fubon Bank,DBS,Mizuho Bank and Taishin Bank.

• 25 -

(2)	Oct. 25, 2019	 Approval of the consolidated financial statement of Q3 2019  Approval of 2020 Audit planning  Approval of renewal of the credit line from Shin Kong Bank, Cathay Bank and Bank of Taiwan  Approval of Beijing SINBON Tongan to establish new subsidiary “SINBON TongAn Renewable Energy ApS” in Denmark.  Approval of T-CONN Precision Corporation and SINBON Holding GmbH Capital Increased by Cash.  Approval of loan to SINBON Holding GmbH’s subsidiary“SINBON HungaryKft”.
	Mar. 20, 2020	 Approval of the consolidated financial statement and individual financial statements of 2019  Approval of the profit allocation plan of 2019  Approval of the Statement of Compliance of Internal Control System Compliance of 2019  Approval of the assessment results of CPA independency: Complied  Approval of provision of endorsement and guarantee for SINBON USA LLC  Approval of renewal of the credit line from Land Bank and Mizuho Bank  Approval of amendment to the Procedures for Ethical Management and Guidelines for Conduct
	Apr. 23, 2020	 Approval of the consolidated financial statement of Q1 2020  Approval of renewal of the credit line from Mizuho Bank, Far Eastern Bank and Taipei Fubon Bank  Approval of investment of the private placement of common shares of VAN MOOF Global Holding BV  Approval of Beijing SINBON TongAn Electronics Co., Ltd. made an initial public offering of RMB common stock (A shares) and applied for listing on the Shenzhen Stock Exchange or other Stock Exchanges  Approval of Beijing SINBON TongAn Electronics Co., Ltd. appointed SINOLINK Securities to organize the IPO issues.  Approval of loan to SINBON Holding GmbH’s subsidiary“SINBON HungaryKft”.

• 26 -

	j. Financial reports;
	k. Other material issues imposed by other companies or authorities.
(3)	Communication between supervisors and chief auditor/CPA: Supervisors actively communicate
	organizational financial and sales situations with the chief auditor and CPA by phone, e-mail, or
	meeting. In addition, the chief auditor submits the audit reports to supervisors periodically and CPA
	will send a questionnaire to supervisors to implement two-way communication with supervisors. Since
	the 3rdmeeting of the board in 2016, CPA attended the meeting of the board quarterly to
	communicate with supervisors and chief auditor face to face. Our website also disclosure the
	communication status athttps://www.sinbon.com/en/corporate-governance.
(4)	If supervisors express an opinion at a board meeting, specify the date and term of the board meeting,
	theproposal content,board resolutions,and the handlingof opinion expressed bysupervisors:
	Date
	July 26 2019 Oct. 25 2019 Mar. 20 2019 Apr. 2 2019
	Name
	Chi-Lin Wei No objections No objections No objections No objections
	Zheng-Yan Chang No objections No objections No objections No objections
	Ho-Min Chen (Elected on Jun 6,2019) No objections No objections No objections No objections

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 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.

3.4.4. Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item			Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?			The Company has established the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx 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 an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the company establish and execute the risk management and	  		(1) The company has a "Measures to Report Cases of Illegal and Unethical or Indecent Assassin Acts" and has established a "Stakeholder Area" webpage and spokesperson system in accordance with the regulations to handle related matters. Please visit our website: https://www.sinbon.com/tw/csr/stakeholder-contact (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”,“Investment	No No No

• 27 -

Evaluation Item			Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?			Management Regulations”, “Internal Control System”, “Internal Audit System”, and relevant laws and regulations to handle affiliate issues. (4) The Company has established the “ Corporate Governance Best Practice Principles” and article 8 is prohibiting insider trading on undisclosed information.	No
3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members? (2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the company establish a standard to measure the performance of the Board and implement it annually, and are performance evaluation results submitted to the Board of Directors and referenced when determining the remuneration of individual directors and nominations for reelection? (4) Does the company regularly evaluate the independence of CPAs?	   		(1) The Company has established the “ Corporate Governance Best Practice Principles” and please refer the article18. Board members have been selected from qualified candidates by the chairman with board authorization. The status of the implement: (1) Diversify background: 3 directors of the board are executive director, 3 of them are business administrator, 2 of them are economics professor, 1 CPA, and 1 industry analysis. (2) 1 of the independent director is female and continuously to find suitable female directors. (3) Ages: 2 of the board members is older 70, 3 between 60 and 70, 4 between 50 and 60, and 1 below 50. (2) The Company established “General Management Team” at 1stBOD meeting in 2018. Please find the rules of procedure on our website. (3) The Company had established the “Evaluation of the Board of Directors Performance” since April 22, 2016 and finished the performance report and public it on Oct. 29, 2019 on the Company’s website. The Company will do the evaluation once a year via questionnaires then report to the board. (4) The Company assesses the independence of CPAs on a regular basis (once a year) with reference to Article 27 of the BPP and reports the results to the board, and the last report was presented on Mar. 20, 2020. The Company assesses the independence 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 independence issued by CPAs. So far, no incident or event affecting CPA independency has been detected.	No. No. No. No.

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Evaluation Item			Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
4. Does the company appoint a suitable number of competent personnel and a supervisor responsible for corporate governance matters (including but not limited to providing information for directors and supervisors to perform their functions, assisting directors and supervisors with compliance, handling work related to meetings of the board of directors and the shareholders' meetings, and producing minutes of board meetings and shareholders' meetings)?			The Board of Director had assigned assistant manager CHENG,PI-WEI as the company’s full-time head of corporate governance on April 23, 2020. The main duties are providing the required information to directors and supervisors to carry out the business, handle the matters relating to the BOD and the shareholders 'meeting in accordance with the law, handle the registration issues of the Company, and make the meeting minutes for BOD and the shareholders' meeting. The implementation of corporate governance 2020: 1.Assist independent directors and directors to perform their duties, provide necessary information and arrange directors' training. 2. Assist the board of directors and shareholders in meeting procedures and resolutions 3. To draw up the agenda of the board of directors, notify the directors seven days ago, convene the meeting and provide meeting materials, and give advance reminders if the topics need to be avoided, and complete the minutes of the board meeting within 20 days after the meeting. 4. According to the law, pre-registration of the date of the shareholders' meeting, preparation of meeting notices, discussion manuals, and minutes of proceedings within the statutory time limit, and change of registration in the amendment of the articles of association or the election of directors Training situation for 2020: The annual training has not been completed before the preparation of the annual report, and will be disclosed on the company's website after completion.	No.
5. Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?			The Company has established a “Stakeholders Section” on the website and implemented the spokesperson system to handle relevant affairs. The implement results had reported to 7thBOD meeting in 2018 and published on our website: https://www.sinbon.com/en/csr/stakeholder-contact	No.
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?			The Company has assigned the Register Department of Taishin International Bank as our register.	No.
7. Information Disclosure (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance?			(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).	No.

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Evaluation Item				Implementation Status1	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Illustration
(2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? (3) Does the company announce and report annual financial statements within two months after the end of each fiscal year, and announce and report Q1, Q2, and Q3 financial statements, as well as monthly operation results, before the prescribed time limit?			(2) (3)	The Company has established the spokesperson system to handle relevant affairs and discloses material information over the Chinese and English versions and public the CSR report on the corporate website. The Company publishes and declares relevant financial reports and operating conditions for each month in accordance with the relevant regulations. Although the annual financial report was not announced and reported within two months after the end of the fiscal year, the first, second, and third quarter financial reports and the monthly operating situation were announced in advance. Please find the Market Observation Post System in detail: http://newmops.twse.com.tw/	No. No.
8. Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?			The Company has always been concerned about the rights and benefits of customers, suppliers, shareholders, and employees. Apart from implementing humanized management, we value work environment safety and health and has established the Employee Welfare Committee, arrange liability insurance for directors and supervisors, and establish the employee profit sharing system in our articles of incorporation. Apart from providing in-service corporate governance training for directors and supervisors at least three hours each year, we arrange 12 hours of corporate governance training for new directors and supervisors. The result of the 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. Pease refer to the Company’s CSR report to get more information.		No.

• 30 -

• Please explain the improvements which have been made in accordance with the results of the Corporate Governance Evaluation System released by the Corporate Governance Center, Taiwan Stock Exchange, and provide the priority enhancement measures. The result of the last corporate governance evaluation for the Company is top 21% ~ 35%. The Company had done some works on the improvement of the quality of the board of directors' decision making, for example, to hold at least 2 remuneration committee meetings in 1 year and at least 2 times attendance of each member; improving information transparency: issued material information bilingually; implement corporate social responsibility: The Company had assigned Performance Evaluation Department to be the corporate governance unit and deputy spokesperson is responsible for corporate governance-related matters and the results had reported to 7[th] BOD meeting in 2018 and published on our website. In 2018, SINBON establish audit committee. In 2020, at least 2 independent directors on duty less 9 years term, at least 2 remuneration committee members are independent directors, to hold at least 6 BOD meetings, and amendment the articles of incorporation and disclosure specific dividend policy.

• 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.

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3.4.5. Composition, Responsibilities and Operations of the Remuneration Committee

(1) Professional Qualifications and Independence Analysis of Remuneration Committee Members

		Committee Members	Committee Members	Committee Members
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	9	10
Independent Director	Chi-Lin Wei	Yes	No	Yes											4	-
Independent Director	Zheng-Yan Chang	Yes	Yes	Yes											0
Others	Mu-Xiao Liu	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 per cent 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 per cent 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 per cent 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.

• (9) Not provide audit services, or provide commerce, receiving less than NT$ 500,000 in the past two years, to the Company or to any affiliate of the Company, the business owner, partner, director (managing director), auditor (managing auditor), manager and their spouse of a sole ownership, partnership, incorporated entity or organization, except as a member of the payroll remuneration council for exercising its fiduciary duties per article 7 of the stock launching or securities dealers business office trading company’s payroll remuneration council set up and exercising its fiduciary duty measures.

(10) Not been a person of any conditions defined in Article 30 of the Company Law.

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• (2) Attendance of Members at Remuneration Committee Meetings

• A. Committee members: 3.

B. Current term: June 19, 2018 to June 7, 2021. By April 30, 2020, 3 committee meetings (A) were held, and the qualification and attendance of committee members are as follows:

	Title	Title	Name	Actual Attendance(B)	Agent Attendance	Actual Attendance Rate(%) (B/A) (Note)	Actual Attendance Rate(%) (B/A) (Note)		Remarks
	Convener		Chi-Lin Wei	3	0	100%			Re-election
	Committee Member		Zheng-Yan Chang	2	0	67%			Join on March 14, 2019.
	Committee Member		Mu-Xiao Liu	3	0	100%			Re-election
	The main issues reviewed and summarized below:
	Date	Agenda and subsequent processes					Results		The Company’s responses
	Mar. 14,2019	1. To review and approve the company's employee compensation and director and supervisor compensation in 2018. 2. To review and approve the amendments to the organizational rules of the Salary and Remuneration Committee. 3. To review and approve the remuneration for the newly appointed Vice President of the company. 4. To review and approve the remuneration for the company's new director. 5. To review and approve the remuneration for the company's new Ass. Director.					Approved		Submitted to the Board of Director and approved.
	Jul. 26, 2019	To review and approve the remuneration for the company's new manager.
	Mar. 20, 2020	1. To review and approve the company's employee compensation and director and supervisor compensation in 2019. 2. To review and approve the remuneration for the company's new manager. 3. To review and approve the remuneration for managers of the company.

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.

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3.4.6. Fulfillment of CSR and Deviations from the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies"

Evaluation Item			Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
1. Does the company assess ESG risks associated with its operations based on the principle of materiality, and establish related risk management policies or strategies? (Note3)			(1) In the face of internationalization of the operational scale, increasingly complex impact and changes of the global economic environment, SINBON identifies relevant risks that may affect the sustainable development of the enterprise from daily operation and formulates relevant management strategies and response measures to reduce the potential risks of operational disruption. (2) SINBON's risk management policies and risk measurements are handled in accordance with the Company's "Regulations Governing the Acquisition and Disposal of Assets," "Regulations Governing Endorsements/Guarantees," "Guidelines for the Adoption of Codes of Ethical Conduct," "Regulations Governing Procedure for Board of Directors Meetings," and "Procedures for HandlingMaterial Inside Information."	No
2. 2.Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reportingto the board?			The Company reports the effectiveness and progress of CSR implementation to the board once a year. Please refer 2018 CSR report.	No
3. Environmental issues (1) Does the company establish proper environmental management systems based on the characteristics of their industries? (2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment? (3) Does the company evaluate the potential risks and opportunities in climate change with regard to the present and future of its business, and take appropriate action to counter climate change issues? (4) Does the company take inventory of its greenhouse gas emissions, water consumption, and total weight of waste in the last two years, and implement policies on energy efficiency and carbon dioxide reduction, greenhouse gas reduction, water reduction,or waste management?	   		(1) The Company sets RoHS, PFOA, PFOS as our production targets with reference to customer demand and international environmental trends. No product returns 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 policyimplementation and implement the	No No No No

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Evaluation Item			Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
			ISO14001 EMS (passed certification in 2002, The certificate is valid from 27 April 2018 until 06 April 2021). (7) In 2012, the Company passed the ISO 14064-1 GHG inventory for enterprise certification, and we implement GHG inventory every year since then. (8) The Company has calculated the greenhouse gas emissions, water consumption and total weight of waste in the past two years, and formulate policies for energy saving, carbon reduction, greenhouse gas reduction, water use reduction or other waste management. Please refer to 2018 CSR report CH3. (9) The others, please refer 2018 CSR report.
4. Social issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (2) Does the company have reasonable employee benefit measures (including salaries, leave, and other benefits), and do business performance or results reflect on employee salaries? (3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (4) Does the company provide its employees with career development and training sessions?	   		(1) The Company passed SA8000 social accountability certification since 2013 and voluntarily establish our internal management policy and procedures with reference to the UN Global Compact. (2) In addition to fixed salary, the company also distributed performance bonuses in the first and third quarters. Performance bonuses have immediate incentives and a high degree of performance correlation, which not only reflects the company's overall operating profit, but also relates to individual performance, so that the results of operating performance can reasonably link to employees' salary and rewards. (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) In response to organizational strategic development goals and fulfil the work competency need of employees, the Company provides comprehensive learning methods and channels, such as internal training, external training,and annual learningsubsidies.	No No No No.

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Evaluation Item	Implementation Status1	Implementation Status1	Implementation Status1	Deviations from “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation2
(5) Do the company's products and services comply with relevant laws and international standards in relation to customer health and safety, customer privacy, and marketing and labeling of products and services, and are relevant consumer protection and grievance procedure policies implemented? (6) Does the company implement supplier management policies, requiring suppliers to observe relevant regulations on environmental protection, occupational health and safety, or labor and human rights? If so, describe the results.	 		(5) The Company categorizes the problems reflected in customer complaints and take timely action to resolve them to regain customer satisfaction. (6) 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 an on-site audit of suppliers to ensure CSR is implemented by suppliers.	No No
5. Does the company reference internationally accepted reporting standards or guidelines, and prepare reports that disclose non-financial information of the company, such as corporate social responsibility reports? Do the reports above obtain assurance from a third party verification unit?			(1) The Company voluntarily discloses CSR information on the corporate website, and “environmental sustainability, green proclamation, and social commitment” are the three axes of implementation. (2) The Company has published CSR report to disclose our performance in CSR implementation and published on the website from 2015. (3) The Company has obtained the assurance report of independent auditors for 2018 CSR.	No
6. Describe the difference, if any, between actual practice and the corporate social responsibility principles, if the company has implemented such principles based on the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies: No difference.
7. Other useful information for explaining the status of corporate social responsibility practices: (1) The Company implements CSR with reference to the four aspects: human rights, labor, environment, and anti-corruption prescribed in The Ten Principles of UN Global Compact. (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 throughplanningand real action.

• (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.

• 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.

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3.4.7. Fulfillment of Ethical Corporate Management and Deviations from the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"

Fair and Ethical Business Operations

Evaluation Item			Implementation Status1	Deviations from the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”and Reasons
	Yes	No	Abstract Illustration
1. Establishment of ethical corporate management policies and programs (1) Does the company have a Board-approved ethical corporate management policy and stated in its regulations and external correspondence the ethical corporate management policy and practices, as well as the active commitment of the Board of Directors and management towards enforcement of such policy? (2) Does the company have mechanisms in place to assess the risk of unethical conduct, and perform regular analysis and assessment of business activities with higher risk of unethical conduct within the scope of business? Does the company implement programs to prevent unethical conduct based on the above and ensure the programs cover at least the matters described in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies? (3) Does the company provide clearly the operating procedures, code of conduct, disciplinary actions, and appeal procedures in the programs against unethical conduct? Does the company enforce the programs above effectively and perform regular reviews and amendments?	  		(1) The Company has established and implemented the “Code of Business Ethics” and “Fair and Ethical Operations SOP and Conduct Guidelines”. (2) Internal audits are included in the annual audit program to audit the effectiveness of the implementation of relevant policies and practices regularly and irregularly. (3) The Company includes the above code, SOP, and conduct guidelines in annual training/education courses.	No No No
2. Fulfill operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company have a unit responsible for ethical corporate management on a full-time basis under the Board of Directors which reports the ethical corporate	 		(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 once a year(7th BOD meeting in 2018). The internal audit unit also reports to the board	No No

• 37 -

management policy and programs against unethical conduct regularly (at least once a year) to the Board of Directors while overseeing such operations? (3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Does the company have effective accounting and internal control systems in place to implement ethical corporate management? Does the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the systems accordingly to prevent unethical conduct, or hire outside accountants to perform the audits? (5) Does the company regularly hold internal and external educational trainings on operational integrity?	  		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 includes it in the training/ education for new employees.	No No No
3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? (2) Does the company have in place standard operating procedures for investigating accusation cases, as well as follow-up actions and relevant post-investigation confidentiality measures? (3) Does the company provide proper whistleblower protection?	  		(1) The Company establishes “Stakeholder Section” on the website to handle all relevant reports. (2) The Company has establishes the “procedures for dealing with Unlawful, Unethical or Dishonesty issues”. (3) This protection policy includes non-disclosure of information sources, an investigation by a third-party unit, and the signing of a non-disclosure agreement amongallparties involved.	No No No
4. Strengthening information disclosure (1) Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?			(1) Our corporate website: www.sinbon.com (2) MOPS website2. (3) In 2019 no punishment for violation of fair and ethical business operations was reported.	No
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation: No difference.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies): 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”).

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• 3.4.8. Search for the 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”).

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

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

• (1) Statement of Internal Control

Statement of Compliance of the Internal Control System

March 20, 2020

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

1. SINBON’s Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. Our internal control is a process designed to provide reasonable assurance over the effectiveness and efficiency of our operations (including profitability, performance and safeguarding of assets), reliability, timeliness, transparency of our reporting, and compliance with applicable rulings, laws and regulations.

2. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and SINBON takes immediate remedial actions in response to any identified deficiencies.

3. SINBON evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (herein below, the “ Regulations”). The criteria adopted by the Regulations identify five key components of managerial internal control: (1)control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities.

4. SINBON has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.

5. Based on the findings of such evaluation, SINBON believes that, on December 31, 2018, it has maintained, in all material respects, an effective internal control system (that includes the supervision and management of our subsidiaries), to provide reasonable assurance over our operational effectiveness and efficiency, reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations.

6. This Statement is an integral part of SINBON’s annual report and prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law .

7. This Statement was passed by the Board of Directors in their meeting held on March 20, 2020, with none of the eight attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

SINBON Electronics Co., Ltd. Joseph Wang Chairman

Wei-Ming Liang President

• 39 -

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

• 3.4.11. 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.

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

• March 14, 2019 Board Meeting  Approval of the Employee compensation and directors' compensation of 2018

   - Approval of the consolidated financial statement and individual financial statements of 2018
  
   - Approval of the profit allocation plan of 2018
  
   - Approval of the Statement of Compliance of Internal Control System Compliance of 2018
  

				 Approval of the consolidated financial statement and individual financial statements of 2018  Approval of the profit allocation plan of 2018  Approval of the Statement of Compliance of Internal Control System Compliance of 2018
				 Approval of the Business Plan 2019
				 Approval of the assessment results of CPA independency: Complied
				 Approval of amendment to Remuneration Committee Charter
				 Approval of the remuneration for new vice VP of the company
				 Approval of the remuneration package for new marketing director and
				associate director
				 Approval of appointment of members of Remuneration Committee
				 Approval of nomination and election director and Independent director
				 Approval of the renewal of new stock base date of Bondholders for the
				6th Issued Domestic Secured Convertible Corporate Bonds
				 Approval of renewal of the credit line from HSBC (China)
				 Approval of amendment to the Operational procedures for Acquisition
				and Disposal of Assets
				 Approval of amendment to the Rules and Procedures of Board of
				Directors Meetings
				 Approval of amendment to Procedures for Lending Funds to Others.
				 Approval of amendment to the Operational Procedures for Endorsements
				and Guarantees
				 Approval of amendment to the Company's Corporate Charter (Articles of
				Incorporation)
				 Proposal of Release the Prohibition on Directors from Participation in
				Competitive Business
				 Approval of the agenda and relevant affairs of the annual
				shareholders’meeting of 2019
19	April,	2019	Board Meeting	 Approval of the consolidated financial statement of Q1 2018
				 Review Director nominations and proposals of shareholders' meeting
				 Formulating the principle of issuing souvenirs to shareholders of
				shareholders
				 Approval of renewal of the credit line from CTCB and Land Bank of Taiwan
				 Approval of the renewal of new stock base date of Bondholders for the
				6th Issued Domestic Secured Convertible Corporate Bonds
				 Approval of t Beijing SINBON Tongan Capital Increased by Cash for
				employee stock purchase plan
06	June,	2019	Shareholder	Approval of of the 2018 Business Report and Financial Statements
			Meeting	Result: Adopted and published meeting minutes on MOPS
				Approval of of distribution on 2018 profits
				Result: Adopted and distributed on 8 Aug., 2019.
				Amendment to the Company's Corporate Charter (Articles of
				Incorporation)

• 40 -

		Result: Passed and published meeting minutes on MOPS
		Amendment to the Operational procedures for Acquisition and Disposal
		of Assets
		Result: Passed and published meeting minutes on MOPS
		Amendment to the Operational Procedures for Loaning of Company
		Funds
		Result: Passed and published meeting minutes on MOPS
		Amendment to the Operational Procedures for Endorsements and
		Guarantees
		Result: Passed and published meeting minutes on MOPS
		Approval of of Directors re-election
		Result: Passed and published meeting minutes on MOPS
		Proposal of Release the Prohibition on Directors from Participation in
		Competitive Business
		Result: Passed and published meeting minutes on MOPS
26 Jul., 2019	Board Meeting	 Approval of the consolidated financial statement of Q2 2019
		 Approval of the change of CPA from Ernst & Young
		 Approval of the renewal of new stock base date of Bondholders for the
		6th Issued Domestic Secured Convertible Corporate Bonds
		 Approval of the remuneration for new managers of the company
		 Approval of Beijing SINBON Tongan to establish new subsidiary “Enmagic
		Renewable Energy Co., Ltd.” in Taiwan.
		 Approval of renewal of the credit line from HSBC(Taiwan), CTBC, Bank
		SinoPac, Taipei Fubon Bank, DBS, Mizuho Bank and Taishin Bank.
25 Oct., 2019	Board Meeting	 Approval of the consolidated financial statement of Q3 2019
		 Approval of 2020 Audit planning
		 Approval of the renewal of new stock base date of Bondholders for the
		6th Issued Domestic Secured Convertible Corporate Bonds
		 Approval of renewal of the credit line from Shin Kong Bank, Cathay Bank
		and Bank of Taiwan
		 Approval of Beijing SINBON Tongan to establish new subsidiary “SINBON
		TongAn Renewable Energy ApS” in Denmark.
		 Approval of T-CONN Precision Corporation and SINBON Holding GmbH
		Capital Increased by Cash.
		 Approval of loan to SINBON Holding GmbH’s subsidiary “SINBON Hungary
		Kft”.
		 Approval of amendment to the Company's Corporate Charter (Articles of
		Incorporation)
		 Approval of amendment to the Guidelines for the Adoption of Codes of
		Ethical Conduct
		 Approval of amendment to the Ethical Corporate Management Best
		Practice Principles
		 Approval of amendment to the Procedures for Ethical Management and
		Guidelines for Conduct
March 20, 2020	Board Meeting	 Approval of the consolidated financial statement and individual financial
		statements of 2019
		 Approval of the Employee compensation and directors' compensation of
		2019
		 Approval of the profit allocation plan of 2019
		 Approval of the Statement of Compliance of Internal Control System
		Compliance of 2019
		 Approval of the Business Plan 2020
		 Approval of the assessment results of CPA independency: Complied
		 Approval of the renewal of new stock base date of Bondholders for the
		6th Issued Domestic Secured Convertible Corporate Bonds
		 Approval of provision of endorsement and guarantee for SINBON USA LLC
		 Approval of renewal of the credit line from Land Bank and Mizuho Bank
		 Approval of amendment to the Corporate Social Responsibility Practice

• 41 -

Guidelines

• Approval of amendment to the Procedures for Ethical Management and Guidelines for Conduct

• Approval of amendment to Corporate Governance Code of Practice

• Approval of the agenda and relevant affairs of the annual shareholders ’ meeting of 2020

• 23 April, 2020 Board Meeting

• Approval of the consolidated financial statement of Q1 2020

• Review Director nominations and proposals of shareholders' meeting

• Formulating the principle of issuing souvenirs to shareholders of shareholders

• Approval of amendment to the remuneration for managers of the company

• Approval of renewal of the credit line from Mizuho Bank, Far Eastern Bank and Taipei Fubon Bank

• Approval of the renewal of new stock base date of Bondholders for the 6th Issued Domestic Secured Convertible Corporate Bonds

• Approval of the "Corporate Governance Supervisor" assignment

• Approval of investment of the private placement of common shares of VAN MOOF Global Holding BV

• Approval of Beijing SINBON TongAn Electronics Co., Ltd. made an initial public offering of RMB common stock (A shares) and applied for listing on the Shenzhen Stock Exchange or other Stock Exchanges

• Approval of Beijing SINBON TongAn Electronics Co., Ltd. appointed SINOLINK Securities to organize the IPO issues

• Approval of loan to SINBON Holding GmbH’s subsidiary “SINBON Hungary Kft”

• Approval of amendment to the agenda and relevant affairs of the annual shareholders ’ meeting of 2020

• 3.4.13. 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.

• 3.4.14. 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

				April 30,2019
Title	Name	Inaugural Date	Relief Date	Reasons for Resignation or Relief
Vice President	Zhen-Xing Chen	May 08, 2006	Feburary 28, 2019	Retirement

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

3.5. Audit Fee

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:

• 42 -

	Expressed in Thousands of NTD	Expressed in Thousands of NTD
CPA Firm	Ernst & YoungTaiwan
Name of CPA(1)	Tzu-PingHuang
Name of CPA(2)	MingHungChen
Audit Service Fee	6,360
Non-audit Service Fee	System Design	0
	Registration	0
	Human Resources	0
	Others2	895
	Subtotal	895
Does the audit period cover an entire accounting year?	Coverage	Yes
	Auditperiod	2019

• 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 Firm	Name of CPAs		Audit Period	Remarks
Ernst & Young Taiwan	Tzu-Ping Huang	Hong-Kuang Lin	2019/1/1~6/30	CPA Rotation
Ernst & Young Taiwan	Tzu-Ping Huang	Ming Hung Chen	2019/6/30~12/31	CPA Rotation

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

Expressed in Thousands of NTD

Service Fee Internal	Service Fee Internal	Audit Service Fee	Non-Audit Service Fee	Total
1	Under 2,000		895	895
2	2,000(incl.)-4,000
3	4,000(incl.)-6,000
4	6,000(incl.)-8,000	6,360		6,360
5	8,000(incl.)-10,000
6	10,000 and over

• 43 -

CPA Service Fee

				CPA Service Fee	CPA Service Fee	CPA Service Fee
							Expressed in Thousands of NTD
CPA Firm	CPAs	Audit Service		Non-Audit Service				Audit Period	Remarks
			System Design3	Official Registration	Human Resources	Others2	Subtotal
Ernst & Young Taiwan	Tzu-PingHuang	6,360	-	-	-	895	895	2019	Other is CSR report
	Hong-KuangLin							2019/1/1~6/30
	MingHungChen							2019/6/30~12/31

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. Replacement of CPA

3.6.1. Regarding the former CPA

Replacement Date Replacement reasons and explanations Describe whether the Company terminated or the CPA did not accept the appointment Other issues (except for unqualified issues) in the audit reports within the last two years Differences with the company Other Revealed Matters	Jul. 26,2019	Jul. 26,2019	Jul. 26,2019
	Due to the structural organizational adjustment of Ernst & Young Taiwan, the company certification accountant of 2019Q3 was changed from Tzu-Ping Huangand Hong-KuangLin to Tzu-PingHuangand MingHungChen
	Partyinvolved	CPA	Client
	Voluntarytermination of assignment	V
	Rejection of assignment
	In the past two years, the company's CPAs have not issued opinions on the audit report other than unqualified opinions.
	None
	None

3.6.2. Regarding the successor CPA

3.6.2. Regardingthe successor CPA
Name of accountingfirm	Ernst & YoungTaiwan
Name of CPA	Tzu-PingHuangand MingHungChen
Date of appointment	Jul. 26,2019
Consultation results and opinions on accounting treatments or principles with respect to specified transactions and the company's financial reports that the CPA might issueprior to the engagement.	None
Succeeding CPA’s written opinion of disagreement toward the former CPA	None

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. The Company’s Chairman, Chief Executive Officer, Chief Financial Officer, and managers in charge of its finance and accounting operations did not hold any positions in the Company’s independent auditing firm or its affiliates during 2019.

• 44 -

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:

Unit: shares

				Unit: shares	Unit: shares
		2019		Until April 14ofcurrent year
		Increase	Increase	Increase	Increase
Title	Name	(reduction) of shares held	(reduction) of shares mortgaged	(reduction) of shares held	(reduction) of shares mortgaged
Chairman	Joseph Wang	-	-	-	-
Director	Xin-chi Yeh	-	-	-	-
Director	ArgosyResearch	-	-	-	-
Representative of Director	Chao-Liang Wang	-	-	-	-
Director	Wei-MingLiang	-	-	-	-
Director	Tai-Yi Investment Co.,Ltd.	-	-	-	-
Representative of Director	Wei-Chun Wang	-	-	-	-
Director	Kuo-Shian Investment Co.,Ltd.	-	-	-	-
Representative of Director	Kuo-Hong Wang	-	-	-	-
Director	Min-Cheng Lin(Resigned on January7,2020)	-	(50,000)	NA	NA
Director	Te-ChengChiu	-	-	-	-
Independent Director	Chi-Lin Wei	-	-	-	-
Independent Director	Shi-Kuan Chen(Resigned on January10,2019)	-	-	NA	NA
Independent Director	Zheng-Yan Chang	-	-	-	-
Independent Director	Ho-Min Chen	-	-	-	-
Vice President	Wen-Sen Huang	-	-	-	-
Vice President	Jun-Yu Chen	-	-	-	-
Vice President	Zhen-Xing Chen(Resigned on February28,2019)	-	-	NA	NA
Director	PingLi	-	-	-	-
Director	Jia-Zhi Hsu	-	-	-	-
Director	Li-Li Huang	5,000	-	-	-
Director	Xiu-Sui Lin	-	-	-	-
Director	Cheng-LingLi	(4,671)	-	-	-
Director	Yun-Ru Huang	-	-	-	-
Director	Chieh-Liang Chen(Resigned on March 21,2019)	-	-	NA	NA
Director	Xin-Chun Wu	-	-	-	-
Ass. Director	Kong-De Yang(Resigned on December 11,2019)	-	-	NA	NA
Director	Jun-QiangWang	-	-	-	-
Ass. Director	Hao-Min Hsu	-	-	-	-
Ass. Director	Jin-Ze Zheng	-	-	-	-
Ass. Director	Bing-Chen Song	-	-	-	-

• 45 -

		2019	2019	Until April 14ofcurrent year	Until April 14ofcurrent year
		Increase	Increase	Increase	Increase
Title	Name	(reduction) of shares held	(reduction) of shares mortgaged	(reduction) of shares held	(reduction) of shares mortgaged
Ass. Director	Min-ZhengLin	-	-	-	-
Ass. Director	Jia-QingLin	-	-	-	-
Ass. Director	Ya-Hui Guo	(2,000)	-	-	-
Director	Pei-Ling Huang (Resigned on May 31,2019)	-	-	NA	NA
Ass. Director	Kui-Zhen Feng	-	-	-	-
Ass. Director	Pin-Jen Chen	-	-	-	-
Ass. Director	Chien-MingHuang	-	-	-	-
Ass. Director	Hsing-Hsiu Kuo	-	-	-	-
Director	Jin-ZongHuang	-	-	-	-
Ass. Director	Kuo-HungChen	-	-	-	-
Ass. Director	Bing-Chen Fu	-	-	-	-
Director	Yu-Shan Su	-	-	1,000	-
CFO	Chi-Chou Chang	-	64,000	-	-

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 Transfer	Transaction Date	Transaction Counterparty	Relationship between the transaction counterparty and the Company, directors, supervisors, and shareholders holdingover 10% of shares	Shares	Transaction Price
N/A

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% ofshares	Shares	Shares Held (%)	Pledge Rate (%)	Pledge (redemption ) amount (NT$1,000)
Min-Zheng Lin(Resigned on January 7,2020)	Redemption	March 11, 2019	Taishin International Bank Co., Ltd.	No	50,000	0%	0%	N.A.
Chi-Chou Chang	Pledge	August 12, 2019	CTBC Bank Co., Ltd.	No	64,000	0.10%	28.39%	N.A.

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

2Fill in pledge or redemption.

• 46 -

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 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 Co., Ltd.	13,872,167	5.96%	0	0.00%	0	0.00%	N/A	N/A
Pen-Yuan Cheng Representative of Fubon Life Insurance Co.,Ltd.	0	0.00%	0	0.00%	0	0.00%
Aberdeen Standard OEIC II- ASI Global Smaller Companies Fund	7,745,000	3.33%	0	0.00%	0	0.00%	N/A	N/A
Deutsche Bank Deutsche Bank Taipei Branch entrusted with the Brei Global Fund - Berri Asia Japan Excluding Small Companies EquityFunds	7,659,000	3.29%	0	0.00%	0	0.00%	N/A	N/A
Joseph Wang	7,508,062	3.23%	2,131,236	0.92%	0	0.00%	Representative of Tai-Yi Investment Co.,Ltd.	Father and son
Swedbank Robur Globalfond	5,107,000	2.19%	0	0.00%	0	00.0%	N/A	N/A
Columbia Acorn Trust - Columbia Acorn International	4,366,000	1.88%	0	0.00%	0	0.00%	N/A	N/A
Tai-Yi Investment Co., Ltd.	4,130,572	1.77%	0	0.00%	0	0.00%	Joseph Wang	Father and son
Wei-Chun Wang Representative of Tai-Yi Investment Co.,Ltd.	1,159,158	0.50%	628,812	0.27%	0	0.00%
Liu,Bo-Wen	4,125,000	1.77%	0	0.00%	0	0.00%	N/A	N/A
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds	4,030,391	1.73%	0	0.00%	0	0.00%	N/A	N/A
Cathay Life Insurance Company,Ltd.	3,965,000	1.70%	0	0.00%	0	0.00%	N/A	N/A

1List all top ten shareholders, a legal person shareholder shall list the name of the legal person shareholder and the name of the representative separately.

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

• 47 -

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

Company
	December 31,2019
Re-Invested Enterprise1	Company Investment		Investments by the Company, Directors, Supervisors, Executives, or Enterprises under Direct/ Indirect Control of the Company2		Consolidated Investments
	Shares	%	Shares	%	Shares	%
SINBON International Enterprise Co., Ltd	-	100.00%	-	-	-	100.00%
Hong Kong SINBON Electronics Co., Ltd.	-	100.00%	-	-	-	100.00%
Kwan-Ze Co., Ltd.	23,560,000	100.00%	-	-	23,560,000	100.00%
Top Taiwan Venture Investment	2,240,000	20.00%	-	-	2,240,000	20.00%
Argosy Research	2,945,034	3.59%	14,624,200	17.81%	17,569,234	21.40%
Beijing SINBON Tongan Electronics Co., Ltd.	-	100.00%	-	-	-	100%
SINBON USA L.L.C	-	100.00%	-	-	-	100.00%
Radbon Avionics Inc.	3,300,000	55.00%	-	-	3,300,000	55.00%
SINBON Europe GmbH	-	100.00%	-	-	-	100.00%
T-Conn Precision Co., Ltd.	15,577,522	61.18%	-	-	15,577,522	61.18%

1Investments by the equity method.

2Investments in Kwan-Ze.

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

• 48 -

4. Fundraising

4.1. Capital and Shares

4.1.1. Capitalization

Month/Year	Issue Price	Authorized Shares/Capital	Authorized Shares/Capital	Capital Stock	Capital Stock	Remarks
		Shares (1K)	Amount (NT$1K)	Shares (1K)	Amount (NT$1K)	Sources of Capital (NT$1K)	Non-cash Capital Increase (NT$1K)	Others (NB)
Dec. 1989	10	500	5,000	500	5,000	Establishment with cash at 5,000.	None	N/A
Jun. 1991	10	1,300	13,000	1,300	13,000	Cash capital increase at 6,000.	Shareholder	N/A
							transactions
							at 2,000.
Dec. 1994	10	2,900	29,000	2,900	29,000	Cash capital increase at 5,000.	Liability	N/A
							11,000.
Sep. 1995	10	9,900	99,000	9,900	99,000	Cash capital increase at 70,000.	None	N/A
Dec.1997	10	19,800	198,000	19,800	198,000	－	Consolidated	N/A
							increase
							99,000.
Sep. 1998	10	50,000	500,000	30,000	300,000	Cash capital increase at 64,560. Amortization of premiums at 11,880. Capital surplus transferred to capital at 23,760. New share issue through capitalization of employee bonus at 1,800.		1
							None
Sep. 1999	10	50,000	500,000	40,000	400,000	Cash capital increase at 37,000. Amortization of premiums at 30,000. Capital surplus transferred to capital at 30,000. New share issue through capitalization of employee bonus at 3,000.		2
							None
Jul. 2000	10	50,000	500,000	46,800	468,000	Amortization of premiums at 44,000. Capital surplus transferred to capital at 16,000. New share issue through capitalization of employee bonus at 8,000.		3
							None
Nov. 2000	10	50,000	500,000	50,000	500,000	Cash capital increase at 32,000.	None	4
Jun. 2001	10	90,000	900,000	61,500	615,000	Amortization of premiums at 100,000. New share issue through capitalization of employee bonus at 15,000.		5
							None
Mar. 2002	10	150,000	1,500,000	70,798	707,981	Conversion with convertible bonds at 92,981.	None	6
Aug. 2002	10	150,000	1,500,000	88,213	882,132	Amortization of premiums at 141,596. New share issue through capitalization of employee bonus at 20,000. Conversion with convertible bonds at 12,555.		7
							None
Oct. 2002	10	150,000	1,500,000	89,849	898,489	Conversion with convertible bonds at 16,357.	None	6
Oct. 2002	10	150,000	1,500,000	90,028	900,279	Conversion with convertible bonds at 1,790.	None	8
Jan. 2003	10	150,000	1,500,000	90,455	904,554	Conversion with convertible bonds at 4,275.	None	6
Mar. 2003	10	150,000	1,500,000	90,578	905,780	Conversion with convertible bonds at 1,226.	None	6
Jun. 2003	10	190,000	1,900,000	100,336	1,003,358	Amortization of premiums at 17,516. New share issue through capitalization of employee bonus at 10,000. Capital surplus transferred to capital at 70,062.		9
							None
Aug. 2003	10	190,000	1,900,000	101,700	1,016,997	Conversion with convertible bonds at 13,638.	None	6
Sep. 2003	10	190,000	1,900,000	101,797	1,017,971	Conversion with convertible bonds at 974.	None	6
Jul. 2004	10	190,000	1,900,000	106,797	1,067,969	Amortization of premiums at 45,999. New share issue through capitalization of employee bonus at 4,000.		10
							None
Aug. 2004	10	190,000	1,900,000	107,010	1,070,103	Conversion with convertible bonds at 2,134.	None	6
Jul. 2005	10	240,000	2,400,000	131,970	1,319,695	Amortization of premiums at 230,016. Capital surplus transferred to capital at 19,576.		11
							None
Aug. 2005	10	240,000	2,400,000	146,281	1,462,811	Conversion with convertible bonds at 143,115.		6
							None
Nov. 2005	10	240,000	2,400,000	150,139	1,501,392	Conversion with convertible bonds at 38,581.	None	6

• 49 -

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
May. 2012	10	450,000	4,500,000	180,887	1,808,865	Conversion with convertible bonds at 13,704.	None	17
Jul. 2012	10	450,000	4,500,000	180,928	1,809,282	Conversion with convertible bonds at 417.	None	17
Nov. 2012	10	450,000	4,500,000	200,015	2,000,155	Conversion with convertible bonds at 190,873.		17
							None
Apr. 2013	10	450,000	4,500,000	207,671	2,076,709	Conversion with convertible bonds at 76,554.	None	17
May. 2015	10	450,000	4,500,000	207,956	2,079,563	Conversion with convertible bonds at 2,854.	None	18
Aug. 2015	10	450,000	4,500,000	211,109	2,111,090	Conversion with convertible bonds at 31,528	None	18
Sep. 2015	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
May. 2016	10	450,000	4,500,000	217,934	2,179,342	Conversion with convertible bonds at 2,888	None	18
Aug. 2016	10	450,000	4,500,000	217,958	2,179,585	Conversion with convertible bonds at 243	None	18
Sep. 2016	10	450,000	4,500,000	224,495	2,244,949	Capital surplus transferred to capital at 65,364	None	20
Nov. 2016	10	450,000	4,500,000	224,607	2,246,068	Conversion with convertible bonds at 1,119	None	18
Mar. 2017	10	450,000	4,500,000	225,416	2,254,161	Conversion with convertible bonds at 8,093	None	18
Nov. 2018	10	450,000	4,500,000	225,727	2,257,273	Conversion with convertible bonds at 3,112	None	21
Mar. 2019	10	450,000	4,500,000	226,695	2,266,954	Conversion with convertible bonds at 9,681	None	21
Apr. 2019	10	450,000	4,500,000	229,075	2,290,745	Conversion with convertible bonds at 23,791	None	21
Jun. 2019	10	450,000	4,500,000	229,297	2,292,974	Conversion with convertible bonds at 2,229	None	21
Sep. 2019	10	450,000	4,500,000	232,524	2,325,237	Conversion with convertible bonds at 32,263	None	21
Dec. 2019	10	450,000	4,500,000	232,669	2,326,693	Conversion with convertible bonds at 1,456	None	21
Mar. 2020	10	450,000	4,500,000	232,777	2,327,774	Conversion with convertible bonds at 1,081	None	21

NB 1: Approved by Letter (87) FSC no.(1) 47522 issued by the Securities and Futures Commission, Ministry of Finance, on 6 June 1998.

NB 2: Approved by Letter (88) FSC no.(1) 56082 issued by the Securities and Futures Commission, Ministry of Finance, on 20 June 1999.

NB 3: Approved by Letter (89) FSC no.(1) 58816 issued by the Securities and Futures Commission, Ministry of Finance, on 7 July 2000.

NB 4: Approved by Letter (89) FSC no.(1) 81883 issued by the Securities and Futures Commission, Ministry of Finance, on 2 October 2000.

NB 5: Approved by Letter (90) FSC no.(1) 123711 issued by the Securities and Futures Commission, Ministry of Finance, on 7 May 2001.

NB 6: Approved by Letter (90) FSC no.(1) 166362 issued by the Securities and Futures Commission, Ministry of Finance, on 9 November 2001.

NB 7: Approved by Letter (91) FSC no.(1) 0910139537 issued by the Securities and Futures Commission, Ministry of Finance, on 16 July 2002.

NB 8: Approved by Letter (91) FSC no.(1) 0910133858 issued by the Securities and Futures Commission, Ministry of Finance, on 27 June 2002.

NB 9: Approved by Letter (92) FSC no.(1) 0920126156 issued by the Securities and Futures Commission, Ministry of Finance, on 13 June 2003.

• NB 10: Approved by Letter (93) FSC no.(1) 0930121806 issued by the Securities and Futures Commission, Ministry of Finance, on 18 May 2004.

• NB 11: Approved by Letter FSC no.(1) 0940119716 issued by the Financial Supervisory Commission, Executive Yuan, on 18 May 2005.

• NB 12: Approved by Letter FSC no.(1) 0950130935 issued by the Financial Supervisory Commission, Executive Yuan, on 17 July 2006.

• 50 -

• NB 13: Approved by Letter FSC no.(1) 0960032589 issued by the Financial Supervisory Commission, Executive Yuan, on 28 June 2007.

• NB 14: Approved by Letter FSC no. (1) 0970033372 issued by the Financial Supervisory Commission, Executive Yuan, on 4 July 2008.

• NB 15: Approved by Letter FSC no. (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 FSC no. 090018240 issued on 4 May 2010 and Letter FSC no. 1000060425 issued on 21 December 2011 by the Financial Supervisory Commission, Executive Yuan.

• NB 18: Approved by Letter FSC no. 1030017865 issued by the Financial Supervisory Commission, on 26 May 2014.

• NB 19: Approved by Letter FSC no. 104002851 issued by the Financial Supervisory Commission, on 28 July 2015.

• NB 20: Approved by the Financial Supervisory Commission, on 18 July 2016.

NB 21: Approved by Letter FSC no. 1060014871 issued by the Financial Supervisory Commission, on 10 May 2017.

Unit: Shares

				Unit: Shares
Share Type	Authorized Shares/Capital			Remarks
	Externallycirculated shares1	Unissued Shares	Total
Common Share	Listed shares 232,777,468	217,222,532	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).

4.1.2. Shareholder structure

	14 April,2020	14 April,2020	14 April,2020
Shareholder Structure	Amount	Shares Held	Percentage
Government Agencies	4	4,327,510	1.86 %
Financial Institutions	75	33,288,788	14.30 %
Other Corporations	192	13,937,689	5.99 %
Foreign Institutions and Individuals	273	107,230,448	46.06 %
Individuals	36,967	73,993,033	31.79 %
Others	0	0	0.00 %
Subtotal	37,511	232,777,468	100.00 %

4.1.3. Share distribution

4.1.3. Share distribution	4.1.3. Share distribution	4.1.3. Share distribution	4.1.3. Share distribution
14 April,2020
Shares Held Grading	Number of Shareholders	Shares Held	Percentage
1 ~ 999 1,000 ~ 5,000 5,001 ~ 10,000 10,001 ~ 15,000 15,001 ~ 20,000 20,001 ~ 30,000 30,001 ~ 40,000 40,001 ~ 50,000 50,001 ~ 100,000 100,001 ~ 200,000 200,001 ~ 400,000 400,001 ~ 600,000 600,001 ~ 800,000 800,001 ~ 1,000,000 1,000,001 ~999,999,999 Above 1,000,000,000	28,716 6,752 847 372 132 178 95 64 122 76 61 31 7 13 45 0	989,487 11,937,033 6,080,565 4,441,285 2,314,502 4,384,897 3,323,817 2,864,633 8,535,244 10,420,567 17,430,115 15,592,251 4,945,737 11,400,721 128,116,614 0	0.42 % 5.13 % 2.61 % 1.91 % 0.99 % 1.88 % 1.43 % 1.23 % 3.67 % 4.48 % 7.49 % 6.70 % 2.12 % 4.90 % 55.04 % 0.00 %
Total	37,511	232,777,468	100.00 %

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4.1.4. List of major shareholders

.1.4. List of major shareholders
Shares Major Shareholder	Shares Held	Percentage
Fubon Life Insurance Co.,Ltd.	13,872,167	5.96%
Aberdeen Standard OEIC II- ASI Global Smaller Companies Fund	7,745,000	3.33%
Deutsche Bank Deutsche Bank Taipei Branch entrusted with the Brei Global Fund - Berri Asia Japan Excluding Small Companies EquityFunds	7,659,000	3.29%
Joseph Wang	7,508,062	3.23%
Swedbank Robur Globalfond	5,107,000	2.19%
Columbia Acorn Trust - Columbia Acorn International	4,366,000	1.88%
Tai-Yi Investment Co.,Ltd.	4,130,572	1.77%
Liu,Bo-Wen	4,125,000	1.77%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds	4,030,391	1.73%
CathayLife Insurance Company,Ltd.	3,965,000	1.70%

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	2018	2019	By 31 Mar. 20208
Market price per share1	Highest		92.40	138.50	140.00
	Lowest		74.80	79.70	91.90
	Average		82.73	112.23	125.80
Net value per share2	Before distribution		28.99	31.31	34.24
	After distribution		24.49	Undistributed	Undistributed
EPS	Weighted average(shares)		225,685,000	230,104,000	232,730,000
	EPS3	Adjusted	6.26	7.47	1.93
		Unadjusted	N/A	N/A	Undistributed
Dividends per share	Cash dividends		4.50	5.30	Undistributed
	Dividends for capital surplus		-	-	Undistributed
	Stock Grants	-	-	-	Undistributed
		-	-	-	Undistributed
	Accumulative undistributed dividends4		-	-	Undistributed
ROI	Price/Earnings Ratio5		13.22	15.02	65.18
	Price/Dividends Ratio6		18.38	21.18	Undistributed
	Cash Dividends Yield7		5.44%	4.72%	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 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.

• 52 -

• 4.1.6. Dividends policy and implementation

• (1) Dividends policy:

  • The Company shall, when the general final accounting of the fiscal year shows a earning, after having paid all taxes and dues and made adjustments in accordance with the Financial Accounting Standards, first have its losses been covered. At the time of allocating surplus profits, first set aside ten percent of such profits as a legal reserve. However, when the legal reserve amounts to the authorized capital, this shall not apply. It shall set aside or reverse another sum as special reserve in accordance with the regulation. The remaining balance, if any, plus the accumulated retained earnings of prior years as accumulated distributable earnings, except for retaining part or all of the amount depending on business conditions, and resolved in the shareholders’ meeting for shareholders’ dividends.

For long-term capital planning, the Company currently is in growth stage, so shareholders’ cash dividends shall not be less than 10% of total dividends. In 2018 shareholder’s meeting, it will be modified to: The Company shall…The remaining balance, if any, plus the accumulated retained earnings of prior years as accumulated distributable earnings, except for retaining part or all of the amount depending on business conditions, at least 50% of the current year’s net income should be distributed.

(2) Implementation dividends distribution planned at the annual shareholders’ meeting 2019 is as follows:

Dividends Type	Amount per Share	Source	Status
Cash dividends	4.50	Retained earnings 4.50	Distributed on 28 Aug.,2019
Stock dividends	0.00	N/A	N/A
Total	4.50

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

• (1) Effect on business performance: None.

• (2) Effect on EPS: None.

• 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) 1% to 15% as employee bonus; and

  • 2) ot more than 3% as remuneration to directors and supervisors; Prior years’ operation losses shall be reserved first.

• 53 -

Employees’ compensation including subsidiaries’ employees may be distributed through issuance of new shares of the Company or cash.

• (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: No difference and all paid by cash.

• (3) Employee profit and remunerations for directors and supervisors

information passed by the board in this year:

Employeeprofits	Employeeprofits	Remunerations for directors and supervisors (NT$)	The percentage of stock profit in total employee profits and the percentage in earningafter tax
Cash (NT$)	Stock (NT$)
30,000,000	0	17,350,000	-

There are no differences between plan and actual distribution.

• (4) Distribution of employee profit and remunerations for directors and

supervisors in last year:

supervisors in lastyear:	supervisors in lastyear:
Employeeprofits		Remunerations for directors and supervisors (NT$)	The percentage of stock profit in total employee profits and the percentage in earningafter tax
Cash (NT$)	Stock (NT$)
24,000,000	-	15,300,000	-

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

4.1.9. Repurchase of corporate shares

30 April, 2020

Repurchase of corporate shares	30 April,2020
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

• 54 -

4.2. Corporate bonds

4.2.1. Corporate bonds

rporate bonds 1. Corporate bonds	rporate bonds 1. Corporate bonds
Corporate Bond Type2		Domestic Unsecured Convertible Bonds VI5
Issue date		June 8,2017
Face value		NT$100,000
Place of issue and transaction3		N/A
Issue Price		NT$100
Total amount		NT$500,000,000
Interest rate		0%
Expiry		3years,until June 8,2020
Guarantee organization		No.
Trustee		Taishin Bank
Underwritingagency		Taishin Securities
Certified lawyer		Kang-De Lu
CPA		Tzu-PingHuangand Hong-KuangLin
Reimbursement method		Principal in one time on expiry
Outstandingamount		NT$246,900,000
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.		The 6th domestic unsecured convertible bonds all converted into common stock and will stop tradingin OTC since 2020/03/13.
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.

• 55 -

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

Bond Type1		Fifth-time Domestic Unsecured Convertible Corporate Bonds	Fifth-time Domestic Unsecured Convertible Corporate Bonds
Item	Year	2019	Until 31 Mar. 20204
Market price of bonds2(NT$)	Highest	206.00	205.00
	Lowest	117.00	187.00
	Average	136.00	198.13
Conversionprice(NT$)		66.60	66.60
Issue date		8 June 2017
Conversion Price at issue (NT$)		76.60
Conversion obligation3		New issued shares

• 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

• 56 -

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. IG03010 Energy Technical services

20. F401010 International Trade

21. ZZ99999 All business items that are 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 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.

• a. Current state and developments of the industry:

• According to data from the Industry, Science and Technology International Strategy Center (ISTI), there are growing opportunities for global connector market in applications such as smartphones, automobiles and video game console…etc. In the future, the connector applications will be driven by the increasing needs of automotive electronics and high-speed communication. Many business opportunities for high-frequency transmission connectors would arise.

• 57 -

If we actively deploy high-frequency transmission materials and process technologies required for mid-to-high-end related connectors in the future, we will be able to grasp the next stage of IoT market, including advanced driver assistance systems for vehicles and the rise of derivative image sensor module integration connector products demand, etc.

The future trend of AIoT technology combined with the surge of 5G will introduce more connector development opportunities at the application level. As of mid-December 2019, products supporting 5G network include mobile phone connectors, drones, robots, switches, USB terminals, etc. In the future, 5G devices will become more popular, functional, and affordable, and the potential market for connectors will become increasingly popular and diverse.

By the end of 2020, Qualcomm expects that the 5G industry will be different to a certain extent compared to the current level. More telecommunications companies will accelerate the deployment of 5G services. As a result, augmented reality (AR) / virtual reality (VR), self-driving cars, and telemedicine will also go hand in hand with mobile networks.

b. Supply chain relationship:

SINBON not only a connector distributor, but also provide cable assembly and PCBA design and processing services. We provide vertical integration service to our customers and able to supply bare cooper wires, plastics, electroplating materials, etc. Our company manufactures, sells, and distributes electronic component products with a wide range of applications. They can be separated into five major industries with the abbreviation of MAGIC.

Connector Supply Chain

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• c. 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

Global Patient Monitoring Devices Market Overview

A patient monitoring device is a device that monitors the physiological parameters of patients and assists physicians in examining changes in status, and emergency alerts. Terminal applications include cardia monitoring,

• 58 -

neurological monitoring, hemodynamic monitoring, fetal and neonatal monitoring, and more. According to a report published by Global Market Insight in 2019, the global market size for patient monitoring devices was approximately USD 19.5 billion in 2018. It is expected that the CAGR from 2019 to 2025 will be 5.1% with market size of over USD 27 billion by 2025.

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According to research by Allied Market Research, the trend of the aging population coupled with tense urban life has increased the number of chronic diseases and cancer patients, promoting the demand for patient monitoring devices. The development of new technology has helped patient monitoring to be real-time and more accurate. For example, remote care devices can provide real-time pathological data to physicians in another location. Combined with medical risk prediction models created by big data analysis, the device can lead to a more accurate diagnosis.

Global Smart Healthcare Market Overview

According to Meticulous Research’s forecast, the global IoT medical industry market size will be USD 66.94 billion in 2019 and will grow to USD 322.17 billion in 2025, with CAGR of 29.9% from 2019 to 2025. In terms of product categories, 34.7% is medical equipment, 26.1% is systems and software, 17.9% is network communication technology, and 21.2% is other services. By 2025, the proportion of “system and software” will see the most growth as the application of information communication technology (ICT) in medical products will increase.

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Based on the definition of the World Health Organization (WHO), the application of ICT in the field of medical healthcare is broadly referred to as “smart healthcare,” which covers medical care, disease management, and public health monitoring. Smart healthcare will assist traditional healthcare to become more customized and precise. Therefore, traditional healthcare device manufacturers such as Medtronic, Abbott, and GE will invest in the development of IoT integrated medical devices. On the other hand, IT companies such as Google and Amazon will also take advantage of software engineering to gain market share in the medical devices market in the future.

(2) Automotive & Aviation

Global Electric Vehicle Market

The global automobile market declined slightly in 2019, with total sales remaining at 90 million units, however, electric vehicles continued to see growth in less favorable market trends. With increasing awareness of energy conservation and carbon reduction as well as supportive government policies in many countries, electric vehicles sold over 5 million units in 2019, reaching 6% of total sales. The proportion is expected to surpass 10% in 2021. Among these, hybrid electric vehicles (HEV) continued to provide a solid sales base in 2019 as they have the characteristics that do not require users to change current driving habits. HEVs account for about 54.2% of the total sales of electric vehicles and battery electric vehicles (BEV) account for about 33.3%.

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The top three global electric vehicle sales in 2019 are China (29.0%), Japan (28.4%), and the United States (16.1%). Countries with the largest sales growth are Germany (54.4%), Sweden (53.3%), and Israel (53.2%). These three countries have announced that they will completely ban fuel vehicles in 2030. Major automobile component manufacturers can take advantage of their respective supply chain resources and find suitable entry points to the electric vehicle market.

Supported by the sales of HEVs, Toyota Group remained on top based on sales volume. The top three sales groups are Toyota (29.0%), Nissan (28.4%), and Honda (16.1%). Despite being at the top, Toyota’s market share has been taken away by latecomers in a market with fierce competition. Among the latecomers, the companies with the largest market share growth are Kia (37.2%), BYD (36.2%), and Tesla (33.2%).

• 60 -

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Civil Aircraft Market in Taiwan and Worldwide

PwC research states that the average growth rate of the global economy from 2009 to 2019 is about 2.2%, and the global aerospace manufacturing market output value has a steady growth rate of 4% per year. Rank in order, countries that are most attractive to the aerospace industry are the United States, Canada, Singapore, Switzerland, the United Kingdom, the Netherlands, Australia, Germany, Hong Kong, and Japan. In recent years, the average growth rate of the aerospace industry in Taiwan has been about 8%. Coupled with policy encouragement, the future development of the aerospace industry is booming.

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However, the aerospace industry also has intense competition globally. Emerging manufacturers from Mexico, Turkey, Malaysia, and other countries have competitive advantages in low labor costs and government incentives. At the same time, advanced countries continue to improve productivity and efficiency through technological innovations, and request suppliers to reduce costs. These are all the challenges that other country’s aerospace industry will encounter in 2020.

Boeing estimates the demand for new aircraft in the next two decades will be valued at USD 6 trillion; of which, the demand for single-aisle aircraft continues to dominate, accounting for 75% of the total new aircraft demand. The demand for wide-body aircraft will see much rapid growth and the number is expected to be tripled. Benefited from the rise of emerging markets and global e-commerce markets, the cargo aircraft segment is expected to grow by 4.2% in the next 10 years.

It is worth noting that in order to move towards the goal of pollution reduction in the aerospace industry, many companies have been actively investing in the research and development of hybrid-electric aircraft. Airbus, Siemens, and

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Rolls-Royce have jointly developed hybrid-electric aircraft called “E-Fan X,” which is expected to be commercialized in 2025. Seattle-based startup Zunum Aero has obtained investment from Boeing and Jet Blue to develop small hybrid-electric passenger aircraft for regional routes, realizing the development trend for electric-powered short-range fleets. However, the current capacity and capability of hybrid-electric aircraft are far lower than that of traditional aircraft. It is estimated that the hybrid technology may be practically applied to commercial aircraft by 2030.

(3) Green Energy

Global Renewable Energy Market Overview

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In June 2019, REN21 published the “Renewables 2019 Global Status Report.” Looking back on renewable energy development in 2018, the total global investment in renewable energy and fuels was USD 288.9 billion, a decrease of 11% compared with the previous year. With the steady increase in power generation from renewable energy, the decrease in investment reflects, to a certain extent, a reduction in costs of renewable energy as more power can be generated with less investment. Renewable energy accounts for 26.2% of global electricity production, of which hydropower is 15.8%, wind power is 5.5%, solar power is 2.4%, and biomass energy is 2.2%, showing that renewable energy has become the mainstream power source.

Wind Power Market Overview

In 2018, China and the United States were still the two largest markets for onshore wind power, with newly installed capacities of 21.2 GW and 7.6 GW, respectively. Europe ‘s newly installed capacity was only 9GW, 32% less than in 2017. The onshore wind market in Africa, the Middle East, Latin America, and Southeast Asia has grown rapidly, with a total capacity of 4.8 GW installed in 2018.

The offshore wind power market will expand globally in the next five years, especially in Asia. It is predicted that China will significantly increase its installed capacity in 2021-2022. If there is no significant economic growth in Southeast Asia, wind power development will remain at an intermediate level. North America currently accounts for about 8% of the global capacity and will

• 62 -

increase to 22% by 2023. The European offshore wind market is mature and will maintain market share steadily in the future. GWEC predicts that over 300 GW capacity will be added in the next five years, which means onshore and offshore wind power will increase over 55 GW capacity each year by 2023.

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Solar Photovoltaic Market

In 2018, the newly added capacity of solar photovoltaic devices reached 102.4 GW. Although the growth rate is only 4% from 2017, it is the first time for annual capacity added to exceed 100 GW. China is still the world’s largest solar photovoltaic market, with a newly installed capacity of 44.4 GW in 2018. The United States, the second-largest market, only added 10.6 GW, less than 1/4 of China’s.

Global demand for solar photovoltaic will continue to increase, growing by 12% in 2020 and 6% in 2023. Based on conservative estimation, the global solar photovoltaic installed capacity will exceed 1 TW in 2022.

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Supported government policies, India will become the second-largest market in the world in five years. It is estimated that it will add 90 GW of capacity between 2019 and 2023. The United States has extended tax reduction for solar energy investments in 2015. This has led to the installation of solar power devices on residential and commercial buildings as well as increase the

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commercial purchase of renewable energy, which has increased power generation by 70 GW. On the other hand, Turkey is considered a country that is not suitable for solar power development due to climate change, economic crisis, and weakened political support.

(4) Industrial Application

Global Semiconductor Equipment Market

The global semiconductor equipment market has seen substantial growth from 2017 to 2018. Although the growth rate in 2019 is less than the previous two years, the demand is driven by 5G and high-performance computing (HPC). Foundries have adopted 7nm and more advanced process, the semiconductor market is showing signs of recovery. It is estimated that the level of spending in 2019 is similar to that in 2017.

Looking ahead to 2020, with the expansion of smartphones, data centers, and cloud services, as well as increasing demand for various 5G networking such as automotive IC chips and various fields, the development of AI, deep learning, and VR products is growing. In 2020, NAND flash memory and DRAM will see more robust growth. However, international trade conflicts may limit the growth rate for the semiconductor market.

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Global Industrial Robot Market

Global enterprises have been supporting and advocating smart factories. Currently, most of the factory automation production lines run on “man-machine division,” that is, labors and machines focus on separate duties and do not communicate with each other. For example, robotic arms and light-off factories both aim for 100% automation. However, an experiment conducted by the Massachusetts Institute of Technology (MIT) research team showed that the ” Human-robot collaboration (HRC)” team is more efficient

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than robots in pure AI applications or a human-only team. HRC can even reduce staff idle time by 85%, which greatly reduces the cost for enterprises.

HRC refers to the process of continuously improving the workflow through the exchange of experience and work between humans and robots. The collaboration is formed as the robot can perform operations according to the information and processes set up by humans, and humans can make an adjustment based on the output.

Nowadays, the manufacturing industry emphasizes the Cyber-Physical System (CPS). Under the HRC model, manufacturers will no longer deploy robotic arms automation only based on measures, combinations, and controls set by humans, they must start from human-robot collaboration. The robot industry market size is expected to reach USD 27 billion by 2025. It is worth mentioning that the global market size of collaborative robots is expected to increase significantly, reaching USD 3.828 billion in 2025, which is 7 times the size of 2018.

(5) Communication

Global Smartphones Market

The smartphone industry has become mature. Global smartphone sales in 2019 declined slightly compared to 2018. It is expected that by 2020, 5G services will be available in various countries, 5G coverage and related hardware services will gradually improve, which will increase the willingness of consumers to switch smartphones. Many new 5G smartphone models are also expected to be available in 2020, including the first Apple iPhone that supports 5G. The start of the 5G era is expected to provide growth momentum for smartphone sales.

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Global Electric Bicycle Market

The mainstream development trends of the global bicycle industry are lightweight, motorization, AI and IoT, sharing, and servitization. Among these trends, major bicycle manufacturers currently focus on the development of motorization and IoT. It can be seen from global sales that the market penetration rate of electric bicycles is expected to increase on an annual basis.

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The market size of the global electric bicycle market is expected to reach USD 23 billion by 2025 from approximately USD 16 billion in 2017, reflecting a CAGR of approximately 4.9% with an optimistic outlook.

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Global Smart Wearables Market

Broad definitions of smart wearable products include smartwatches, smart bracelets, smart clothes, head-mounted devices, ear-mounted devices, etc. With the smartphone manufacturers putting mobile phone functions such as LINE and email to smartwatches and smart bracelets, it has attracted more and more manufacturers to enter the smart wearables market. For example, Facebook entering the head-mounted device market, textile industry working with tech firms to develop smart clothes. Even luxury brands have launched smartwatches to hold market share to the wrist wear market, further expanding the smart wearables market.

The global smart wearable market will sell about 220 million units in 2019, and it is expected to grow to 300 million units by 2023, a CAGR of about 7.9% with promising upside potential.

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d. 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

• 66 -

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 electronics 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: Fubon Securities.

5.1.3. Technology & R&D:

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

• 67 -

Year Results of R&D 2018~Now 1. AIOT (Artificial Intelligence of Things) 2. Smart Heat pump water heater, display system of parking.

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

• 5.1.4. Long and short-term business development plan:

• 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.

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

  • (2) Important production and sales policies:

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

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

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

• 68 -

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

• Long-term business development plan:

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

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

• (3) Strategic alliance, mergers and acquisitions: SINBON 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:

.1. Market analysis:	.1. Market analysis:	.1. Market analysis:	.1. Market analysis:	.1. Market analysis:	.1. Market analysis:	.1. Market analysis:	.1. Market analysis:
Sales Region			FY 2018		FY 2019
			Amount	%	Amount	%
Domestic Sales			780,945	4.99	1,028,200	5.75
Export Sales	U.S.		2,414,415	15.43	3,344,293	18.70
	Europe		1,197,833	7.66	1,199,264	6.70
	China		9,269,754	59.25	10,105,185	56.50
	Other		1,982,306	12.67	2,209,228	12.35
Total			15,645,253	100.00	17,886,170	100.00
.2. Key product applications andproductionprocess:
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 electronicproducts.					1. Cable trimming and stripping 2. Crimping 3. Assembly, stamping 4. Inspection 5. Packaging
Energy products		Manufacture and sale ofpower rectifier.
Wireless communications		Mobile phone link cable, mobile phone connector, wireless antenna,RFID.

5.2.2. Key product applications and production process:

• 69 -

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

5.2.3. Supply of key raw materials:

Material Name	Supplier	SupplyStatus
Connector	Hirose,NDK	Good,stable
Cable	HWATEK、Staubli、Jiangzhou Copper	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:

• Customers: There are no customers that accounted for over 10% of total sales

  • in any year within the last two years

2. Suppliers:

		2. Suppliers:	2. Suppliers:	2. Suppliers:
										Expressed in Thousands of NTD
		FY 2018				FY 2019				FY 2020 Q1
Item	Name	Amount	Proportion of Net Purchases for the Year (%)	Relationship to Publisher	Name	Amount	Proportion of Net Purchases for the Year (%)	Relationship to Publisher	Name	Amount	Proportion of Net Purchases as of Preceding Quarter this Year	Relationship to Publisher
1	Supplier A	1,321,315	12.63	None	Supplier A	1,413,105	11.91	None	Supplier A	336,579	12.06	None
2	Supplier B	1,179,175	11.27	None	Supplier B	1,090,542	9.19	None	Supplier B	247,749	8.88	None
3	Others	7,962,857	76.10	-	Other	9,358,372	78.90	-	Other	2,206,311	79.06	-
	Net Purchases	10,463,347	100.00	-	Net Purchases	11,862,019	100.00	-	Net Purchases	2,790,639	100.00	-

Reason for Change: Amount of purchases increased from Supplier A was due to increase in sales.

• 70 -

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

Unit: 1000 pcs; Expressed in Thousands of NTD

Year By major product (or by department) Production Quality		2018	2018		2019	2019
	Production Capacity	Production Output	Production Value	Production Capacity	Production Output	Production Value
Cable Assembly	-	125,475	9,616,698	-	216,400	14,203,308
Connector	-	149,817	700,840	-	112,504	642,832
Other	-	-	-	-	-	-
Total	-	275,292	10,317,538	-	328,904	14,846,140

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:

Unit: 1,000 pcs; Expressed in Thousands of NTD

					Unit: 1,000pcs;Expressed in Thousands of NTD	Unit: 1,000pcs;Expressed in Thousands of NTD	Unit: 1,000pcs;Expressed in Thousands of NTD	Unit: 1,000pcs;Expressed in Thousands of NTD
Year By major product (or by department) Production Quality	2018				2019
	Domestic Sales		Export Sales		Domestic Sales		Export Sales
	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value
Cable	5,346	566,614	101,755	10,784,793	5,595	751,360	91,739	12,319,017
Connector	65,697	205,567	1,250,466	3,912,713	87,917	263,246	1,441,457	4,316,087
Others	406	8,764	7,732	166,802	532	13,593	8,723	222,867
Total	71,449	780,945	1,359,953	14,864,308	94,044	1,028,199	1,541,919	16,857,971

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:

	Year	2018	2019	As of March 31, 2020
No. of Employees	Direct employee	3,468	3,745	4,081
	Indirect employee	1,645	1,796	1,809
	Total	5,113	5,541	5,890
Average Age		30.12	30.84	31.33
Average Seniority		3.52	3.16	3.25
Distribution of Academic Background	Post-Graduate	0.02%	0.02%	0.02%
	Graduate	1.86%	2.10%	1.94%
	College/University	24.88%	27.34%	26.54%
	High School	32.62%	31.38%	29.00%
	Below High School	40.62%	39.14%	42.50%
	Total	100.00%	100.00%	100.00%

• 71 -

5.4. Environmental expenditure:

• (1) The 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: NTD$ 66,000.

• (2) Future response strategies and potential costs:

• The reason for punitive damages last year: Waste generated by our new factory exceeded the upper limit that can combine with the original factory to report to the government and the Company didn’t report in time. The declaration was completed immediately and the internal management regulations were revised to avoid the recurrence of similar situations.

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

• The cooling water used in chillers used by the factory during production is recycled. The cooling water is channelled 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 of 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. Labour 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 Labour Insurance and National Health Insurance: All employees are enrolled by the company in Labour Insurance and National Health Insurance by the company from the day they start to protect their rights.

• 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.

  • In 2019, employees’ family members are enrolled in group insurance including injury medical and hospital cover insurance. Employees can apply for their spouse and children. The insurance costs are fully paid by the company.

• 72 -

• 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 labour safety and health regulations.

• 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.

• 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. A. Cash gifts and subsidies for weddings, funerals and celebrations.

3. B. Regular employee holidays.

4. C. Organization of various club activities to promote labour communications and harmony.

5. D. Gifts of cash or goods for holidays, celebrations and birthdays.

6. E. Discount programs with many merchants to provide employees with discounts and promotions.

7. F. Hospitalization, treatment and disaster assistance.

8. G. Employee in-service education scholarships.

9. H. Hosting of professional workshops at different times.

10. Employee retirement scheme:

The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labour Pension Act of the R.O.C. Under the Labour 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. Pension expenses under the defined contribution plan for the years ended 31 December 2019 and 2018 were NT$21,968 thousand and NT$20,605 thousand, respectively.

The Ministry of Labour is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labour 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 Labour 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

• 73 -

assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19.The Group expects to contribute NT$4,560 thousand to its defined benefit plan during the 12 months beginning after 31 December 2019.

1. Free parking:

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

1. Some leave regulations that better than the Labour Standards Act:

   • A. Employee maternity/paternity leave: the company offers 61 days off for maternity leave where the legal requirement is 56 days.

   • B. "Caregiver leave for seriously ill/injured parents or spouse" added that is superior to the Labour 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.

   • C. Paid leaves: there are extra 7-day paid leaves for employees.

2. (2) Losses due to labour 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	StartingDate	Summary	Restrictions
Supplier Contract	G	2018.1.1~ 2020.12.31	To be customer G’s medical & green energy products supplier.	None
Confidentiality Agreement	N	2017.3.13~ 2020.3.13	Our Company is an OEM contractor for Company N, a large foreign medical company. A confidentiality agreement was signed to protect Company N's R&D info and ourproduction know-how.	None
Supplier Contract	P	2017.08.22~ Contract end date	Co-developing moulds with company P, signed the contract to ensure that our intellectual property rights and the right to use.	None
Agency Agreement	C	2015.7.15 ~	To be an agent for selling products of company C.	None
MOU	E	2016.11.18~	We help company E to create more production and E shallpromisepurchasequantity.	None
Supplier Contract	A	2018.1.25	Supplycontract with companyA.	None
Commission Contract	P	2017.12.26	Commission contract with company P.	None
Design Contract	M	2017.8.18	Co-developing products with companyM.	None
Manufacture Contract	R	2018.03.22	Manufacturing products for company R.	None
Manufacture Contract	A	2019.07.01~	Manufacturing products for company A.	None
Component SupplyContract	A	2019.09.12~	Manufacturing components for company A.	None

• 74 -

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)

		Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD
Year Item		Five-Years Financial Information					Financial data of ending date in the current year on 31 Mar. 2020 （Reviewed Only）
		2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Current assets		8,530,755	8,807,101	9,716,118	11,361,548	13,568,882	13,265,778
Fixed assets		1,507,537	1,339,108	1,486,310	1,854,001	2,154,817	2,118,063
Intangible assets		9,551	10,156	59,529	94,820	91,601	83,345
Other assets		135,100	160,654	310,123	177,400	353,925	463,887
Total assets		11,113,671	11,082,844	12,519,477	14,201,536	17,184,967	16,958,190
Current liabilities	Before distribution	5,115,795	5,045,793	5,473,028	6,981,572	8,823,257	8,003,764
	After distribution	5,791,225	5,834,749	6,374,692	8,008,194	Undistributed	Undistributed
Non-Current liabilities		359,820	257,620	750,193	423,332	564,497	602,650
Total liabilities	Before distribution	5,475,615	5,303,413	6,223,221	7,404,904	9,387,754	8,606,414
	After distribution	6,151,045	6,092,369	7,124,885	8,431,526	Not yet	Not yet
Equity Attributable to theparent company		5,583,341	5,732,732	6,084,637	6,572,643	7,517,407	7,970,325
Capital stock		2,176,454	2,254,162	2,254,162	2,266,954	2,326,694	2,327,775
Capital surplus		890,644	858,462	830,265	904,086	1,228,781	1,289,323
Retained earnings	Before distribution	2,325,815	2,801,132	3,233,651	3,743,536	4,443,155	4,891,373
	After distribution	1,650,385	2,012,176	2,331,987	2,716,914	Undistributed	Undistributed
Other Equities		190,428	(181,024)	(233,441)	(341,933)	(481,223)	(538,146)
Treasury Stocks		-	-	-	-	-	-
Non-controlling interests		54,715	46,699	211,619	223,989	279,806	381,451
Total equity	Before distribution	5,638,056	5,779,431	6,296,256	6,796,632	7,797,213	8,351,776
	After distribution	5,056,577	4,990,475	5,394,592	5,770,010	Undistributed	Undistributed

• 75 -

Condensed Balance Sheet (IFRS and Parent only)

		Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD
Year Item		Five-Years Financial Information					Financial data of ending date in the current year on 31 Mar. 20201
		2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Current assets		2,388,388	2,864,101	3,137,049	2,840,557	3,106,100	N.A.
Fixed assets		291,858	288,352	277,238	518,658	526,522	N.A.
Intangible assets		-	-	-	-	-	N.A.
Other assets		14,420	14,748	155,386	24,773	136,430	N.A.
Total assets		8,785,123	8,871,822	9,807,235	10,126,114	11,221,369	N.A.
Current liabilities	Before distribution	2,865,831	2,916,389	3,014,416	3,276,402	3,402,927	N.A.
	After distribution	3,541,261	3,705,345	3,916,080	4,303,024	Undistributed	N.A.
Non-Current liabilities		335,951	222,701	708,182	277,069	301,035	N.A.
Total liabilities	Before distribution	3,201,782	3,139,090	3,722,598	3,553,471	3,703,962	N.A.
	After distribution	3,877,212	3,928,046	4,624,262	4,580,093	Undistributed	N.A.
Equity Attributable to the parent company		5,583,341	5,732,732	6,084,637	6,572,643	7,517,407	N.A.
Capital stock		2,176,454	2,254,162	2,254,162	2,266,954	2,326,694	N.A.
Capital surplus		890,644	858,462	830,265	904,086	1,228,781	N.A.
Retained earnings	Before distribution	2,325,815	2,801,132	3,233,651	3,743,536	4,443,155	N.A.
	After distribution	1,650,385	2,012,176	2,331,987	2,716,914	Undistributed	N.A.
Other Equities		190,428	(181,024)	(233,441)	(341,933)	(481,223)	N.A.
Treasury Stocks		-	-	-	-	-	N.A.
Non-controlling interests		-	-	-	-	-	N.A.
Total equity	Before distribution	5,583,341	5,732,732	6,084,637	6,572,643	7,517,407	N.A.
	After distribution	4,907,911	4,943,776	5,182,973	5,546,021	Undistributed	N.A.

~~1~~ Parent Company’s Reports by yearly.

• 76 -

Condensed Statement of Comprehensive Income (IFRS and Consolidated)

Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD
Year Item	Five-Years Financial Information					Financial data of ending date in the current year on 31 Mar. 2020 （Reviewed Only）
	2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Operating revenue	12,111,258	12,925,843	13,061,439	15,645,253	17,886,170	4,483,189
Gross profit	2,722,157	3,209,102	3,280,351	3,919,945	4,589,668	1,153,086
Income from operations	1,066,789	1,418,204	1,393,146	1,631,689	1,892,758	555,682
Non-operating income and expenses	303,220	178,840	226,398	288,379	276,405	19,176
Net income before tax	1,370,009	1,597,044	1,619,544	1,920,068	2,169,163	574,858
Income from operations of continued segments-after tax	954,103	1,161,735	1,224,088	1,371,529	1,677,851	434,754
Income or Loss from discontinued departments	-	-	-	-	-	-
Net income(loss)	954,103	1,161,735	1,224,088	1,371,529	1,677,851	434,754
Other comprehensive income/loss (Net of tax)	(65,277)	(378,233)	(64,127)	25,083	(136,197)	(65,295)
Total other comprehensive income (loss), net of tax	888,826	783,502	1,159,961	1,396,612	1,541,654	369,459
Net income attributable to stockholders of the parent	970,195	1,157,386	1,226,471	1,413,477	1,718,511	448,218
Net income attributable to non-controlling interests	(16,092)	4,349	(2,383)	(41,948)	(40,660)	(13,464)
Comprehensive income (loss) attributable to stockholders of the parent	902,169	779,295	1,169,058	1,441,241	1,586,951	391,295
Comprehensive income (loss) attributable to non-controlling interests	(13,343)	4,207	(9,097)	(44,629)	(45,297)	(21,836)
Earnings per share	4.39	5.15	5.44	6.26	7.47	1.93

• 77 -

Condensed Statement of Comprehensive Income (IFRS and Parent)

Expressed in Thousands of NTD

Year Item	Five-Year Financial Information	Five-Year Financial Information	Five-Year Financial Information	Five-Year Financial Information	Five-Year Financial Information	Financial data of ending date in the current year on 31 Mar. 20201
	2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Operating revenue	4,363,053	4,640,558	4,812,279	5,035,927	4,899,284	N.A.
Gross profit	929,588	1,131,605	1,217,761	1,285,215	1,258,919	N.A.
Income from operations	277,470	415,424	530,700	471,163	313,250	N.A.
Non-operating income and expenses	867,947	894,290	837,031	1,174,503	1,680,569	N.A.
Net income before tax	1,145,417	1,309,714	1,367,731	1,645,666	1,993,819	N.A.
Income from operations of continued segments-after tax	970,195	1,157,386	1,226,471	1,413,477	1,718,511	N.A.
Income or Loss from discontinued departments	-	-	-	-	-	N.A.
Net income(loss)	970,195	1,157,386	1,226,471	1,413,477	1,718,511	N.A.
Other comprehensive income/loss (Net of tax)	(68,026)	(378,091)	(57,413)	27,764	(131,560)	N.A.
Total other comprehensive income (loss), net of tax	902,169	779,295	1,169,058	1,441,241	1,586,951	N.A.
Net income attributable to stockholders of the parent	-	-	-	-	-	N.A.
Net income attributable to non-controlling interests	-	-	-	-	-	N.A.
Comprehensive income (loss) attributable to stockholders of the parent	-	-	-	-	-	N.A.
Comprehensive income (loss) attributable to non-controlling interests	-	-	-	-	-	N.A.
Earningsper share	4.39	5.15	5.44	6.26	7.47	N.A.

1 Parent Company’s Reports by yearly.

• 78 -

6.2.1. Last 5 years Auditors’ Opinions:

Year	Accounting Firm	CPA	Audit Opinion
2015	Ernst & Young	Yan, Wen-Pi Lin, Hong-Kuang	Modified Unqualified
2016	Ernst & Young	Lin, Hong-Kuang Huang, Tzu-Ping	Unqualified
2017	Ernst & Young	Huang, Tzu-Ping Lin,Hong-Kuang	Unqualified with Emphasis-of-Matter and Other-Matter Paragraphs
2018	Ernst & Young	Huang, Tzu-Ping Lin,Hong-Kuang	Unqualified with Emphasis-of-Matter and Other-Matter Paragraphs
2019	Ernst & Young	Huang, Tzu-Ping Chen,Ming-Hung	Unqualified with Emphasis-of-Matter and Other-Matter Paragraphs

6.2. Financial Analysis of the Last Five Years:

6.2.2. Financial Analysis:

	Year Item	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial analysis in the past five years (IFRS and Consolidated)	Financial data of ending date in the current year on 31 Mar. 2020 （Reviewed Only）
		2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Financial structure (%)	Ratio of liabilities to assets	49.27	47.85	49.71	52.14	54.63	50.75
	The ratio of long-term capital to fixed assets	374.29	432.88	456.18	367.01	362.22	394.58
Solvency (%)	Current ratio	166.75	174.54	177.53	162.74	153.79	165.74
	Quick ratio	122.32	130.9	125.04	108.69	100.36	107.46
	Times interest earned ratio	36.81	57.74	55.41	45.27	45.30	56.73
Operating ability	Accounts receivable turnover(turns)	3.93	4.14	3.81	3.83	3.73	3.75
	Average collection period	92	88	95	95	98	97
	Inventory turnover (turns)	4.39	4.38	3.94	3.64	3.21	2.90
	Accounts payable turnover(turns)	4.62	4.57	4.01	4.01	4.10	4.21
	Average days in sales	83	83	92	100	114	126
	Fixed assets turnover (turns)	7.95	9.08	9.25	9.37	8.92	8.39
	Total assets turnover (turns)	1.12	1.16	1.11	1.17	1.14	1.05

• 79 -

	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 the current year on 31 Mar. 2020 （Reviewed Only）
		2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Profitability	Return on total assets (%)	9.13	10.68	10.58	10.53	10.95	2.59
	Return on stockholders' equity (%)	17.80	20.35	20.27	20.95	22.99	5.38
	Pre-tax income to issued capital(%)	62.95	70.85	71.85	84.7	93.23	24.7
	Profit ratio (%)	7.88	8.99	9.37	8.77	9.38	9.7
	Earnings per share ($)	4.39	5.15	5.44	6.26	7.47	1.93
Cash flow	Cash flow ratio (%)	28.40	24.12	14.11	4.92	19.21	5.80
	Cash flow adequacy ratio (%)	118.46	148.43	114.45	78.45	81.73	32.45
	Cash reinvestment ratio (%)	12.12	7.49	(0.74)	(6.54)	6.95	4.43
	Operating leverage	2.53	2.21	2.28	2.31	2.36	2.00
Leverage	Financial leverage	1.04	1.02	1.02	1.03	1.03	1.02

	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 the current year on 31 Mar. 20201
		2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Financial structure (%)	Ratio of liabilities to assets	36.45	35.38	37.96	35.09	33.01	N.A.
	Ratio of long-term capital to fixed assets	1,913.03	1,988.1	2,369.28	1,267.24	1,427.75	N.A.
Solvency (%)	Current ratio	83.34	98.21	104.07	86.7	91.28	N.A.
	Quick ratio	71.74	86.34	85.38	67.2	69.69	N.A.
	Times interest earned ratio	74.89	101.23	87.31	91.84	156.5	N.A.
Operating ability	Accounts receivable turnover (turns)	3.84	4.2	4.4	4.65	4.5	N.A.
	Average collection period	95	87	83	78	81	N.A.
	Inventory turnover (turns)	9.83	10.34	7.76	6.16	5.3	N.A.
	Accounts payable turnover (turns)	3.81	3.95	3.9	4.06	3.97	N.A.
	Average days in sales	37	35	47	59	69	N.A.
	Fixed assets turnover (turns)	15.17	16.00	17.02	12.65	9.38	N.A.
	Total assets turnover (turns)	0.52	0.53	0.52	0.51	0.46	N.A.

• 80 -

	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 the current year on 31 Mar. 20201
		2015 （Audited）	2016 （Audited）	2017 （Audited）	2018 （Audited）	2019 （Audited）
Profitabili-ty	Return on total assets (%)	11.74	13.23	13.27	14.33	91.28	N.A.
	Return on stockholders' equity (%)	18.30	20.46	20.76	22.33	16.20	N.A.
	Pre-tax income to issued capital (%)	52.63	58.1	60.68	72.59	24.39	N.A.
	Profit ratio (%)	22.24	24.94	25.49	28.07	85.69	N.A.
	Earnings per share ($)	4.39	5.15	5.44	6.26	35.08	N.A.
Cash flow	Cash flow ratio (%)	15.52	14.83	6.06	5.53	7.47	N.A.
	Cash flow adequacy ratio (%)	43.11	40.04	39.76	30.32	7.31	N.A.
	Cash reinvestment ratio (%)	(2.24)	(3.95)	(9.30)	(10.18)	28.11	N.A.
	Operating leverage	2.86	2.41	2.09	2.45	(9.63)	N.A.
Leverage	Financial leverage	1.06	1.03	1.03	1.04	3.53	N.A.

1 Parent Company’s Reports by yearly.

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

AUDIT COMMITTEE REVIEW REPORT

The Board of Directors has prepared the Company’s 2019 Financial Statements. The CPA firm of Ernst & Young, by CPA Huang, Tzu-Ping and Chen, Ming-Hung, was retained to audit the Company’s Financial Statements and has issued an audited report relating to the Financial Statements. The Financial Statements have been reviewed and determined to be correct and accurate by the Audit Committee members of SINBON. According to relevant requirements of the Securities and Exchange Act and the Company Law, we hereby submit this report.

Chairman of the Audit Committee:

Chi-Lin Wei 14 April 2020

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

Independent Auditors’ Report Translated from Chinese

To SINBON Electronics Co., Ltd.

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

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

Basis for Opinion

We conducted our audit of 2019 consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Order No. Financial-Supervisory-Securities-Auditing -1090360805 issued by the Financial Supervisory Commission on 25 February 2020, and auditing standards generally accepted in the Republic of China; we conducted our audit of 2018 consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

• 82 -

addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Valuation for inventories

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

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

2. Impairment of accounts receivable

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

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

• 83 -

Other Matter– Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain consolidated subsidiaries, which statements reflected total assets of NT$3,188,875 thousand and NT$1,991,440 thousand, constituting 19% and 14% of consolidated total assets as of 31 December 2019 and 2018, respectively, and total operating revenues of NT$3,966,252 thousand and NT$2,721,718 thousand, constituting 22% and 17% of consolidated operating revenues for the years ended 31 December 2019 and 2018, respectively. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method whose statements are based solely on the reports of other auditors. These associates and joint ventures under equity method amounted to NT$373,809 thousand and NT$321,922 thousand, both representing 2% of consolidated total assets as of 31 December 2019 and 2018. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$83,796 thousand and NT$63,268 thousand, representing 4% and 3% of the consolidated net income before tax for the years ended 31 December 2019 and 2018, respectively, and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$29,200 thousand and NT$(2,107) thousand, representing (21)% and (8)% of the consolidated other comprehensive income for the years ended 31 December 2019 and 2018, respectively.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

==> picture [419 x 57] intentionally omitted <==

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

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

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

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

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

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

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

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

6. 85 -

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

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

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

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

Other

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

/s/Huang, Tzu Ping

/s/ Chen, Ming Hung

Ernst & Young, Taiwan

20 March 2020

Notice to Readers

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

• 86 -

Attachment 1: Financing provided to others for the year ended 31 December 2019

No.	Lender (Note 1)	Counterparty	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
0	The Company	ET Hungary	Other receivables	Y	$68,000	$67,498	$13,500	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$3,006,963	$3,006,963
1	BJSB	BJSB Tongan	Other receivables	Y	$46,046	$43,217	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$90,856	$90,856

Note 1: The above transations were all made between consolidated entities in the Group and have been reversed.

Note 2: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial which were audited by independent accountants as of 31 December 2019.

The Company: $7,517,407*40%=$3,006,963

BJSB: $227,141*40%=$90,856

Note 3: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial report which were audited by independent accountants as of 31 December 2019. The Company: $7,517,407*40%=$3,006,963

BJSB: $227,141*40%=$90,856

Note 4: For short-term financing.

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Attachment 2: Endorsement/Guarantee provided to others as of 31 December 2019

(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/ endorsemen t	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	SHSB	2	$3,006,963	$47,418	$45,159	$ -	none	0.60%	$7,517,407	Y	N	Y
0	The Company	SZSB	2	$3,006,963	$15,806	$15,053	$ -	none	0.20%	$7,517,407	Y	N	Y
0	The Company	TCSB	2	$3,006,963	$299,506	$286,007	$ -	none	3.80%	$7,517,407	Y	N	Y
0	The Company	JSEM	2	$3,006,963	$395,150	$376,325	$ -	none	5.01%	$7,517,407	Y	N	Y
0	The Company	JYSB	2	$3,006,963	$379,344	$361,272	$-	none	4.81%	$7,517,407	Y	N	Y
0	The Company	BJSB Tongan	2	$3,006,963	$646,674	$615,231	$ -	none	8.18%	$7,517,407	Y	N	Y
0	The Company	T-CONN	2	$3,006,963	$179,030	$75,265	$ -	none	1.00%	$7,517,407	Y	N	N
0	The Company	ET Hungary	2	$3,006,963	$327,179	$315,631	$241,304	none	4.20%	$7,517,407	Y	N	N
0	The Company	C&C	2	$3,006,963	$282,690	$270,954	$120,424	none	3.60%	$7,517,407	Y	N	N
0	The Company	T-CONN Zhongshan	2	$3,006,963	$426,762	$316,113	$40,041	none	4.21%	$7,517,407	Y	N	Y
0	The Company	Radbon	2	$3,006,963	$150,000	$150,000	$125,000	none	2.00%	$7,517,407	Y	N	N
1	T-CONN	T-CONN Zhongshan	2	$3,006,963	$94,230	$90,318	$ -	none	1.20%	$7,517,407	N	N	Y

Note 1: The Company and its subsidiaries are coded as follows:

1. The Company is coded "0".

2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

3. 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: 1. A company with which it does business.

4. A company in which the public company directly and indirectly holds more than 50% of the voting shares.

5. A company that directly and indirectly holds more than 50% of the voting shares in the public company.

6. A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

7. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

8. A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.

9. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

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 2019. $7,517,407*40%=$3,006,963

• 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 2019.

• Note 5: "Y" for the listed (OTC) parent company guarantees/endorses for subsidiary, subsidiary guarantees/endorses for the listed (OTC) parent company or guarantee/endorse for companies in Mainland China.

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Attachment 3: Securities held as of 31 December 2019. (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type and name of securities	Relationship (Note 1)	Financial statement account	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	Note
				Shares	Carrying amount		Percentage of ownership (%)	Fair value
The Company	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	15,000,000 shares		$113,200	11.11%	$113,200	-
The Company	Top Taiwan Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	6,000,000 shares		51,579	7.50%	51,579	-
Kwan-Ze	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	5,000,000 shares		37,699	3.70%	37,699	-
The Company	Dynahz Technologies	-	Financial assets measured at fair value through other comprehensive income- noncurrent	2,771,670 shares		40,696	16.67%	40,696	-
The Company	Top Taiwan VII Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,438,776 shares		15,083	3.06%	15,083	-
The Company	Gongwin Biopharm Holdings Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	235,000 shares		18,797	0.25%	18,797	-
The Company	Japan SINBON Electronics Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	75 shares		1,031	15.00%	1,031	-
Kwan-Ze	Actmax Technologies Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	-		4,692	19.00%	4,692	-
The Company	Top Taiwan III Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	569,105 shares		779	4.07%	779	-
SINBON USA L.L.C	HOTWIRE Development LLC	-	Financial assets measured at fair value through other comprehensive income- noncurrent	697,500 shares		1,261	5.00%	1,261	-
The Company	Top Taiwan II Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	295,000 shares		476	5.00%	476	-
The Company	Bandrich, Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	330,000 shares		463	1.62%	463	-
The Company	Nextronics Engineering Corp.	-	Financial asset measured at fair value through profit or loss–current	2,950,000 shares		95,433	9.94%	95,433	-
The Company	Cayman Lan-Cheng Fund	-	Financial asset measured at fair value through profit or loss–current	30,000 shares		68,646	17.14%	68,646	-
Kwan-Ze	Hotai Finance Co., Ltd.	-	Financial asset measured at fair value through profit or loss–current	100,000 shares		8,890	0.02%	8,890	-
Kwan-Ze	UPAMC Global AIoT Fund	-	Financial asset measured at fair value through profit or loss–current	300,000 shares		3,108	-	3,108	-
The Company	Trutankless, Inc.	-	Financial asset measured at fair value through profit or loss–current	162,400 shares		1,711	-	1,711	-
			Total			$463,544

Note 1: Not required if the issuer of securities is not a related party.

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Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019.

Related-party	Counter-party	Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Details of non-arm's length transaction	Details of non-arm's length transaction	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	JYSB	Subsidiary	Purchase	$1,537,302	41.36%	Trading condition is as same as other supplier	N/A	N/A	$(285,073)	(30.44)%
JYSB	The Company	Subsidiary	Purchase	$144,921	3.31%	Trading condition is as same as other supplier	N/A	N/A	$(37,576)	(2.63)%
HKSB	JYSB	Associates	Purchase	$1,613,611	50.20%	Trading condition is as same as other supplier	N/A	N/A	$(257,657)	(36.10)%
JYSB	HKSB	Associates	Purchase	$120,123	2.74%	Trading condition is as same as other supplier	N/A	N/A	$(46,552)	(3.26)%
JSEM	JYSB	Associates	Purchase	$180,027	22.37%	Trading condition is as same as other supplier	N/A	N/A	$(196,893)	(45.66)%
T-CONN	T-CONN Zhongshan	Associates	Purchase	$366,279	34.20%	Trading condition is as same as other supplier	N/A	N/A	$(45,123)	(24.02)%
SZSB	HKSB	Associates	Purchase	$371,604	92.16%	Trading condition is as same as other supplier	N/A	N/A	$(112,104)	(99.52)%
JYSB	SINBON USA	Associates	Purchase	$180,874	4.13%	Trading condition is as same as other supplier	N/A	N/A	$(12,694)	(0.89)%
BJSB Tongan	JSEM	Associates	Purchase	$164,972	8.45%	Trading condition is as same as other supplier	N/A	N/A	$(5,900)	(1.41)%

Attachment 5: Receivables from related parties with accounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019.

Related-party	Counter-party	Relationship	Amount	Average collection turnover	Overdue account receivable-related parties	Overdue account receivable-related parties	Collection in subsequent period	Allowance for doubtful debts
					Amount	Processingmethod
JYSB	The Company	The Company	$285,073	5.37	$ -	-	$285,073	$ -
JYSB	HKSB	Associates	$257,657	7.32	$ -	-	$256,445	$ -
JYSB	JSEM	Associates	$196,893	1.37	$ -	-	$130	$ -
HKSB	SZSB	Associates	$112,104	4.82	$ -	-	$67,144	$ -

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Attachment 6: 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	JYSB	1	Purchase	$1,537,302	(Note 4)	11.56%
1	JYSB	The Company	2	Sales	$1,537,302	(Note 4)	11.56%
1	JYSB	HKSB	3	Sales	$1,613,611	(Note 4)	12.14%
2	HKSB	JYSB	3	Purchase	$1,613,611	(Note 4)	12.14%
2	HKSB	SZSB	3	Sales	$371,604	(Note 4)	2.79%
5	SZSB	HKSB	3	Purchase	$371,604	(Note 4)	2.79%
3	T-CONN	T-CONN Zhongshan	3	Purchase	$366,279	(Note 4)	2.75%
4	T-CONN Zhongshan	T-CONN	3	Sales	$366,279	(Note 4)	2.75%
1	JYSB	SINBON USA	3	Purchase	$180,874	(Note 4)	1.36%
7	SINBON USA	JYSB	3	Sales	$180,874	(Note 4)	1.36%
6	JSEM	JYSB	3	Purchase	$180,027	(Note 4)	1.35%
1	JYSB	JSEM	3	Sales	$180,027	(Note 4)	1.35%
1	JYSB	The Company	2	Purchase	$144,921	(Note 4)	1.09%
0	The Company	JYSB	1	Sales	$144,921	(Note 4)	1.09%
8	BJSB Tongan	JSEM	3	Purchase	$164,972	(Note 4)	1.24%
6	JSEM	BJSB Tongan	3	Sales	$164,972	(Note 4)	1.24%
2	HKSB	JYSB	3	Sales	$120,123	(Note 4)	0.90%
1	JYSB	HKSB	3	Purchase	$120,123	(Note 4)	0.90%

• 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, interim cumulative balances are used as basis.

Note 4 : The sales price to the above related parties was determined through mutual agreement based on the market conditions.

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Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2019: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2019	Investment as of 31 December 2019	Investment as of 31 December 2019	Net income (loss) of investee company	Investment income (loss) recognized	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%	$662,744	$393,627	$393,627	Subsidiary
The Company	Kwan-Ze	New Taipei City, Taiwan	Holding company	$235,600	$235,600	23,560,000 shares	100.00%	$409,311	$81,795	$81,795	Subsidiary
The Company	Top Taiwan IV Venture Capital Co., Ltd	Taipei City, Taiwan	Holding company	$22,400	$22,400	2,240,000 shares	20.00%	$5,548	$(50,322)	$(10,065)	Investee under the equity method
The Company	SB BVI	British Virgin Islands	Holding company	USD45,021,000 $1,461,158	USD45,021,000 $1,461,158	-	100.00%	$3,828,051	$575,888	$575,888	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$30,648	$30,648	2,945,034 shares	3.59%	$61,011	$438,625	$15,733	Investee under the equity method
The Company	S E L	Mauritius	Holding company	- -	USD3,726,000 $120,732	-	-	-	$(25)	$(16)	Subsidiary
The Company	SINBON USA LLC	4265 Gibson Dr., Tipp City , OH 45371, USA	Logistic center.	USD5,159,000 $161,943	USD4,059,000 $128,061	-	100.00%	$84,135	$(8,457)	$(8,457)	Subsidiary
The Company	SINBON Europe GmbH	Pfarrkirchen, Germany	Logistic center.	EUR5,209,000 $185,241	EUR5,209,000 $185,241	-	100.00%	$43,143	$(64,915)	$(64,915)	Subsidiary
The Company	Radbon Avionics Inc.	Miaoli County, Taiwan	Manufacturing and selling signal cables and cabin wiring.	$33,000	$33,000	3,300,000 shares	55.00%	$37,218	$12,166	$6,691	Subsidiary
The Company	T-CONN	New Taipei City, Taiwan	Manufacturing and selling a wide variety of connectors, wires and cables.	$166,066	$116,804	15,577,522 shares	61.18%	$238,664	$65,019	$39,630	Subsidiary
T-CONN	S P L	Mauritius	Logistic center.	$3,039	$3,039	-	100.00%	$14,157	$(9,350)	$ -	Subsidiary
SINBON USA L.L.C	SINBON Circuits & Cables LLC	815 South Brown School Road Vandalia, OH 45377, USA	Selling a wide variety of connectors and cables.	USD 2,704,000	USD 1,604,000	-	51.00%	USD1,908,000 $57,435	USD(58,000) $(1,792)	$ -	Subsidiary
SINBON USA L.L.C	Worldwide Wire Harnesses Co.,Ltd.	Samoa	Logistic center.	USD 75,000	USD 75,000	-	50.00%	USD25,000 $760	USD(67,000) $(2,059)	$ -	Subsidiary
Kwan-Ze	Argocy Research Inc.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$147,175	$147,175	14,624,200 shares	17.81%	$307,250	$438,625	$ -	Investee under the equity method

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Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2019: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2019	Investment as of 31 December 2019	Investment as of 31 December 2019	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
Worldwide Wire Harnesses Co., Ltd.	STT	U.S.A Tennessee	Logistic center.	USD140,000 $4,542	USD140,000 $4,542	-	100.00%	USD(200,000) ($6,008)	USD(67,000) $(2,059)	$ -	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.	Argosy International B.V.	The Netherlands	Leasing operations and sell ODM and OED	$22,314	$22,314	-	100.00%	$15,766	$180	$ -	Investee under the equity method
Argocy Research Inc.	Ari International (Singapore)Pte.,Ltd. (AIS)	Singapore	Holding company	$32,697	$32,697	-	100.00%	$2,901	$(1,588)	$ -	Investee under the equity method
Argocy Research Inc.	Global Saber Electronics Co., Ltd.	Mauritius	Selling a wide variety of connectors and cables.	$ -	$ -	-	100.00%	$67,676	$11,211	$ -	Investee under the equity method
Argocy Research Inc.	ROTEC LIMITED	British Virgin Islands	Holding company	$268,479	$268,479	8,550 shares	77.38%	$458,066	$65,852	$ -	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%	$133,903	$65,852	$ -	Investee under the equity method
SINBON Europe GmbH	SINBON Holding GmbH	Germany	Holding company	EUR5,184,000 $181,113	EUR5,184,000 $181,113	-	51.00%	EUR1,256,000 $42,373	EUR(3,491,000) $(120,862)	$ -	Subsidiary
SINBON Holding GmbH	ET Hungary	Hungary	Selling,Producting and Processing a wide variety of connectors and cables.	EUR1,080,000 $38,364	EUR1,080,000 $38,364	-	100.00%	EUR(2,406,000) $(81,212)	EUR(3,346,000) $(115,846)	$ -	Subsidiary
SINBON Holding GmbH	ET Germany	Germany	Logistic center.	EUR1,245,000 $44,225	EUR1,245,000 $44,225	-	100.00%	EUR1,172,000 $39,561	EUR(85,000) $(2,956)	$ -	Subsidiary

Note 1: （ 1 ） "Investee company", "Addres", "Main businesses and products", "Initial Investment"and "Investment as of 31 December 2019" shall be filled in the Company's investmet. to the subsidiaries' re-investment in corresponding order, and indicate the relationship in the Notes.

• （ 2 ） "Net income (loss) of investee company" shall be filled in net income (loss) of investee for the year ended 31 December 2019.

• （ 3 ） "Investment income (loss) recognized", shall be filled in only investment income (loss) under the equity method, and the investor shall confirm that its investment income (loss) includes the subsidiaries' re-investment.

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Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Counterparty	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2019	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2019	Accumulated Inward Remittance of Earnings as of 31 December 2019
					Outflow	Inflow
BJSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 4,450,000	Indirectly investment in Mainland China through remittance from a third region.	USD 1,020,000 $30,719	$ -	$ -	USD 1,020,000 $30,719	RMB1,629,000 $7,292	100.00%	RMB1,629,000 $7,292 (Note 1)	RMB52,558,000 $227,141	USD11,030,000 $351,623
JYSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 37,780,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 22,050,000 $705,108	$ -	$ -	USD 22,050,000 $705,108	USD17,940,000 $554,840	100.00%	USD17,940,000 $554,840 (Note 1)	USD97,032,000 $2,921,231	USD25,244,000 $780,847
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	USD98,000 $3,029	100.00%	USD98,000 $3,029 (Note 1)	USD5,429,000 $163,455	USD2,371,000 $72,709
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	USD420,000 $12,987	100.00%	USD420,000 $12,987 (Note 1)	USD9,200,000 $276,977	RMB20,700,000 $93,644
TCSB	Selling a wide variety of connectors, wires and cables.	USD14,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 8,000,000 $248,003	$ -	$ -	USD 8,000,000 $248,003	USD2,095,000 $64,777	100.00%	USD2,095,000 $64,777 (Note 1)	USD18,163,000 $546,819	USD196,000 $5,890
China Digital Library Corp.Ltd.	Technology development of computer software, transfer of technology, advisory service	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)	$ -	$ -
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	$ -	-	$ -	$ -	$ -
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	$ -	-	$ -	$ -	$ -

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Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Counterparty	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2019	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2019	Accumulated Inward Remittance of Earnings as of 31 December 2019
					Outflow	Inflow
JY Sinact	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 5,266,000 $164,599	$ -	$ -	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	$ -	-	$ -	$ -	$ -
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	$ -	-	$ -	$ -	$ -
T-CONN Zhongshan	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 58,300,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 3,086,000 $99,007	USD 600,000 $18,522	$ -	USD 3,686,000 $117,529	$51,570	61.18%	$30,721 (Note 2)	$66,197	$ -
BJSB Tongan	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 130,000,000	Indirectly investment in Mainland China through remittance from a third region.	USD 3,000,000 $89,134	$ -	$ -	USD 3,000,000 $89,134	$511,901	100.00%	$511,901 (Note 1)	$1,652,000	USD13,797,000 $418,425
Accumulated Investment in Mainland China as of 31 December 2019 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment USD 52,087,000 USD 53,420,000 N/A (Note 4)
Accumulated Investment in Mainland China as of 31 December 2019			Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
USD 52,087,000			USD 53,420,000		N/A (Note 4)

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

Note 2: The financial statements were not audited by independent accountants.

Note 3: The financial statements were audited by other independent accountants.

Note 4: According to No. Shen-Zi-09704604680 issued by Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is not limited to 60% of net worth or consolidated net worth specified by the Investment Commission.

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

For the Years Ended 31 December 2019 and 2018

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

1. History and organization

SINBON Electronics Co., Ltd. (the Company) was incorporated in Republic of China (R.O.C) in December 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 Company and its subsidiaries (the Group) were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on 20 March 2020.

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 2019. The nature and the impact of each new standard and amendment that has a material effect on the Group is described below:

(1) IFRS 16“ Leases

IFRS 16 “Leases” replaces IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, SIC-15 “Operating Leases - Incentives” and SIC-27 “Evaluating the Substance of Transactions Involving the Legal Form of a Lease”.

• 93 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Group followed the transition provision in IFRS 16 and the date of initial application was 1 January 2019. The impacts arising from the adoption of IFRS 16 are summarized as follows:

• A. Please refer to Note 4 for the accounting policies before or after 1 January 2019.

• B. For the definition of a lease, the Group elected not to reassess whether a contract was, or contained, a lease on 1 January 2019. The Group was permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4. That is, for contracts entered into (or changed) on or after 1 January 2019, the Group need to assess whether contacts are, or contain, leases applying IFRS 16. In comparing to IAS 17, IFRS 16 provides that a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group assessed most of the contracts are, or contain, leases and has no significant impact arose.

• C. The Group is a lessee and elects not to restate comparative information in accordance with the transition provision in IFRS 16. Instead, the Group recognized the cumulative effect of initially applying IFRS 16 as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the date of initial application.

(a)Leases previously classified as operating leases

For leases that were previously classified as operating leases applying IAS 17, the Group measured and recognized those leases as lease liability on 1 January 2019 at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on 1 January 2019, and; the Group chose, on a lease-by-lease basis, to measure the right-of-use asset at either:

• 94 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• i. its carrying amount as if IFRS 16 had been applied since the commencement date, but discounted using the lessee’s incremental borrowing rate on 1 January 2019; or

• ii. an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet immediately before 1 January 2019.

The Group increased the right-of-use asset by NT$90,771 thousand and the lease liability by NT$90,771 thousand on 1 January 2019.

Besides, on 1 January 2019, for leases that were previously classified as operating leases applying IAS 17 and those who have paid the rent in full, the Group reclassified the rental prepayment NT$1,021 thousand and long-term rental prepayment of NT$36,355 thousand to the right-of-use asset.

In accordance with the transition provision in IFRS 16, the Group used the following practical expedients on a lease-by-lease basis to leases previously classified as operating leases:

• i. Apply a single discount rate to a portfolio of leases with reasonably similar characteristics.

• ii. Rely on its assessment of whether leases are onerous immediately before 1 January 2019 as an alternative to performing an impairment review.

• iii. Elect to account in the same way as short-term leases to leases for which the lease term ends within 12 months of 1 January 2019.

• iv. Exclude initial direct costs from the measurement of the right-of-use asset on 1 January 2019.

• v. Use hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease.

• 95 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (b)Leases previously classified as finance leases

None.

• (c) Please refer to Note 4, Note 5 and Note 6 for additional disclosure of lessee and lessor which required by IFRS 16.

• (d)At the date 1 January 2019, the impacts arising from the initialadoption of IFRS 16 on the Group are summarized as follows:

• i. The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized in the balance sheet on 1 January 2019 was 0.70%~5.05%.

• ii. The explanation for the difference of NT$2,731 thousand between: 1) operating lease commitments disclosed applying IAS 17 as at 31 December 2018, discounted using the incremental borrowing rate on 1 January 2019; and 2) lease liabilities recognized in the balance sheet as at 1 January 2019 is summarized as follows:

Operating lease commitments disclosed applying IAS $95,492 17 as at 31 December 2018 Discounted using the incremental borrowing rate on $93,502 1 January 2019 Less:adjustment to leases that meet and elect to (2,731) account in the same way as short-term leases The carrying value of lease liabilities recognized as at $90,771 1 January 2019

• (2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New,Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	Definition of a Business(Amendments to IFRS 3)	1 January2020
b	Definition of Material(Amendments to IAS 1 and 8)	1 January2020
c	Interest Rate Benchmark Reform - Amendments to IFRS 9,IAS 39 and IFRS 7	1 January 2020

• 96 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(a) Definition of a Business (Amendments to IFRS 3)

The amendments clarify the definition of a business in IFRS 3 Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition. IFRS 3 continues to adopt a market participant’s perspective to determine whether an acquired set of activities and assets is a business. The amendments clarify the minimum requirements for a business; add guidance to help entities assess whether an acquired process is substantive; and narrow the definitions of a business and of outputs; etc.

(b) Definition of a Material (Amendments to IAS 1 and 8)

The main amendment is to clarify new definition of material. It states that “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users.

• (c) Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and IFRS 7

The amendments include a number of exceptions, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is directly affected if the interest rate benchmark reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument. Hence, the entity shall apply the exceptions to all hedging relationships directly affected by the interest rate benchmark reform.

• 97 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The amendments include:

• (1) Highly probable requirement When determining whether a forecast transaction is highly probable, an entity shall assume that the interest rate benchmark on which the hedged cash flows are based is not altered as a result of the interest rate benchmark reform.

• (2) Prospective assessments

• When performing prospective assessments, an entity shall assume that the interest rate benchmark on which the hedged item, hedged risk and/or hedging instrument are based is not altered as a result of the interest rate benchmark reform.

• (3) IAS 39 retrospective assessment

• An entity is not required to undertake the IAS 39 retrospective assessment (i.e. the actual results of the hedge are within a range of 80–125%) for hedging relationships directly affected by the interest rate benchmark reform.

• (4) Separately identifiable risk components

• For hedges of a non-contractually specified benchmark component of interest rate risk, an entity shall apply the separately identifiable requirement only at the inception of such hedging relationships.

The amendments also include the end of application of the exceptions requirements and the related disclosures requirements of the amendments.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2020. The standards and interpretations have no material impact on 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)

• (3) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are not endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	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	To be determined by IASB
b	IFRS 17 “Insurance Contracts”	1 January2021
c	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	1 January 2022

• (a) 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 the amendments 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)

• (b) IFRS 17 Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The fulfilment cash flows comprise of the following:

• (1) estimates of future cash flows;

• (2) Discount rate: an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows; and

• (3) a risk adjustment for non-financial risk.

The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims. Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

• (c) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

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 new or amended standards and interpretations have no material impact on the Group.

• 100 -

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 2019 and 2018 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, which are endorsed by FSC (TIFRSs).

• (2) Basis of Preparation

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

• 101 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

When the Group 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

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 Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using 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 Group 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

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

• 102 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The consolidated entities are listed as follows:

Investor	Subsidiary	Main businesses	Percentage of	ownership (%)	Note
			31 December 2019	31 December 2018
The Company	SINBON International Enterprise Co.,Ltd.(SB BVI))	Holding company	100.00%	100.00%
The Company	Hong Kong SINBON Electronics Co., Ltd. (HKSB)	Selling a wide variety of connectors, wires and cables	100.00%	100.00%
The Company	Super Elite Ltd.(SEL)	General investment	-	64.48%	Note1
The Company	Kwan-Ze Corporation Ltd. (Kwan-Ze)	Selling a wide variety of electronic materials and holdingcompany	100.00%	100.00%
The Company	SINBON USA L.L.C. (SINBON USA)	Logistic center	100.00%	100.00%
The Company	Beijing SINBON Tongan Electronics Co., Ltd.(BJSB Tongan)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
The Company	SINBON Europe GmbH (SINBON Europe)	Logistic center	100.00%	100.00%
The Company	Radbon Avionics Inc. (Radbon)	Selling signal cables and cabin wiring.	55.00%	55.00%
The Company	T-CONN Precision Co., Ltd.(T-CONN)	Manufacturing and selling a wide variety of connectors, wires and cables	61.18%	62.52%	Note2
SB BVI	Jiangyin SINBON Electronics Co., Ltd. (JYSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
SB BVI	Shenzhen SINBON Electronics Co., Ltd. (SZSB)	Selling a wide variety of connectors, wires and cables	100.00%	100.00%
SB BVI	Shanghai SINBON Electronics Co.,Ltd.(SHSB)	Selling a wide variety of connectors and cables	100.00%	100.00%
SB BVI	Tong Cheng SINBON Electronics Co., Ltd. (TCSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%

• 103 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Investor	Subsidiary	Main businesses	Percentage of ownership (%)	Percentage of ownership (%)	Note
			31 December 2019	31 December 2018
T-CONN	T-CONN Precision (Zhongshan) Co., Ltd.(T-CONN Zhongshan)	Manufacturing and selling a wide variety of connectors, wires and cables	61.18%	62.52%	Note2
T-CONN	Super Progressive Ltd. (SPL)	Logistic center	61.18%	62.52%	Note2
BJSB Tongan	Beijing SINBON Electronics Co., Ltd. (BJSB)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%	Note3
BJSB Tongan	Jiangsu ENMAGIC Energy Co., Ltd. (JSEM)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	100.00%
JSEM	Kunshan ENMAGIC Energy Co., Ltd. (KSEM)	Manufacturing and selling a wide variety of connectors, wires and cables	100.00%	-	Note4
SINBON USA	Worldwide Wire Harnesse Co., Ltd.(SST)	Holding Company	50.00%	50.00%
SINBON USA	SINBON Circuits & Cables LLC (C&C)	Manufacturing and selling a wide variety of connectors, wires and cables	51.00%	40.00%	Note5
SST	SINBON Technologies Tennessee L.L.C.(STT)	Logistic Center	50.00%	50.00%
SINBON Europe	SINBON Holding GmbH (SINBON Elcotronic)	Holding company	51.00%	51.00%
SINBON Electronic	SINBON Hungary Kft (ET Hungary )	Manufacturing and selling a wide variety of connectors, wires and cables	51.00%	51.00%
SINBON Electronic	SINBON Germany GmbH (ET Germany)	Logistic center	51.00%	51.00%

• 104 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• Note 1: SEL was closed down on 19 June 2019. The Group will not incorporate SEL’s gain or loss in its consolidated financial statement from the day the Group ceased to have control over SEL.

• Note 2: In 2019, T-CONN raised capital; however, the Group did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 62.52% to 61.18%.

• Note 3: After signing the transfer agreement 5 September 2018, the shareholders’ rights and obligations of BJSB have been transferred to BJSB Tongan. On 2 January 2019, the change of registration was completed and approved by State Administration for Industry and Commerce of the People's Republic of China.

• Note 4: On 9 January 2019, the Group newly invested RMB 3,000 thousand to found KSEM, and the Group had obtained full control of the Group. Accordingly, KSEM was consolidated.

• Note 5: On 10 January 2019, the Group invested additional USD 1,100 thousand in C&C and increased the shareholding percentage to 51%. Accordingly, C&C was consolidated.

The subsidiaries included in the consolidated financial statements listed above, some of which financial statements are recorded as the basis of the verification by other accountants. As of 31 December 2019 and 2018, the related assets amounted to NT$3,188,875 thousand and NT$1,991,440 thousand. The net sales of these subsidiaries amounted to NT$3,966,252 thousand and NT$2,721,718 thousand.

(4) Foreign Currency Transactions

The Group’s consolidated financial statements are presented in New Taiwan Dollars (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 date of transaction. 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 currency 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 currency are translated using the exchange rates as at the dates of the initial transactions.

• 105 -

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 IFRS 9 Financial Instruments 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.

• 106 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

• 107 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

All other liabilities are classified as non-current.

• (7) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) 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 IFRS 9 Financial Instruments 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.

(1)Financial instruments: Recognition and Measurement

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

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

• A. the Group’s business model for managing the financial assets

• B. the contractual cash flow characteristics of the financial asset

• 108 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

• A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

• B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

• A. purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition

• B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods

• 109 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

• A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

• B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

• (a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

• (b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

• (c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

• (i) Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

• (ii) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

• 110 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(2) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the balance sheet.

• 111 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Group measures expected credit losses of a financial instrument in a way that reflects:

• (a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes

• (b) the time value of money

• (c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions

The loss allowance is measured as follows:

• A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.

• B. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.

• C. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

• D. For lease receivables arising from transactions within the scope of IFRS 16 (before 1 January 2019: IAS 17), the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

• 112 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(3)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.

(4)Financial liabilities and equity

Classification between liabilities or equity

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

Equity instruments

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

• 113 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 IFRS 9 Financial Instruments.

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

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

• 114 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments 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 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

• 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 liabilities or financial assets and financial liabilities 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.

• 115 -

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.

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.

(5) 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 instrument

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

Derivative 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. The changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

When the host contracts are either non-financial assets or liabilities, 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 designated at fair value though 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.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The fair value of 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.

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 under weighted average cost method. 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.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

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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)

(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.

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.

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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 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 28 Investments in Associates and Joint Ventures (before 1 January 2019: 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.

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.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(13) 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 3～15 years 5～10 years 3～10 years 2～15 years Lower of leasehold years or useful lives

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

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

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(14) Leases

The accounting policy from 1 January 2019 is as follows:

For contracts entered on or after 1 January 2019, the Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

• (a) the right to obtain substantially all of the economic benefits from use of the identified asset; and

• (b) the right to direct the use of the identified asset.

The Group elected not to reassess whether a contract is, or contains, a lease on 1 January 2019. The Group is permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximizing the use of observable information.

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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)

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

• (a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;

• (b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• (c) amounts expected to be payable by the lessee under residual value guarantees;

• (d) the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

• (e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

• (a) the amount of the initial measurement of the lease liability;

• (b) any lease payments made at or before the commencement date, less any lease incentives received;

• (c) any initial direct costs incurred by the lessee; and

• (d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Group applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

The accounting policy before 1 January 2019 is as follows:

Group as a lessee

Finance leases which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

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

Group as a lessor

Leases in which the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

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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)

(15) 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.

A summary of the policies applied to the Group’s intangible assets is as follows:

ollows:
Useful lives Amortization method used Internally generated or acquired	Computer software
	1~15 years Amortized on a straight- line basis over the estimated useful life Acquired

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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)

(16) 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.

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.

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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)

(17) 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.

Provision for warranties

A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgement and other known factors.

(18) Revenue recognition

The Group’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

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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)

Sale of goods

The Group manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Group are computer peripherals, connectors, wires and other parts and revenue is recognized based on the consideration stated in the contract.

The Group provides its customer with a warranty with the purchase of the products. The warranty provides assurance that the product will operate as expected by the customers. And the warranty is accounted in accordance with IAS 37.

The credit period of the Group’s sale of goods is from 60 to 120 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Group usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. For some of the contracts, the Group has transferred the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Group measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses.

Rendering of services

The Group provides maintenance services for the sale of construction for solar photovoltaic power generation system. Such services are separately priced or negotiated, and provided based on contract periods.

Most of the contractual considerations of the Group are collected evenly throughout the contract periods. When the Group has performed the services to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Group has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component has arisen.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(19) Borrowing costs

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.

(20) 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.

(21) 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.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. 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.

(22) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred 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:

• i. 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

• ii. 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:

• i. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• ii. 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.

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.

(23) 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 acquire either at fair value or at the non-controlling interest’s proportionate share of the acquirer’s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and are classified under administrative expenses.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquire.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquire is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at the acquisition-date fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IFRS 9 Financial Instruments (before 1 January 2019: 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 acquire are assigned to those units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purpose and is not larger than an operating segment before aggregation.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation disposed of and the portion of the cash-generating unit retained.

5. Significant accounting judgments, estimates and assumptions

The preparation of the Group’s consolidated financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(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, future salary increases, mortality rates and future pension increases. Please refer to Note 6 for more details.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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.

Deferred tax assets are recognized for all carryforward of unused tax losses, tax credits and deductible temporary differences to the extent that it is probable that future 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.

(d) Accounts receivables–estimation of impairment loss

The Group estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(e) Inventories

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

6. Contents of significant accounts

(1)Cash and cash equivalents

Cash on hand Demand deposits Timedeposits Total	As of 31 December	As of 31 December
	2019	2018
	$24,050 3,406,670 148,469	$22,194 2,501,389 101,438
	$3,579,189	$2,625,021

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

Financial assets mandatorily at fair value through profit or loss: Stocks Funds Cross currency swaps Embedded derivative-bond Total	As of 31 December	As of 31 December
	2019	2018
	$106,034 71,754 - -	$80,034 81,110 9,873 82
	$177,788	$171,099

Financial assets at fair value through profit or loss 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)

(3) Notes receivables

(3) Notes receivables
Notes receivables arising from operating activities Notes receivables arising from non-operating activities Subtotal (total carrying amount) Less: loss allowance Total	As of 31 December
	2019 $829,969 - 829,969 - $829,969	2018 $468,086 - 468,086 - $468,086

Part of the Group’s notes receivable have been signed into with recourse contracts with financial institutions. Please refer to Note 12.

Notes receivables were not pledged.

The Group follows the requirement of IFRS 9 to assess the impairment. Please refer to Note 6(17) for more details on loss allowance and Note 12 for details on credit risk management.

(4) Trade receivables

Trade receivables
Trade receivables Less:loss allowance Subtotal Trade receivables from related parties Total	As of 31 December 2019 2018 $4,083,626 $4,150,889 (27,176) (27,655) 4,056,450 4,123,234 36,431 2,027 $4,092,881 $4,125,261
	2019 $4,083,626 (27,176) 4,056,450 36,431 $4,092,881

Trade receivables were not pledged.

Trade receivables are generally on 60-120 day terms. The total carrying amount are NT$4,083,626 thousand and NT$4,150,889 thousand as of 31 December 2019 and 2018. Please refer to Note 6(17) for more details on loss allowance of trade receivables for the years ended 31 December 2019 and 2018. (Please refer to Note 12 for more details on credit risk management.)

• 138 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(5) Inventories

Inventories
Raw materials Supplies & parts Work in progress Finished goods Merchandise Total	As of 31 December
	2019	2018
	$1,290,327 43,692 276,183 1,469,587 1,419,648 $4,499,437	$1,178,724 40,602 186,773 1,244,919 876,936
		$3,527,954

The inventory cost recognized as expenses for the years ended 31 December 2019 and 2018 were NT$13,296,502 thousand and NT$11,725,308 thousand, respectively. The price reduction of inventories related to cost of goods sold were NT$6,414 thousand and NT$22,238 thousand.

No inventories were pledged.

(6) Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value through other comprehensive income – Non-current Emerging companies stocks Unlisted companies stocks Total	As of 31 December	As of 31 December
	2019 $18,797 266,959 $285,756	2018
		$15,698 261,029
		$276,727

The Group disposed of the unlisted stocks of General Research of Electronics Inc. which were reported under equity instrument investments measured at fair value through other comprehensive income on 29 June 2018. Upon derecognition, the fair value of the investments was NT$0 thousand, and the cumulative disposal loss of NT$23,184 thousand was transferred from other components of equity to retained earnings.

• 139 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Group disposed of the listed stocks of INPAQ Technology Co., Ltd. which were reported under equity instrument investments measured at fair value through other comprehensive income on 18 April 2018 and 2 May 2018. Upon derecognition, the fair values of the investments were NT$913 thousand and NT$187,300 thousand and the cumulative disposal gain of NT$107 thousand and NT$19,725 thousand was transferred from other components of equity to retained earnings.

On 23 April 2018, the Group invested NT$646 thousand in Gongwin Biopharm Holdings Co., Ltd. In consideration of the Group’s investment strategy, the Group disposed of the emerging stocks of Gongwin Biopharm Holdings Co., Ltd., which were reported under equity instrument investments measured at fair value through other comprehensive income during the period. Upon derecognition, the fair value of the investments was NT$791 thousand, and the cumulative disposal gain of NT$145 thousand was transferred from other components of equity to retained earnings.

The return of paid-in capital for capital reduction from Top Taiwan II Venture Capital Co., Ltd., Top Taiwan III Venture Capital Co., Ltd. and Top Taiwan VII Venture Capital Co., Ltd. for the year ended 31 December 2019 were NT$525 thousand, NT$1,220 thousand and NT$4,592 thousand.

The return of paid-in capital for capital reduction from Top Taiwan II Venture Capital Co., Ltd., Top Taiwan III Venture Capital Co., Ltd. and Top Taiwan VII Venture Capital Co., Ltd. for the year ended 31 December 2018 were NT$775 thousand, NT$1,220 thousand and NT$5,204 thousand.

Financial assets at fair value through other comprehensive income were not pledged.

• 140 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (7) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Group:

The following table lists method of the Group:	the investments accounted for using the equity	the investments accounted for using the equity	the investments accounted for using the equity
Investees Investments in associates: Listed company Argocy Research Inc. Unlisted companies SINBON Circuits & Cables LLC Top Taiwan IV Venture Capital Co., Ltd. Sardines Wisdom Technology Co., Ltd. Total	As of 31 December
	2019 Carrying amount Percentage of ownership (%) $368,261 21.40% (Note) - 5,548 20.00% - 26.64% $373,809	2018
	Carrying amount $368,261 (Note) 5,548 - $373,809	Carrying amount $297,861 32,181 24,061 - $354,103	Percentage of ownership (%)
			21.40% 40.00% 20.00% 26.64%

In the fourth quarter of 2018, the Group invested in Sardines Wisdom Technology Co., Ltd. (Sardines Wisdom) in the amount of NT$1,230 thousand, resulting in a rise in the shareholding ratio to 26.64%. Because Sardines Wisdom suffered losses and the Group didn’t intend to support Sardines Wisdom, the Group reduced the book value of the investment in Sardines Wisdom to zero through recognizing loss.

The return of paid-in capital for capital reduction from Top Taiwan IV Venture Capital Co., Ltd. for the years ended 31 December 2019 and 2018 were NT$8,400 thousand and NT$17,600 thousand, respectively.

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. were NT$1,187,680 thousand, NT$526,199 thousand as of 31 December 2019 and 2018, respectively.

• 141 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Group’s investments in Argocy Research Inc., Top Taiwan IV Venture Capital Co., Ltd., SINBON Circuits & Cables LLC (Note) and Sardines Wisdom Technology Co., Ltd. are not individually material. The aggregate financial information of the 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 31 December	For the years ended 31 December
	2019 $83,796 29,200 $112,996	2018
		$45,820 (2,107)
		$43,713

Note: On 10 January 2019, the Group invested additional USD 1,100 thousand in SINBON Circuits & Cables LLC and increased the shareholding percentage to 51%. Accordingly, SINBON Circuits & Cables LLC was consolidated. Please refer to Note 6(24) for more details.

The associates had no contingent liabilities or capital commitments as at 31 December 2019 and 2018.

Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT$373,809 thousand and NT$321,922 thousand as of 31 December 2019 and 2018; the related shares of investment income from the associates and joint ventures amounted to NT$83,796 thousand and NT$63,268 thousand for the years ended 31 December 2019 and 2018, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$29,200 thousand and NT$(2,107) thousand for the years ended 31 December 2019 and 2018, respectively; are based solely on the reports of other independent accountants.

• 142 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(8) Property, plant and equipment

• (1) Owner occupied property, plant and equipment (applicable under IFRS 16 requirements)

Cost:	Land $150,429 - 79 - (85) 5,038 $155,461	Buildings $1,663,172 - 4,203 (31,339) (45,661) 100,788 $1,691,163	Machinery and equipment $884,857 183,762 151,445 (50,473) (29,687) 8,878 $1,148,742	Office equipment $136,682 22,352 24,058 (11,453) (4,407) 10,113 $177,345	Transportatio n equipment $35,039 246 7,638 (12,902) (719) - $29,302	Other equipment $242,223 11,635 79,470 (13,512) (7,894) 3,074 $314,996	Leasehold improvements $11,910 - - - (97) - $11,813	Construction in progress and equipment pending examination $142,426 - 178,228 - (6,834) (121,196) $192,624	Total
									$3,266,738 217,995 445,121 (119,679) (95,384) 6,695
As of 1 January 2019 Additions through business combinations Additions Disposals Exchange differences Other changes As of 31 December 2019
									$3,721,486

Depreciation and

Depreciation and
impairment:	$ - - - - - $ - $155,461	$621,087 - 72,744 (7,991) (19,574) $666,266 $1,024,897	$521,689 43,278 82,756 (42,260) (17,457) $588,006 $560,776	$101,389 13,964 18,932 (10,500) (3,620) $120,165 $57,180	$25,698 246 3,137 (11,846) (531) $16,704 $12,598	$133,903 3,526 42,263 (9,830) (5,440) $164,422 $150,574	$8,971 - 2,237 - (102) $11,106 $707	$ - - - - - $ - $192,624	$1,412,737 61,014 222,069 (82,427) (46,724)
As of 1 January 2019 Additions through business combinations Depreciation Disposals Exchange differences As of 31 December 2019 Net carrying amount as at:
									$1,566,669
									$2,154,817
31 December 2019

Note:The Group adopted IFRS 16 since 1 January 2019. The Goup elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• 143 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(2) Property, plant and equipment (prior to the application of IFRS 16)

Cost:	Land $150,429 - - - - $150,429	Buildings $1,495,173 7,092 (4,987) (28,974) 194,868 $1,663,172	Machinery and equipment $760,073 138,950 (37,865) (15,691) 39,390 $884,857	Office equipment $127,138 18,295 (7,011) (2,155) 415 $136,682	Transportatio n equipment $32,603 4,632 (2,653) (628) 1,085 $35,039	Other equipment $206,706 44,197 (11,931) (4,598) 7,849 $242,223	Leasehold improvements $11,249 524 - 137 - $11,910	Construction in progress and equipment pending examination $33,349 113,627 - (1,570) (2,980) $142,426	Total
									$2,816,720 327,317 (64,447) (53,479) 240,627
As of 1 January 2018 Additions Disposals Exchange differences Other changes As of 31 December 2018
									$3,266,738

Depreciation and

Depreciation and
impairment:	$ - - - - - $ - $150,429	$572,938 65,133 (4,979) (12,005) - $621,087 $1,042,085	$509,381 50,630 (27,710) (10,612) - $521,689 $363,168	$96,297 13,001 (6,100) (1,809) - $101,389 $35,293	$26,424 2,206 (2,388) (544) - $25,698 $9,341	$118,488 27,436 (9,045) (2,976) - $133,903 $108,320	$6,882 2,022 - 67 - $8,971 $2,939	$ - - - - - $ - $142,426	$1,330,410 160,428 (50,222) (27,879) -
As of 1 January 2018 Depreciation Disposals Exchange differences Other changes As of 31 December 2018 Net carrying amount as at:
									$1,412,737
									$1,854,001
31 December 2018

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.

• 144 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(9) Other non-current assets

ther non-current assets
Prepayment for equipment Long-term deferred charges Long-term prepaid rent Refundable deposits Other assets Total	As of31 December
	2019 $167,734 76,296 (Note) 109,141 754 $353,925	2018
		$55,178 60,397 36,355 24,716 754
		$177,400

Long-term prepaid rents were payments for land use rights as of 31 December 2018.

Note:The Group adopted IFRS 16 since 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

No other non-current assets were pledged.

(10) Short-term loans

Short-term loans
Unsecured bank loans Interest rates applied	As of31 December 2019 2018 $2,728,412 $1,804,995 2019 2018 0.63%-3.25% 0.60%-5.00%
	2019 $2,728,412 2019 0.63%-3.25%
		$1,804,995 2018 0.60%-5.00%

The Group’s unused short-term lines of credits amounted to NT$488,942 thousand and NT$489,456 thousand as of 31 December 2019 and 2018, respectively.

• 145 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

Held for trading: Derivatives not designated as hedging Instruments Cross currency swaps	As of31 2019 $7,910	December
		2018
		$ -

(12) Bonds payable

Bonds payable
Liability component Principal amount Discounts on bonds payable Subtotal Less: current portion Net Embedded derivative Equity component	As of31	December
	2019	2018
	$7,200 (59)	$411,600 (7,046)
	7,141 (7,141)	404,554 (404,554)
	$-	$-
	$-	$(82)
	$211	$12,061

Issuance of convertible bonds:

On 8 June 2017, the Company issued the sixth 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: NT$500,000 thousand

Period: 8 June 2017 ~ 8 June 2020

• 146 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Redemption clauses:

• a. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (9 September 2017) and prior to 40 days before the maturity date (29 April 2020), 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.

• b. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (9 September 2017)and prior to 40 days before the maturity date (29 April 2020), at the early redemption conversion price if at least 90% in principal amount of the bonds has already been exchanged, redeemed, purchased or cancelled.

• c. The Company may redeem the bonds in cash, within 5 trading days after the base date of withdrawing the bonds as stated on the “Withdrawal of Convertible Bonds Notice”, at the par value if the bondholders do not reply to the share affair agency in writing before the base date.

Reversal clauses:

• a. The bondholders have the right to require the Company to redeem all or any portion of the bonds, 30 days prior to 2 year anniversary (8 June 2019) of the issuance, at the principal amount of the bonds with an interest calculated at the rate of 0.5% per annum.

Terms of Exchange:

• a. Underlying Securities: Common shares of the Company

• b. Exchange Period: The bonds are exchangeable at any time on or after 9 September 2017 and prior to 8 June 2020 into common shares of the Company.

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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)

• c. Exchange Price and Adjustment: The exchange price was originally NT$76.6 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture.

In accordance with IFRS 9, said financial instrument is classified as an embedded derivative so the exercise price of the embedded put option is allocated to the liability component and 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. The difference between the equity component and the book value was recognized in profit or loss. The difference between the liability component and the book value was recognized in “Share premium-warrants”. The financial assets of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT$0 thousand and NT$82 thousand as at 31 December 2019 and 2018, respectively.

The convertible bonds that have already been converted were NT$492,800 thousand and NT$88,400 thousand as at 31 December 2019 and 2018, respectively.

• (13) Long-term deferred revenue

Long-term deferred revenue
Beginning balance Amortization Exchange differences Ending balance Deferred revenue - related to assets	For the years ended 31 December
	2019 2018 $15,505 $16,256 (371) (377) (522) (374) $14,612 $15,505 As of 31 December	2018
		$16,256 (377) (374)
		$15,505
	2019 $14,612	2018
		$15,505

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.

• 148 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(14) Post-employment benefits

Defined contribution plan

The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company and its domestic subsidiaries have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Subsidiaries located in the People’s Republic of China will contribute social 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.

Pension expenses under the defined contribution plan for the years ended 31 December 2019 and 2018 were NT$37,823 thousand and NT$28,514 thousand, 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.

• 149 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 NT$4,560 thousand to its defined benefit plan during the 12 months beginning after 31 December 2019.

The weighted average duration of the defined benefits obligation was 13.5 years as of 31 December 2019.

Pension costs recognized in profit or loss are as follows:

Current service costs Net interest on the net defined benefit liabilities(Assets) Total	For the years ended 31 December	For the years ended 31 December
	2019	2018
	$1,197 948	$1,340 1,185
	$2,145	$2,525

• 150 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Reconciliations of liabilities (assets) of the defined benefit obligation and plan assets at fair value are as follows:

plan assets at fair value are as follows:
Defined benefit obligation Plan assets at fair value Net defined benefit liabilities, noncurrent recognized on the consolidated balance sheets	31 Dec. 2019 $138,518 (62,086) $76,432	As of
		31 Dec. 2018 $144,516 (56,006) $88,510	1 Jan. 2018
			$147,616 (58,320)
			$89,296

Reconciliation of liabilities (assets) of the defined benefit plan are as follows:

follows:
As of 1 January 2018 Current service cost Interest expense (income) Subtotal Remeasurements of the defined benefit liabilities /assets: Actuarial gains and losses arising from changes in demographic assumptions Experience adjustments Remeasurements of the defined benefit assets Subtotal Payments of benefit obligation Contributions by employer As of 31 December 2018 Current period service costs Interest expense (income) Subtotal		As of
	Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities
	$147,616 1,340 1,992	$ (58,320) - (807)	$89,296 1,340 1,185
	150,948 4,248 (1,300) -	(59,127) - - (1,778)	91,821 4,248 (1,300) (1,778)
	2,948	(1,778)	1,170
	(9,380) -	9,380 (4,481)	- (4,481)
	144,516 1,197 1,589	(56,006) - (641)	88,510 1,197 948
	147,302	(56,647)	(90,665)

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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)

Remeasurements of the defined benefit liabilities /assets: Actuarial gains and losses arising from changes in demographic assumptions Experience adjustments Remeasurements of the defined benefit assets Subtotal Payments of benefit obligation Contributions by employer As of 31 December 2019		As of
	Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities
	(7,651) -	- (2,012)	(7,651) (2,012)
	(7,651)	(2,012)	(9,663)
	(1,133) -	1,133 (4,560)	- (4,560)
	$138,518	$(62,086)	$76,432

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

benefit plan are shown below:
Discount rate Expected rate of salary increases	As of 31 December
	2019	2018
	1.10% 3.00%	1.10% 3.00%

Sensitivity analysis for significant assumption are 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%	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December
	2019		2018
	Defined benefit obligation increase	Defined benefit obligation decrease	Defined benefit obligation increase	Defined benefit obligation decrease
	$ - 7,408 14,967 -	$6,849 - - 13,082	$ - 9,065 18,380 -	$8,320 - - 15,837

• 152 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

(15) Equities

(a) Common stock

The Company’s authorized capital was NT$4,500,000 thousand as of 31 December 2019 and 2018. The issued capital was NT$2,325,237 thousand and NT$2,257,273 thousand in a total of 232,524 thousand shares and 225,727 thousand shares, respectively. Each share has one voting right and a right to receive dividends.

The investors requested to convert the Company’s convertible bonds into common stocks by issuing new common shares from 1 January 2019 to 31 December 2019 amount to NT$59,740 thousand in a total of 5,975 thousand shares and amount to NT$58,283 thousand had been completed the registration process for 5,829 thousand shares as of 31 December 2019. The rest has not yet been completed. Therefore, the accumulated book value of certificates of bond - to - stock conversion is NT$1,457 thousand in a total of 146 thousand shares.

As of 1 January 2019, the accumulated book value of certificates of bond - to - stock conversion that had completed the registration process amounted to NT$9,681 thousand in a total of 968 thousand shares as of 31 March 2019.

• 153 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(b) Capital surplus

(b) Capital surplus
Additional paid-in capital Treasury share transactions Share of changes in net assets of associates and joint ventures accounted for using the equity method Difference between consideration received and carrying amount of interests in subsidiaries acquired/disposed of Premium from merger Share options Total	As of 31 December
	2019 $1,241,283 5,749 (1,690) (17,477) 705 211 $1,228,781	2018
		$890,036 5,749 (1,690) (2,775) 705 12,061
		$904,086

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% as legal reserve

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

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

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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 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. The Company’s Articles of Incorporation further provide that no more than 90% of the dividends to shareholders, if any, could be paid in the form of share dividends. Accordingly, at least 10% of the dividends must be paid in the form of cash.

As the Company is undergoing a growth stage, the policy of dividend distribution should reflect its long-term financial planning. The Board of Directors shall make the distribution proposal annually and present it at the Shareholder’s meeting every year. The distribution of shareholders dividend shall be allocated cash dividends to be distributed may not be less than 10% of total dividends to be distributed.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in 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.

Pursuant to existing regulation, the Company is required to appropriate addition special reserve in the amount equal to the net debit balance of the other components of shareholders’ equity. However, if any of the debit elements is reversed, the special reverse in the amount equal to the reversal maybe released for earnings distribution or offsetting accumulated deficit.

Following the adoption of TIFRS, the FSC on 6 April 2012 issued Order No. Jin-Guan-Cheng-Fa-Zi-1010012865, which sets out the following provisions for compliance:

• 155 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

The Company did not reverse any special reserve as a result of use, disposal or reclassification of related assets in 31 December 2019 and 2018.

Details of the 2019 and 2018 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 20 March 2020 and 6 June 2019, respectively, are as follows:

Common stock -cash dividend Legal reserve Special reserve Total	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2019	2018	2019	2018
	$1,233,721 172,624 139,290	$1,026,622 141,348 108,492	$5.3	$4.5
	$1,545,635	$1,276,462

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

• 156 -

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

Non-controlling interests
Beginning balance Gains 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 foreign operations Disposal of the shares of the subsidiary Dividend distribution of the subsidiary Acquisition of the shares of the subsidiary Acquisition of new shares in a subsidiary not in proportionate to ownership interest Ending balance		For the years ended 31 December
		2019	2018
		$223,989 (40,660) (4,637) 92 (2,102) 63,400 39,724 $279,806	$211,619 (41,948) (2,681) (1,120) - (906) 59,025 $223,989

(16) Operating revenue

Revenue from contracts with customers Sale of goods Other operating revenue Total	For the years ended 31 December 2019 2018 $17,757,374 $15,437,646 128,796 207,607 $17,886,170 $15,645,253
	2019 $17,757,374 128,796 $17,886,170

Analysis of revenue from contracts with customers for the years ended 31 December 2019 and 2018 are as follows:

• 157 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(1) Disaggregation of revenue

For the year ended 31 December 2019

	Green	Industrial	Medical
	Energy	Application	Health	Automotive	Communication	Total
Sale of goods	$3,934,043	$5,295,767	$1,730,263	$1,654,895	$5,142,406	$17,757,374
Other	1,170	48,894	15,975	15,279	47,478	128,796
operating
revenues
Total	$3,935,213	$5,344,661	$1,746,238	$1,670,174	$5,189,884	$17,886,170
Timing of
revenue
recognition :
At a point	$3,935,213	$5,344,661	$1,746,238	$1,670,174	$5,189,884	$17,886,170
in time
Over time	-	-	-	-	-	-
Total	$3,935,213	$5,344,661	$1,746,238	$1,670,174	$5,189,884	$17,886,170
	For the year	ended 31 December 2018
	Green	Industrial	Medical
	Energy	Application	Health	Automotive	Communication	Total
Sale of goods	$3,086,850	$4,217,090	$1,503,019	$1,606,493	$5,024,194	$15,437,646
Other	10,383	67,341	24,001	25,653	80,229	207,607
operating
revenues
Total	$3,097,233	$4,284,431	$1,527,020	$1,632,146	$5,104,423	$15,645,253
Timing of
revenue
recognition :
At a point	$3,097,233	$4,284,431	$1,527,020	$1,632,146	$5,104,423	$15,645,253
in time
Over time	-	-	-	-	-	-
Total	$3,097,233	$4,284,431	$1,527,020	$1,632,146	$5,104,423	$15,645,253

• 158 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(2) Contract balances

Contract liabilities – current

Sales of goods		As of
	31 Dec. 2019	31 Dec. 2018	1 Jan. 2018
	$964,723	$328,405	$153,313

For the years ended 31 December 2019 and 2018, contract liabilities increase as the consideration received from customers did not satisfy its performance obligations.

• (3) Transaction price allocated to unsatisfied performance obligations

None.

• (4) Assets recognized from costs to fulfil a contract

None.

• (17) Expected credit losses

Expected credit losses
Operation expense- Expected credit losses Trade receivables	For the years ended 31 December
	2019	2018
	$669	$1,061

Please refer to Note 12 for more details on credit risk.

The Group measures the loss allowance of its trade receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as at 31 December 2019 and 2018 are as follows:

• 159 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

31 December 2019

Not yet due (Note) Gross carrying amount $4,648,870 Loss ratio -% Lifetime expected credit losses - Carrying amount $4,648,870 31 December Not yet due (Note) Gross carrying amount $4,359,983 Loss ratio -% Lifetime expected credit losses - Carrying amount $4,359,983		Overdue		>=121 days $57,556 30%-100% (27,176) $30,380 >=121 days $37,430 30-100% (27,655) $9,775	Total
	<=30 days 31-60 days	61-90 days $13,512 -% - $13,512 Overdue	91-120 days $12,298 -% -
	$158,765 $59,025 -% -%				$4,950,026
	- -				(27,176)
	$158,765 $59,025		$12,298		$4,922,850
	2018				Total
	<=30 days 31-60 days	61-90 days $8,524 -% - $8,524	91-120 days $6,895 -% -
	$185,637 $22,533 -% -%				$4,621,002
	- -				(27,655)
	$185,637 $22,533		$6,895		$4,593,347

Note: The Group’s note receivables are not overdue.

The movement in the provision for impairment of note receivables and trade receivables during the years ended 31 December 2019 and 2018 are as follows:

are as follows:
As of 1 January 2019 Write off Addition/(reversal) for the current period Exchange difference As of 31 December 2019 As of 1 January 2018 (in accordance with IAS 39) As of 1 January 2018 transition adjustment to retained earnings As of 1 January 2018 (in accordance with IFRS 9) Write off Addition/(reversal) for the current period Exchange difference As of 31 December 2018	Note receivables $ - - - - $- $ - - - - - - $-	Trade receivables
		$27,655 (757) 669 (391)
		$27,176
		$51,620 -
		51,620 (25,733) 1,061 707
		$27,655

• 160 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (18) Leases

• (1) The Group is a lessee (Adoption of the related disclosure in IFRS 16)

The Group leases various properties, including real estate such as land and buildings, machinery and equipment, transportation equipment, office equipment and other equipment. The lease terms range from 1 to 16 years.

The Group’s leases effect on the financial position, financial performance and cash flows are as follow:

• A. Amounts recognized in the balance sheet

• (a) Right-of-use asset

The carrying amount of right-of-use assets

Land Buildings Machinery and equipment Transportation equipment Total	As of 31 December	As of 31 December
	2019	2018(Note)
	$35,053 138,639 19,195 25,252
	$218,139

Note: The Group adopted IFRS 16 since 1 January 2019. The

Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

During the year ended 31 December 2019, the Group’s additions to right-of-use assets amounting to NT$142,375 thousand.

• 161 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(b) Lease liabilities

Lease liabilities
Lease liabilities Current Non-Current Total	As of 31 December
	2019	2018(Note)
	$51,312 131,633
	$182,945

Please refer to Note 6(20)(c) for the interest on lease liabilities recognized during the year ended 31 December 2019 and refer to Note 12 (5) liquidity risk management for the maturity analysis for lease liabilities as at 31 December 2019.

Note: The Group adopted IFRS 16 since 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Land Buildings Machinery and equipment Transportation equipment Other equipment Total	For the years ended 31 December	For the years ended 31 December
	2019	2018(Note)
	$1,070 43,893 3,745 9,641 828
	$59,177

Note:The Group adopted IFRS 16 since 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• 162 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• C. Income and costs relating to leasing activities

The expenses relating to short-term leases	For the years ended 31 December	For the years ended 31 December
	2019	2018(Note)
	$23,399

Note: The Group adopted IFRS 16 since 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• D. Cash outflow related to lessee and lease activity

During the year ended 31 December 2019, the Group’s total cash outflows for leases amounting to NT$89,704 thousand.

• (2) Operating lease commitments - Group as a lessee (applicable to the disclosure requirement in IAS 17)

The Group has entered into commercial leases on certain property, plant and equipment. These leases have an average life of three to five years with no renewal option included in the contracts. There are no restrictions placed upon the Group by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 31 December 2019 and 2018 are as follows:

Not later than one year Later than one year and not later than five years Later than five years Total	As of 31 December	As of 31 December
	2019(Note)	2018
		$48,982 46,510 -
		$95,492

• 163 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Operating lease expense recognized as followed:

Minimum lease payments Contingent rents Total	For the years ended 31 December	For the years ended 31 December
	2019(Note)	2018
		$45,734 -
		$45,734

• Note: The Group adopted IFRS 16 since 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• (19) Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2019 and 2018:

2019 and 2018:
	For theyears ended 31 December
	2019				2018
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$1,262,716	$1,298,139	$2,560,855	$755,356	$1,097,325	$1,852,681
Labor and health insurance	132,763	142,728	275,491	101,045	126,907	227,952
Pension	12,630	27,338	39,968	6,584	24,455	31,039
Other employee benefits expense	72,001	69,209	141,210	73,667	56,997	130,664
Depreciation	164,230	117,016	281,246	88,698	71,730	160,428
Amortization	12,300	39,822	52,122	9,309	35,825	45,134

The number of employees for Company and its subsidiaries were 6,604 and 5,912 as of 31 December 2019 and 2018.

According to the Articles of Incorporation, 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. 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.

• 164 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Based on profit of 31 December 2019, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2019 to be 1.50% and 0.87% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2019 amount to NT$30,000 thousand and NT$17,350 thousand respectively, recognized as employee benefits expense.

A resolution was passed at the Board of Directors meeting held on 20 March 2020 to distribute NT$30,000 thousand and NT$17,350 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2019, respectively. Differences between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December 2019 are recognized in profit or loss of the subsequent year in 2019.

The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2018 amount to NT$24,000 thousand and NT$15,300 thousand, 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 2018.

(20) Non-operating income and expenses

(a) Other income

Other income
Sample income Dividend income Interest income Financial assets measured at amortized costs Others Total	For theyears ended 31 December
	2019 $49,471 29,438 13,476 104,901 $197,286	2018
		$44,491 18,117 11,454 52,031
		$126,093

• 165 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(b) Other gains and losses

For theyears ended 31 December 2019 2018 Foreign exchange gains, net $36,192 $113,221 Gains on disposal of investments 4,847 - Gains (Losses) on disposal of property, plant and equipment 28,232 (4,626) Gains of financial asset at fair value through profit or loss(Note1) 1,707 38,949 (Losses) Gains of financial liabilities at fair value through profit or loss(Note2) (7,910) 44,727 Other expense (18,776) (32,434) Total $44,292 $159,837	For theyears ended 31 December	For theyears ended 31 December
	2019	2018 $113,221 - (4,626) 38,949 44,727 (32,434) $159,837
	$44,292

Note:

1. Balances were arising from financial assets mandatorily measured at fair value through profit or loss.

2. Balances were arising from held for trading financial liabilities.

(c) Finance costs

	For the years ended 31 December	For the years ended 31 December
	2019	2018
Interest on loans from bank	$41,469	$37,726
Interest on bonds payable	1,769	5,645
Interest on lease liabilities	5,731	(Note)
Total	$48,969	$43,371

Note:The Group adopted IFRS 16 since 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• 166 -

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 31 December 2019:

Arising during theperiod Reclassification adjustments during the period Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans $9,663 $ - Unrealized gains from equity instruments investments measured at fair value through other comprehensive income 15,392 - Share of other comprehensive income of associates and joint ventures accounted for using the equity method 35,149 - To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of a foreign operation (239,925) - Total of other comprehensive income $(179,721) $ - For the year ended 31 December 2018 Arising during theperiod Reclassification adjustments during the period Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans $(1,170) $ - Unrealized gains from equity instruments investments measured at fair value through other comprehensive income 110,611 - Share of other comprehensive income of associates and joint ventures accounted for using the equity method (2,107) - To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of a foreign operation (106,632) - Total of other comprehensive income $702 $ -	Arising during theperiod	Reclassification adjustments during the period	Other comprehensiv e income, before tax	Income tax relating to components of other comprehensiv e income	Other comprehensiv e income, net of tax
	$9,663 15,392 35,149 (239,925)	$ - - - -	$9,663 15,392 35,149 (239,925)	$(1,933) - - 45,457	$7,730 15,392 35,149 (194,468)
	$(179,721)	$ -	$(179,721)	$43,524	$136,197
			Other comprehensiv e income, before tax	Income tax relating to components of other comprehensiv e income	Other comprehensiv e income, net of tax
	$(1,170) 110,611 (2,107) (106,632)	$ - - - -	$(1,170) 110,611 (2,107) (106,632)	$1,624 - - 22,757	$454 110,611 (2,107) (83,875)
	$702	$ -	$702	$24,381	$25,083

• 167 -

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

Based on the amendments to the Income Tax Act announced on 7 February 2018, the Company’s applicable corporate income tax rate for the year ended 31 December 2018 has changed from 17% to 20%. The corporate income surtax on undistributed retained earnings has changed from 10% to 5%.

The major components of income tax expense (income) are as follows:

Income tax expense recognized in profit or loss

Current income tax expense : Current income tax charge Adjustments in respect of current income tax of prior periods Deferred tax expense: Deferred tax expense relating to origination and reversal of temporary differences Adjustments of prior year’s defferred income tax Reversal of deferred income tax Deferred tax expense (income) relating to changes in tax rate or the imposition of new taxes Total income tax expense	For the years ended 31 December	For the years ended 31 December
	2019 $526,626 (62,155) (25,202) 47,741 3,686 716 $491,312	2018
		$422,390 (24,246) 131,584 144 (2,058) 20,725
		$548,539

• 168 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Income tax relating to components of other comprehensive income

Deferred tax income: Exchange differences on translation of foreign operations Remeasurements of defined benefit plans Income tax relating to components of other comprehensive income	For the years ended 31 December	For the years ended 31 December
	2019 $(45,457) 1,933 $(43,524)	2018
		$(22,757) (1,624)
		$(24,381)

A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

Accounting profit before tax from continuing operations At the Company’s statutory income tax rate Tax effect of revenues exempt from taxation Tax effect of expenses not deductible for tax purposes Tax effect of deferred tax assets/liabilities Corporate income surtax on undistributed retained earnings Tax effect of different tax rates for entities in other tax regions Adjustments in respect of deferred income tax of prior periods Adjustments in respect of current income tax of prior periods Deferred tax expense (income) relating to changes in tax rate or the imposition of new taxes Total income tax expense recognized in profit or loss	For the years ended 31 December	For the years ended 31 December
	2019	2018
	$2,169,163	$1,920,068
	$433,833 (104,517) 3,216 229,956 5,066 (62,544) 47,741 (62,155) 716	$384,014 (55,486) 3,906 189,009 14,485 15,988 144 (24,246) 20,725
	$491,312	$548,539

• 169 -

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 31 December 2019

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 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 Loss allowance Allowance for sales discounts Convertible bonds Depreciation Deferred tax (income) /expense Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $37,648 (286,623) 7,901 (220) 5,897 (8,261) 9,501 10,053 3,876 7,087 974 - (1,052) (2,085) $(215,304) $82,937 $298,241	Recognized in profit or loss $ - (40,322) 9,155 5,012 2,321 1,732 - 682 (1,606) (3,686) - 189 8 (426) $(26,941)	Recognized in other comprehensive income $45,457 - - - - - (1,933) - - - - - - - $43,524	Exchange differences $ - 3,081 - - (95) - - (97) (78) - - - - 86 $2,897	Balance as of 31 December $83,105 (323,864) 17,056 4,792 8,123 (6,529) 7,568 10,638 2,192 3,401 974 189 (1,044) (2,425)
					$(195,824)
					$138,038
					$333,862

• 170 -

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 31 December 2018

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 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 Loss allowance Convertible bonds Depreciation Deferred tax (income) /expense Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $14,891 (156,340) 5,963 (3,040) 18,275 7,119 7,877 8,576 4,065 4,273 709 (825) (513) $(88,970) $71,748 $160,718	Recognized in profit or loss $ - (128,952) 1,938 2,820 (12,257) (15,380) - 293 (95) 2,814 265 (227) (1,614) $(150,395)	Recognized in other comprehensive income $22,757 - - - - - 1,624 - - - - - - $24,381	Exchange differences $ - (1,331) - - (121) - - 1,184 (94) - - - 42 $(320)	Balance as of 31 December $37,648 (286,623) 7,901 (220) 5,897 (8,261) 9,501 10,053 3,876 7,087 974 (1,052) (2,085)
					$(215,304)
					$82,937
					$298,241

• 171 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Company shall recognize the relevant deferred income tax liabilities for the income tax payable that may arise when the undistributed surplus of a foreign subsidiary is remitted back, in accordance with the undistributed surplus expected to be allocated by the future subsidiary.

The assessment of income tax returns

As of 31 December 2019, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

The Company Subsidiary- Kwan-Ze Corporation Ltd. Subsidiary- T-CONN Precision Co., Ltd. Subsidiary- Radbon Avionics Inc.	The assessment of income tax returns
	Assessed and approved up to 2017 Assessed and approved up to 2017 Assessed and approved up to 2017 Assessed and approved up to 2017

(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.

• 172 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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$) (b) Diluted earnings per share Profit attributable to ordinary equity holders of the Company Add: Interest expense from convertible bonds Profit attributable to ordinary equity holders of the Company after dilution Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee compensation-stock (in thousands) Convertible bonds (in thousands) Weighted average number of ordinary shares outstanding after dilution (in thousands) Diluted earnings per share (NT$)	For the years ended 31 December	For the years ended 31 December
	2019 $1,718,511 230,104 $7.47 $1,718,511 1,415 $1,719,926 230,104 242 2,659 233,005 $7.38	2018
		$1,413,477
		225,685
		$6.26
		$1,413,477 4,516
		$1,417,993
		225,685 290 6,352
		232,327
		$6.10

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date of completion of the financial statements.

• 173 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(24) Business Combinations

Acquisition of C&C

On 10 January 2019, in order to expand the production in US , the Group invested additional USD 1,100 thousand in C&C to acquire the 11% shares with voting rights, and increased the shareholding percentage from 40% to 51%. Accordingly, C&C was consolidated.

The Group has selected to measure the non-controlling interest of C&C at fair value.

The fair value of the identifiable assets and liabilities of C&C at the date of acquisition were:

Asset Cash and cash equivalent Account receivable Inventories Prepayments Property, plant and equipment Right-of-use asset Liability Short-term loans Account payable Lease liability, current Other payables Current portion of long-term loans Other current liabilities Lease liability, noncurrent Long-term loans Identifiable net assets	Amount
	$9,863 56,292 91,015 1,943 156,981 11,152
	327,246
	74,569 63,162 2,209 30,965 7,298 9,494 8,164 1,999
	197,860
	$129,386

• 174 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Acquisition consideration

Acquisition consideration
Cash flow analysis of acquisition: Transaction costs of the acquisition Net cash acquired with the subsidiary Net cash flow on acquisition	Amount
	$(33,882) 9,863
	$(24,019)

• (25) Change of Ownership of subsidiaries

Acquisition of issued shares of subsidiaries

On 18 January 2018, the Group further acquired 10% shares with voting rights from Radbon which is a sub-subsidiary of the Group. Thus, the Group increased its ownership in the entity to 100%. Cash paid to non-controlling interest shareholder amounted to NT$1,426 thousand. Net asset of Radbon was NT$9,060 thousand. The additional equity information such as reduction of non-controlling interests and adjustment of other comprehensive income or loss are as follows:

comprehensive income or loss are as follows:
Cash consideration paid to the non-controlling shareholders Decrease to non-controlling interests Difference in additional paid-in capital from investee under equity method	Amount
	$1,426 (906)
	$520

Acquisition of new shares in a subsidiary not proportionate to ownership

interest

T-CONN Precision Co., Ltd.(T-CONN) issued new shares on 10 December 2019, however the Group did not purchase the new shares according to its shareholding percentage, consequently the ownership interest in T-CONN was reduced to 61.18%. The Group received additional cash from the issuance of new shares in the amount of NT$41,466 thousand. The following table is a schedule of interest disposed of by T-CONN including changes in non-controlling interests:

• 175 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Additional cash received from the issuance of new shares Increase to non-controlling interests Difference recognized in capital surplus or retained earning within equity		Amount
		$(41,466) 39,724
		$(1,742)

Radbon issued new shares on 27 June 2018, however the Group did not purchase the new shares according to its shareholding percentage, consequently the ownership interest in Radbon was reduced to 55%. The Group received additional intangible assets from the issuance of new shares in the amount of NT$27,000 thousand. The carrying amount of Radbon’s net assets was NT$60,000 thousand. The following table is a schedule of interest disposed of by Radbon including changes in non-controlling interests:

non-controlling interests:
Additional intangible assets received from the issuance of new shares Increase to non-controlling interests Difference recognized in capital surplus or retained earning within equity		Amount
		$(27,000) 27,000
		$ -

7. Related party transactions

Information of the related parties that had transactions with the Group during the financial reporting period is as follows:

Name and nature of relationship of the related parties

Name of the relatedparties Argosy Research Inc. Shanghai Huangze Electronic Co., Ltd. SINBON Circuits & Cables LLC(Note)	Nature of relationship of the related parties
	Associate Substantive related party Associate

Note: On 10 January 2019, the Group acquired additional investment of SINBON Circuits & Cables LLC, its ownership raised from 40% to 51% and transfers to consolidated individual.

• 176 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Significant transactions with related parties

(a) Sales

Associates Others	For the years ended 31 December	For the years ended 31 December
	2019 $36,597	2018
		$9,983

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 were 45~75 days from FOB shipping point. The outstanding balance as of 31 December 2019 and 2018 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

(b) Purchases

Associates Others Other related parties Others Total	For the years ended 31 December	For the years ended 31 December
	2019 $78 124 $202	2018
		$2,177 115
		$2,292

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 between one to four months.

• 177 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(c) Accounts Receivable-Related Parties

Associates Others	As of 31 December	As of 31 December
	2019 $36,431	2018
		$2,027

(d) Others Receivable-Related Parties

Associates Others	As of 31 December	As of 31 December
	2019 $ -	2018
		$1,752

(e) Accounts Payable-Related Parties

Associates Others	As of 31 December	As of 31 December
	2019 $ -	2018
		$183

• (f) Others Payable-Related Parties

Associates Others	As of 31 December	As of 31 December
	2019 $125	2018
		$17

• (g) Key management personnel compensation

Short-term employee benefits Post-employment benefits Total	For the years ended 31 December	For the years ended 31 December
	2019 $220,314 39,969 $260,283	2018
		$176,475 31,039
		$207,514

• 178 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

8. Assets pledged as security

None.

9. Commitments and contingencies

The Company provided guarantees for subsidiaries’ financing to banks for the year ended 31 December 2019. Please refer to Note 13.1(2).

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Financial instruments

• (1) Categories of financial instruments

Financial assets

Financial assets
Financial assets at fair value through profit or loss: Mandatorily measured at Fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost(Note1) Total	As of 31 December
	2019 $177,788 285,756 8,615,872 $9,079,416	2018
		$171,099 276,727 7,378,464
		$7,826,290

• 179 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Financial liabilities Financial liabilities at amortized cost: Short-term loans Notes and accounts payable Bonds payable (including current portion with maturity less than 1 year) Long-term loans (including current portion with maturity less than 1 year) Others payables Lease liability Subtotal Financial liabilities at fair value through profit or loss: Held for trading Total	As of 31 December	As of 31 December
	2019 $2,728,412 3,594,399 7,141 10,163 1,063,082 182,945 7,586,142 7,910 $7,594,052	2018
		$1,804,995 3,337,688 404,554 10,041 875,407 (Note2)
		6,432,685
		-
		$6,432,685

Note:

• 1.Including cash and cash equivalents, notes receivable, trade receivables and other receivables.

• 2.The Group adopted IFRS 16 on 1 January 2019. The Group elected not to restate prior periods in accordance with the transition provision in IFRS 16.

(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.

• 180 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

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

(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.

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.

• 181 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 debt instrument investments at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit.

Pre-tax sensitivity analysis of changes in related risk factors for the years ended 31 December 2019 and 2018 are as follows:

For the year ended 31 December 2019

Main Risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% NTD/RMB rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$12,064 +/−$460 +/−$2,746	Sensitivity of equity
			+/−$237 +/−$12,396 -

For the year ended 31 December 2018

Main Risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% NTD/RMB rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$16,917 +/−$115 +/−$1,609	Sensitivity of equity
			+/−$251 +/−$9,712 -

• 182 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Equity price risk

The fair value of the Group’s listed and unlisted equity securities and conversion rights of the Euro-convertible bonds issued are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s listed and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income, while conversion rights of the Euro-convertible bonds issued are classified as financial liabilities at fair value through profit or loss as it does not satisfy the definition of an equity component. 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.

At the reporting date, a change of 10% in the price measured at fair value through profit or loss could increase/decrease the Group’s profit for the years ended 31 December 2019 and 2018 by NT$10,603 thousand and NT$8,003 thousand, respectively.

At the reporting date, a change of 10% in the price of the listed companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$1,880 thousand and NT$1,570 thousand on the equity attributable to the Group for the years ended 31 December 2019 and 2018, respectively.

Please refer to Note (12)9 for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

• 183 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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.

Credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of 31 December 2019 and 2018, amounts receivables from top ten customers represented 28% and 22% 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. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings, 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 borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

• 184 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Non-derivative financial liabilities

As of31 December2019 Loans Account payables Convertible bonds Lease liabilities As of 31 December 2018 Loans Account payables Convertible bonds	Less than 1year $2,733,189 3,594,399 7,213 57,103 $1,831,295 3,337,688 408,610	2 to 3years $5,651 - - 89,364 $4,823 - -	4 to 5years $2,339 - - 50,231 $2,871 - -	> 5years $ - - - 2,866 $ - - -	Total
					$2,741,179 3,594,399 7,213 199,564 $1,838,989 3,337,688 408,610

Derivative financial liabilities

As of31 December2019 Cross Currency swaps Net settlement - outflow	Less than 1year $(7,910)	2 to 3years $ -	4 to 5years $ -	> 5years $ -	Total
					$(7,910)

As of 31 December 2018

None

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

• (6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2019:

As of 1 January 2019 Cash flow Non-cash change Acquisition Currency change As of 31 December 2019	Short-term loans $1,804,995 848,848 - 74,569 - $2,728,412	Long-term deferred income $15,505 (371) - - (522) $14,612	Long-term loan(including maturity within a year) $10,041 (9,175) - 9,297 - $10,163	Lease liabilities $90,771 (66,305) 148,106 10,373 - $182,945	Deposits received $13,430 (13,428) - - - $2	Total liabilities from financing activities
						$1,934,742 759,569 148,106 94,239 (522)
						$2,936,134

• 185 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Reconciliation of liabilities for the year ended 31 December 2018:

As of 1 January 2018 Cash flow Currency change As of 31 December 2018	Short-term loans $1,594,624 210,371 - $1,804,995	Long-term deferred income $16,256 (377) (374) $15,505	Long-term loan(including maturity within a year) $ - 10,041 - $10,041	Deposits received $ - 13,430 - $13,430	Total liabilities from financing activities
					$1,610,880 233,465 (374)
					$1,843,971

• (7) 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.

• 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).

• 186 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• 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(9) for fair value measurement hierarchy for financial instruments of the Group.

• (8) Derivative financial instruments

The related information for derivative financial instruments not qualified for hedge accounting and not yet settled as of 30 June 2019, 31 December 2018 and 30 June 2018 are as follows:

• 187 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Cross currency swaps and currency option contracts

The Group entered into cross currency swaps and currency option 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 cross currency swaps option and currency option contracts:

Items As of 31 December 2019 Cross currency swaps As of 31 December 2018 Cross currency swaps	Notional Amount(in thousands) USD 17,000 USD 28,000	Contract Period
		11 January 2019 – 27 February 2020 2 January 2018 – 13 March 2019

Embedded derivatives

The embedded derivatives arising from issuing convertible bonds have been separated from the host contract and carried at fair value through profit or loss. Please refer to Note 6(12) for further information on this transaction.

The counterparties for the aforementioned derivatives transactions are well known local or overseas banks, as they have sound credit ratings, the credit risk is insignificant.

With regard to the forward exchange contracts, currency option contracts and cross currency swaps, as they 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.

• (9) 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:

• 188 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 follows:

As of 31 December 2019

As of 31 December 2019
Financial assets: Financial assets at fair value through profit or loss Funds Stocks Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income Financial liabilities: Financial liabilities at fair value through profit or loss Cross currency swaps	Level 1 $71,754 106,034 18,797 $ -	Level 2 $ - - - $7,910	Level 3 $ - - 266,959 $ -	Total
				$71,754 106,034 285,756 $7,910

• 189 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As at 31 December 2018

As at 31 December 2018
Financial assets: Financial assets at fair value through profit or loss Funds Stocks Cross currency swaps Embedded derivative - Bond Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income	Level 1 $81,110 80,034 - - 15,698	Level 2 $ - - 9,873 82 -	Level 3 $ - - - - 261,029	Total
				$81,110 80,034 9,873 82 276,727

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2019 and 2018, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Beginning balances as of 1 January 2019 Total gains and losses recognized for the year ended 31 December 2019: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) The return of paid-in capital for capital reduction Effect of currency Ending balances as of 31 December 2019	Assets
	At fair value through other comprehensive income
	Stocks
	$261,029 12,293 (6,337) (26)
	$266,959

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Beginning balances as of 1 January 2018 Total gains and losses recognized for the year ended 31 December 2019: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) The return of paid-in capital for capital reduction Ending balances as of 31 December 2018	Assets
	At fair value through other comprehensive income
	Stocks
	$231,424 36,804 (7,199)
	$261,029

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of 31 December 2019

Financial assets: At fair value through profit or loss Stocks and others	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Market approach	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s profit or loss by NT$26,696 thousand

• 191 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As of 31 December 2018

Financial assets: At fair value through profit or loss Stocks and others	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Asset approach	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s profit or loss by NT$26,103 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group’s Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies at each reporting date.

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

As of 31 December 2019 Level 1 Level 2 Level 3 Total Financial assets not measured at fair value but for which the fair value is disclosed: Investments accounted for using the equity method(please refer to Note 6(7)) $1,187,680 $ - $ - $1,187,680

• 192 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

As of 31 December 2018 Financial assets not measured at fair value but for which the fair value is disclosed: Investments accounted for using the equity method(please refer to Note 6(7))	Level 1	Level 2	Level 3	Total
	$526,199	$ -	$ -	$526,199

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Financial assets Monetaryitems: USD RMB EUR Financial liabilities Monetaryitems: USD RMB EUR	As of	31 December 2019 Foreign exchange rate NTD 30.11 $3,679,682 4.32 2,824,878 33.75 142,927 30.11 2,449,527 4.32 1,539,264 33.75 30,630	As of	31 December 2018	31 December 2018
	Foreign currencies $122,224 653,646 4,235 81,363 356,169 908	Foreign exchange rate 30.11 4.32 33.75 30.11 4.32 33.75	Foreign currencies $101,785 558,943 3,066 45,923 339,406 661	Foreign exchange rate 30.73 4.48 35.20 30.73 4.48 35.20	NTD
					$3,128,157 2,501,964 107,940 1,411,342 1,519,250 23,281

The Group has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Group had NT$36,192 thousand and NT$113,221 thousand foreign exchange gains for the years ended 31 December 2018 and 2019, respectively.

• 193 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

(11) 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.

(12) Transfer of financial assets information

Part of the Group's notes receivable have been signed into with recourse contracts with financial institutions. Yet the Group transferred the cash flow rights of such receivables, the company still bear the credit risk that notes receivable can not be collected, which does not meet the derecognition of financial assets. The transaction related information is as follows:

Counterparty BOCOM Beijing Development Zone Branch HSBC Bank (China) Beijing Company Limited ICBC Anqing Tongcheng Branch BOCOM Anqing Tongcheng Branch HSBC Bank (China) Shanghai Company Limited	Amount to be transferred $212,301 158,607 59,082 15,353 3,890	Amount have been advanced（Note）
		$212,301 158,607 59,082 15,353 3,890

Note: Recorded in short-term loans

• 194 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

13. Other disclosure

• (1) Information at significant transactions

• (a) Financing provided to others for the year ended 31 December 2019: Please refer to Attachment 1.

• (b) Endorsement/Guarantee provided to others for the year ended 31 December 2019: Please refer to Attachment 2.

• (c) Securities held as of 31 December 2019: 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 capital stock for the year ended 31 December 2019: None

• (e) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2019: 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 31 December 2019: None.

• (g) Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended 31 December 2019: Please refer to Attachment 4.

• (h) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019: Please refer to Attachment 5.

• (i) Financial instruments and derivative transactions: Please refer to Note 12 (8).

• (j) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 6.

• 195 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

• (2) Information on investees:

Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2019: Please refer to Attachment 7.

• (3) Information on investments in mainland China

• (a) Investment in Mainland China: Please refer to Attachment 8.

• (b) Directly or indirectly significant transactions through third regions with the investees in Mainland China: Please refer to Attachment 2,4,5 and 6.

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) Cable Segment: The segment focuses on manufacturing and sale of cable assemblies.

• (2) Electronic Segment: The segment is in charge of selling various electronic connectors and electronic components.

• (3) Management Operation Segment: The segment focuses on managing investment and other businesses beyond the scopes of Cable Segment and Electronic Segment.

Operating segments have been aggregated to be reported as aforementioned operating segments.

• 196 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements. However income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

Information on profit or loss, assets and liabilities of the reportable segment for the year ended 31 December 2019 and 2018 were as of :

For the year ended 31 December 2019

Revenue External customer Inter-segment Total revenue Segment profit

Green Energy $3,935,213 14,144 $3,949,357 $611,162	Industrial Application $5,344,661 1,622,135 $6,966,796 $596,876	Medical Health $1,746,238 529,993 $2,276,231 $195,015	Automotive $1,670,174 506,907 $2,177,081 $186,520	Communication $5,189,884 1,575,159 $6,765,043 $579,591	Reconciliation and Eliminated (Note) $ - (4,248,338) $(4,248,338) $ -	Total
						$17,886,170 -
						$17,886,170
						$2,169,164

Note: Inter-segment revenues were eliminated when consolidated.

For the year ended 31 December 2018

Revenue External customer Inter-segment Total revenue Segment profit	Green Energy $3,086,850 63,527 $3,150,377 $398,721	Industrial Application $4,287,976 1,165,839 $5,453,815 $519,453	Medical and Health Care $1,528,284 415,518 $1,943,802 $185,139	Automotive $1,633,497 444,125 $2,077,622 $197,885	Communication $5,108,646 1,388,968 $6,497,614 $618,870	Reconciliation and Eliminated (Note) $ - (3,477,977) $(3,477,977) $ -	Total
							$15,645,253 -
							$15,645,253
							$1,920,068

Note: Inter-segment revenues were eliminated when consolidated.

• 197 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Information on assets and liabilities of the Group’s operating segments as of 31 December 2019 and 2018:

Segment assets:

31 December 2019 31 December 2018

Green Energy $3,401,270 $2,596,862	Industrial Application $8,485,345 $2,999,731	Medical Health $2,772,381 $1,069,138	Automotive $2,651,618 $1,142,743	Communication $8,239,615 $3,573,846	Reconciliation and Eliminated (Note) $(8,365,262) $2,819,216	Total
						$17,184,967
						$14,201,536

Segment liabilities:

31 December 2019 31 December 2018

Green Energy $1,748,314 $1,299,369	Industrial Application $3,428,509 $2054,470	Medical Health $1,120,182 $732,236	Automotive $1,071,388 $782,647	Communication $3,329,221 $2,447,672	Reconciliation and Eliminated (Note) $(1,309,860) $88,510	Total
						$9,387,754
						$7,404,904

(a) Geographical information

i. Revenue from external customers:

Revenue from external customers:
Mainland China (Hong Kong) United States Taiwan Other countries Total	For theyears ended 31 December
	2019	2018
	$10,105,185 3,344,293 1,028,200 3,408,492	$9,269,754 2,414,415 780,945 3,180,139
	$17,886,170	$15,645,253

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

• 198 -

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:

Non-current assets:
Mainland China Taiwan United States Other Total	As of 31 December
	2019	2018
	$1,859,210 1,629,786 60,804 66,285	$1,314,091 1,229,336 35,943 260,618
	$3,616,085	$2,839,988

• (b) 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 31 December 2019 and 2018.

• 199 -

Attachment 1: Financing provided to others for the year ended 31 December 2019

No.	Lender (Note 1)	Counterparty	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
0	The Company	ET Hungary	Other receivables	Y	$68,000	$67,498	$13,500	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$3,006,963	$3,006,963
1	BJSB	BJSB Tongan	Other receivables	Y	$46,046	$43,217	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$90,856	$90,856

Note 1: The above transations were all made between consolidated entities in the Group and have been reversed.

Note 2: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial which were audited by independent accountants as of 31 December 2019.

The Company: $7,517,407*40%=$3,006,963

BJSB: $227,141*40%=$90,856

Note 3: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial report which were audited by independent accountants as of 31 December 2019. The Company: $7,517,407*40%=$3,006,963

BJSB: $227,141*40%=$90,856

Note 4: For short-term financing.

-200-

Attachment 2: Endorsement/Guarantee provided to others as of 31 December 2019

(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/ endorsemen t	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	SHSB	2	$3,006,963	$47,418	$45,159	$ -	none	0.60%	$7,517,407	Y	N	Y
0	The Company	SZSB	2	$3,006,963	$15,806	$15,053	$ -	none	0.20%	$7,517,407	Y	N	Y
0	The Company	TCSB	2	$3,006,963	$299,506	$286,007	$ -	none	3.80%	$7,517,407	Y	N	Y
0	The Company	JSEM	2	$3,006,963	$395,150	$376,325	$ -	none	5.01%	$7,517,407	Y	N	Y
0	The Company	JYSB	2	$3,006,963	$379,344	$361,272	$-	none	4.81%	$7,517,407	Y	N	Y
0	The Company	BJSB Tongan	2	$3,006,963	$646,674	$615,231	$ -	none	8.18%	$7,517,407	Y	N	Y
0	The Company	T-CONN	2	$3,006,963	$179,030	$75,265	$ -	none	1.00%	$7,517,407	Y	N	N
0	The Company	ET Hungary	2	$3,006,963	$327,179	$315,631	$241,304	none	4.20%	$7,517,407	Y	N	N
0	The Company	C&C	2	$3,006,963	$282,690	$270,954	$120,424	none	3.60%	$7,517,407	Y	N	N
0	The Company	T-CONN Zhongshan	2	$3,006,963	$426,762	$316,113	$40,041	none	4.21%	$7,517,407	Y	N	Y
0	The Company	Radbon	2	$3,006,963	$150,000	$150,000	$125,000	none	2.00%	$7,517,407	Y	N	N
1	T-CONN	T-CONN Zhongshan	2	$3,006,963	$94,230	$90,318	$ -	none	1.20%	$7,517,407	N	N	Y

Note 1: The Company and its subsidiaries are coded as follows:

1. The Company is coded "0".

2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

3. 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: 1. A company with which it does business.

4. A company in which the public company directly and indirectly holds more than 50% of the voting shares.

5. A company that directly and indirectly holds more than 50% of the voting shares in the public company.

6. A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

7. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

8. A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.

9. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

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 2019. $7,517,407*40%=$3,006,963

• 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 2019.

• 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.

-201-

Attachment 3: Securities held as of 31 December 2019. (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type and name of securities	Relationship (Note 1)	Financial statement account	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	Note
				Shares	Carrying amount		Percentage of ownership (%)	Fair value
The Company	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	15,000,000 shares		$113,200	11.11%	$113,200	-
The Company	Top Taiwan Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	6,000,000 shares		51,579	7.50%	51,579	-
Kwan-Ze	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	5,000,000 shares		37,699	3.70%	37,699	-
The Company	Dynahz Technologies	-	Financial assets measured at fair value through other comprehensive income- noncurrent	2,771,670 shares		40,696	16.67%	40,696	-
The Company	Top Taiwan VII Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,438,776 shares		15,083	3.06%	15,083	-
The Company	Gongwin Biopharm Holdings Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	235,000 shares		18,797	0.25%	18,797	-
The Company	Japan SINBON Electronics Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	75 shares		1,031	15.00%	1,031	-
Kwan-Ze	Actmax Technologies Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	-		4,692	19.00%	4,692	-
The Company	Top Taiwan III Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	569,105 shares		779	4.07%	779	-
SINBON USA L.L.C	HOTWIRE Development LLC	-	Financial assets measured at fair value through other comprehensive income- noncurrent	697,500 shares		1,261	5.00%	1,261	-
The Company	Top Taiwan II Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	295,000 shares		476	5.00%	476	-
The Company	Bandrich, Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	330,000 shares		463	1.62%	463	-
The Company	Nextronics Engineering Corp.	-	Financial asset measured at fair value through profit or loss–current	2,950,000 shares		95,433	9.94%	95,433	-
The Company	Cayman Lan-Cheng Fund	-	Financial asset measured at fair value through profit or loss–current	30,000 shares		68,646	17.14%	68,646	-
Kwan-Ze	Hotai Finance Co., Ltd.	-	Financial asset measured at fair value through profit or loss–current	100,000 shares		8,890	0.02%	8,890	-
Kwan-Ze	UPAMC Global AIoT Fund	-	Financial asset measured at fair value through profit or loss–current	300,000 shares		3,108	-	3,108	-
The Company	Trutankless, Inc.	-	Financial asset measured at fair value through profit or loss–current	162,400 shares		1,711	-	1,711	-
			Total			$463,544

Note 1: Not required if the issuer of securities is not a related party.

-202-

Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019.

Related-party	Counter-party	Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Details of non-arm's length transaction	Details of non-arm's length transaction	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	JYSB	Subsidiary	Purchase	$1,537,302	41.36%	Trading condition is as same as other supplier	N/A	N/A	$(285,073)	(30.44)%
JYSB	The Company	Subsidiary	Purchase	$144,921	3.31%	Trading condition is as same as other supplier	N/A	N/A	$(37,576)	(2.63)%
HKSB	JYSB	Associates	Purchase	$1,613,611	50.20%	Trading condition is as same as other supplier	N/A	N/A	$(257,657)	(36.10)%
JYSB	HKSB	Associates	Purchase	$120,123	2.74%	Trading condition is as same as other supplier	N/A	N/A	$(46,552)	(3.26)%
JSEM	JYSB	Associates	Purchase	$180,027	22.37%	Trading condition is as same as other supplier	N/A	N/A	$(196,893)	(45.66)%
T-CONN	T-CONN Zhongshan	Associates	Purchase	$366,279	34.20%	Trading condition is as same as other supplier	N/A	N/A	$(45,123)	(24.02)%
SZSB	HKSB	Associates	Purchase	$371,604	92.16%	Trading condition is as same as other supplier	N/A	N/A	$(112,104)	(99.52)%
JYSB	SINBON USA	Associates	Purchase	$180,874	4.13%	Trading condition is as same as other supplier	N/A	N/A	$(12,694)	(0.89)%
BJSB Tongan	JSEM	Associates	Purchase	$164,972	8.45%	Trading condition is as same as other supplier	N/A	N/A	$(5,900)	(1.41)%

Attachment 5: Receivables from related parties with accounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019.

Related-party	Counter-party	Relationship	Amount	Average collection turnover	Overdue account receivable-related parties	Overdue account receivable-related parties	Collection in subsequent period	Allowance for doubtful debts
					Amount	Processingmethod
JYSB	The Company	The Company	$285,073	5.37	$ -	-	$285,073	$ -
JYSB	HKSB	Associates	$257,657	7.32	$ -	-	$256,445	$ -
JYSB	JSEM	Associates	$196,893	1.37	$ -	-	$130	$ -
HKSB	SZSB	Associates	$112,104	4.82	$ -	-	$67,144	$ -

-203-

Attachment 6: 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	JYSB	1	Purchase	$1,537,302	(Note 4)	11.56%
1	JYSB	The Company	2	Sales	$1,537,302	(Note 4)	11.56%
1	JYSB	HKSB	3	Sales	$1,613,611	(Note 4)	12.14%
2	HKSB	JYSB	3	Purchase	$1,613,611	(Note 4)	12.14%
2	HKSB	SZSB	3	Sales	$371,604	(Note 4)	2.79%
5	SZSB	HKSB	3	Purchase	$371,604	(Note 4)	2.79%
3	T-CONN	T-CONN Zhongshan	3	Purchase	$366,279	(Note 4)	2.75%
4	T-CONN Zhongshan	T-CONN	3	Sales	$366,279	(Note 4)	2.75%
1	JYSB	SINBON USA	3	Purchase	$180,874	(Note 4)	1.36%
7	SINBON USA	JYSB	3	Sales	$180,874	(Note 4)	1.36%
6	JSEM	JYSB	3	Purchase	$180,027	(Note 4)	1.35%
1	JYSB	JSEM	3	Sales	$180,027	(Note 4)	1.35%
1	JYSB	The Company	2	Purchase	$144,921	(Note 4)	1.09%
0	The Company	JYSB	1	Sales	$144,921	(Note 4)	1.09%
8	BJSB Tongan	JSEM	3	Purchase	$164,972	(Note 4)	1.24%
6	JSEM	BJSB Tongan	3	Sales	$164,972	(Note 4)	1.24%
2	HKSB	JYSB	3	Sales	$120,123	(Note 4)	0.90%
1	JYSB	HKSB	3	Purchase	$120,123	(Note 4)	0.90%

• 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, interim cumulative balances are used as basis.

Note 4 : The sales price to the above related parties was determined through mutual agreement based on the market conditions.

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Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2019: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2019	Investment as of 31 December 2019	Investment as of 31 December 2019	Net income (loss) of investee company	Investment income (loss) recognized	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%	$662,744	$393,627	$393,627	Subsidiary
The Company	Kwan-Ze	New Taipei City, Taiwan	Holding company	$235,600	$235,600	23,560,000 shares	100.00%	$409,311	$81,795	$81,795	Subsidiary
The Company	Top Taiwan IV Venture Capital Co., Ltd	Taipei City, Taiwan	Holding company	$22,400	$22,400	2,240,000 shares	20.00%	$5,548	$(50,322)	$(10,065)	Investee under the equity method
The Company	SB BVI	British Virgin Islands	Holding company	USD45,021,000 $1,461,158	USD45,021,000 $1,461,158	-	100.00%	$3,828,051	$575,888	$575,888	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$30,648	$30,648	2,945,034 shares	3.59%	$61,011	$438,625	$15,733	Investee under the equity method
The Company	S E L	Mauritius	Holding company	- -	USD3,726,000 $120,732	-	-	-	$(25)	$(16)	Subsidiary
The Company	SINBON USA LLC	4265 Gibson Dr., Tipp City , OH 45371, USA	Logistic center.	USD5,159,000 $161,943	USD4,059,000 $128,061	-	100.00%	$84,135	$(8,457)	$(8,457)	Subsidiary
The Company	SINBON Europe GmbH	Pfarrkirchen, Germany	Logistic center.	EUR5,209,000 $185,241	EUR5,209,000 $185,241	-	100.00%	$43,143	$(64,915)	$(64,915)	Subsidiary
The Company	Radbon Avionics Inc.	Miaoli County, Taiwan	Manufacturing and selling signal cables and cabin wiring.	$33,000	$33,000	3,300,000 shares	55.00%	$37,218	$12,166	$6,691	Subsidiary
The Company	T-CONN	New Taipei City, Taiwan	Manufacturing and selling a wide variety of connectors, wires and cables.	$166,066	$116,804	15,577,522 shares	61.18%	$238,664	$65,019	$39,630	Subsidiary
T-CONN	S P L	Mauritius	Logistic center.	$3,039	$3,039	-	100.00%	$14,157	$(9,350)	$ -	Subsidiary
SINBON USA L.L.C	SINBON Circuits & Cables LLC	815 South Brown School Road Vandalia, OH 45377, USA	Selling a wide variety of connectors and cables.	USD 2,704,000	USD 1,604,000	-	51.00%	USD1,908,000 $57,435	USD(58,000) $(1,792)	$ -	Subsidiary
SINBON USA L.L.C	Worldwide Wire Harnesses Co.,Ltd.	Samoa	Logistic center.	USD 75,000	USD 75,000	-	50.00%	USD25,000 $760	USD(67,000) $(2,059)	$ -	Subsidiary
Kwan-Ze	Argocy Research Inc.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$147,175	$147,175	14,624,200 shares	17.81%	$307,250	$438,625	$ -	Investee under the equity method

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Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2019: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2019	Investment as of 31 December 2019	Investment as of 31 December 2019	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
Worldwide Wire Harnesses Co., Ltd.	STT	U.S.A Tennessee	Logistic center.	USD140,000 $4,542	USD140,000 $4,542	-	100.00%	USD(200,000) ($6,008)	USD(67,000) $(2,059)	$ -	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.	Argosy International B.V.	The Netherlands	Leasing operations and sell ODM and OED	$22,314	$22,314	-	100.00%	$15,766	$180	$ -	Investee under the equity method
Argocy Research Inc.	Ari International (Singapore)Pte.,Ltd. (AIS)	Singapore	Holding company	$32,697	$32,697	-	100.00%	$2,901	$(1,588)	$ -	Investee under the equity method
Argocy Research Inc.	Global Saber Electronics Co., Ltd.	Mauritius	Selling a wide variety of connectors and cables.	$ -	$ -	-	100.00%	$67,676	$11,211	$ -	Investee under the equity method
Argocy Research Inc.	ROTEC LIMITED	British Virgin Islands	Holding company	$268,479	$268,479	8,550 shares	77.38%	$458,066	$65,852	$ -	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%	$133,903	$65,852	$ -	Investee under the equity method
SINBON Europe GmbH	SINBON Holding GmbH	Germany	Holding company	EUR5,184,000 $181,113	EUR5,184,000 $181,113	-	51.00%	EUR1,256,000 $42,373	EUR(3,491,000) $(120,862)	$ -	Subsidiary
SINBON Holding GmbH	ET Hungary	Hungary	Selling,Producting and Processing a wide variety of connectors and cables.	EUR1,080,000 $38,364	EUR1,080,000 $38,364	-	100.00%	EUR(2,406,000) $(81,212)	EUR(3,346,000) $(115,846)	$ -	Subsidiary
SINBON Holding GmbH	ET Germany	Germany	Logistic center.	EUR1,245,000 $44,225	EUR1,245,000 $44,225	-	100.00%	EUR1,172,000 $39,561	EUR(85,000) $(2,956)	$ -	Subsidiary

Note 1: （ 1 ） "Investee company", "Addres", "Main businesses and products", "Initial Investment"and "Investment as of 31 December 2019" shall be filled in the Company's investmet. to the subsidiaries' re-investment in corresponding order, and indicate the relationship in the Notes.

• （ 2 ） "Net income (loss) of investee company" shall be filled in net income (loss) of investee for the year ended 31 December 2019.

• （ 3 ） "Investment income (loss) recognized", shall be filled in only investment income (loss) under the equity method, and the investor shall confirm that its investment income (loss) includes the subsidiaries' re-investment.

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Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Counterparty	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2019	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2019	Accumulated Inward Remittance of Earnings as of 31 December 2019
					Outflow	Inflow
BJSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 4,450,000	Indirectly investment in Mainland China through remittance from a third region.	USD 1,020,000 $30,719	$ -	$ -	USD 1,020,000 $30,719	RMB1,629,000 $7,292	100.00%	RMB1,629,000 $7,292 (Note 1)	RMB52,558,000 $227,141	USD11,030,000 $351,623
JYSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 37,780,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 22,050,000 $705,108	$ -	$ -	USD 22,050,000 $705,108	USD17,940,000 $554,840	100.00%	USD17,940,000 $554,840 (Note 1)	USD97,032,000 $2,921,231	USD25,244,000 $780,847
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	USD98,000 $3,029	100.00%	USD98,000 $3,029 (Note 1)	USD5,429,000 $163,455	USD2,371,000 $72,709
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	USD420,000 $12,987	100.00%	USD420,000 $12,987 (Note 1)	USD9,200,000 $276,977	RMB20,700,000 $93,644
TCSB	Selling a wide variety of connectors, wires and cables.	USD14,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 8,000,000 $248,003	$ -	$ -	USD 8,000,000 $248,003	USD2,095,000 $64,777	100.00%	USD2,095,000 $64,777 (Note 1)	USD18,163,000 $546,819	USD196,000 $5,890
China Digital Library Corp.Ltd.	Technology development of computer software, transfer of technology, advisory service	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)	$ -	$ -
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	$ -	-	$ -	$ -	$ -
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	$ -	-	$ -	$ -	$ -

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Attachment 8: Investment in Mainland China

Investee company	Main Businesses and Products	Counterparty	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2019	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2019	Accumulated Inward Remittance of Earnings as of 31 December 2019
					Outflow	Inflow
JY Sinact	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 5,266,000 $164,599	$ -	$ -	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	$ -	-	$ -	$ -	$ -
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	$ -	-	$ -	$ -	$ -
T-CONN Zhongshan	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 58,300,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 3,086,000 $99,007	USD 600,000 $18,522	$ -	USD 3,686,000 $117,529	$51,570	61.18%	$30,721 (Note 2)	$66,197	$ -
BJSB Tongan	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 130,000,000	Indirectly investment in Mainland China through remittance from a third region.	USD 3,000,000 $89,134	$ -	$ -	USD 3,000,000 $89,134	$511,901	100.00%	$511,901 (Note 1)	$1,652,000	USD13,797,000 $418,425
Accumulated Investment in Mainland China as of 31 December 2019 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment USD 52,087,000 USD 53,420,000 N/A (Note 4)
Accumulated Investment in Mainland China as of 31 December 2019			Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
USD 52,087,000			USD 53,420,000		N/A (Note 4)

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

Note 2: The financial statements were not audited by independent accountants.

Note 3: The financial statements were audited by other independent accountants.

Note 4: According to No. Shen-Zi-09704604680 issued by Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is not limited to 60% of net worth or consolidated net worth specified by the Investment Commission.

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6.5. Parent Company Only Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors’ Report (Not including The Contents of Statements Of Major Accounting Items) :

Independent Auditors’ Report Translated from Chinese

To SINBON Electronics Co., Ltd.

Opinion

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

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Metter – Making Reference to the Audits of Component Auditors section of our report), the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 31 December 2019 and 2018, and its financial performance and cash flows for the years ended 31 December 2019 and 2018, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit of 2019 parent company only financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Order No. Financial- SupervisorySecurities-Auditing- 1090360805 issued by the Financial Supervisory Commission on 25 February 2020, and auditing standards generally accepted in the Republic of China; we conducted our audit of 2018 parent company only financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

• 209 -

1. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

The amount of inventories of the Company and its subsidiaries was significant to the financial statements. As the fluctuation in market demand and the fast-changing technology could cause losses of obsolete and slow-moving inventories, the assessment of the inventory write-downs require significant management judgement. We therefore determined this a key audit mater.

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

2. Impairment of accounts receivable

As of 31 December 2019, gross accounts receivable and loss allowance by the Company amounted to NT$1,056,296 thousand and NT$1,166 thousand, respectively. Net accounts receivable accounted for 9% of total assets, which was considered material in the statements. Since the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, it is necessary to divide account receivables into groups in the process of measurement and analyze the application of related assumptions, including appropriate aging intervals, their respective loss rate, and consideration of the forward-looking information. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit mater.

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

• 210 -

Other Matter– Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain subsidiaries, associates and joint ventures accounted for under the equity methed. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the reports of other auditors. These subsidiaries, associates and joint ventures under equity method amounted to NT$1,332,652 thousand and NT$704,258 thousand, representing 12% and 7% of the total assets as of 31 December 2019 and 2018, respectively. The related shares of profits from the subsidiaries, associates and joint ventures under the equity method amounted to NT$509,650 thousand and NT$106,116 thousand, representing 26% and 6% of the income before tax for the years ended 31 December 2019 and 2018, respectively, and the related shares of other comprehensive income (loss) from the subsidiaries, associates and joint ventures under the equity method amounted to NT$27,268 thousand and NT$(1,727) thousand, representing (21)% and (6)% of the comprehensive income (loss) for the years ended 31 December 2019 and 2018, respectively.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

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

• 211 -

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

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

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

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

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

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

6. 212 -

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

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

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

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

Huang, Tzu Ping

Chen, Ming Hung

Ernst & Young, Taiwan

20 March 2020

Notice to Readers

The accompanying parent company only financial statements are intended only to present the 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 parent company only financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying parent company only financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

• 213 -

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	As of 31 December	As of 31 December
		2019	2018
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss, current Notes receivable, net Accounts receivable, net Accounts receivable-related parties, net Other receivables Inventories Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income,noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Deferred tax assets Other non-current assets Total non-current assets	4,6(1) 4,6(2) 4,6(3) 4,6(3),7 7 4,6(4) 4,6(5) 4,6(6) 4,6(7) 4,6(16) 4,6(20) 4,6(8)	$984,384 165,790 10,225 1,018,539 36,591 113,459 734,705 42,407	$788,605 166,623 12,999 1,076,956 332 130,595 623,774 40,673
		3,106,100	2,840,557
		242,104 7,021,825 526,522 62,346 126,042 136,430	235,449 6,439,454 518,658 - 67,223 24,773
		8,115,269	7,285,557

Total assets

$11,221,369

$10,126,114

(continued)

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English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Current liabilities Short-term loans Financial liabilities at fair value through profit or loss, current Contract liabilities,current Notes payable Accounts payable Accounts payable-related parties Other payables Current tax liabilities Lease liabilities,current Current portion of bonds payable Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities Lease liabilities,noncurrent Net defined benefit obligation, noncurrent Other non-current liabilities-others Total non-current liabilities Total liabilities Equity Capital Common stock Certificates of bond-to-stock conversion Subtotal Additional Paid-in Capital Retained earnings Legal reserve Special reserve Unappropriated earnings Subtotal Other components of equity Exchange differences on translation of foreign operations Unrealized gains or losses measured at fair value through other comprehensive income Subtotal Total equity Total liabilities and equity	Notes	As of 31 December	As of 31 December
		2019	2018
	4,6(9) 4,6(10) 4,6(14) 7 7 4 4,6(16) 4,6(11) 4,6(20) 4,6(16) 4,6(12) 6(13) 6(13) 4	$1,741,166 7,910 144,118 2,013 620,100 304,538 379,318 146,943 18,673 7,141 31,007	$1,490,262 - 89,471 - 588,473 301,028 288,845 93,863 - 404,554 19,906
		3,402,927	3,276,402
		180,858 43,743 76,432 2	188,557 - 88,510 2
		301,035	277,069
		3,703,962	3,553,471
		2,325,237 1,457	2,257,273 9,681
		2,326,694	2,266,954
		1,228,781	904,086
		1,108,150 341,933 2,993,072	966,802 233,441 2,543,293
		4,443,155	3,743,536
		(522,918) 41,695	(333,087) (8,846)
		(481,223)	(341,933)
		7,517,407	6,572,643
		$11,221,369	$10,126,114

(The accompanying notes are an integral part of the parent company only financial statements)

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English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Operating revenues Operating costs Gross profit-net Operating expenses Sales and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Subtotal Operating income Non-operating income and expenses Other income Other gains and losses Finance costs Share of profit or loss of subsidiaries, 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 Unrealized gains on equity instruments measured at fair value through other comprehensive income Unrealized gains on equity instruments measured at fair value through other comprehensive income of associates and joint ventures Income tax related to items that may not be reclassified subsequently Items that may be reclassified subsequently to profit or loss Exchange differences on translation of foreign operations Income tax related to items that may be reclassified subsequently Total other comprehensive income (loss), net of tax Total comprehensive income Earnings per share (NTD) Earnings per share-basic Earnings per share-diluted Items that may not be reclassified subsequently to profit or loss	Notes	For theyears ended 31 December	For theyears ended 31 December
		2019	2018
	4,6(14),7 6(4.18),7 6(18),7 6(15) 6(18) 4,6(6) 4,6(20) 6(19) 4,6(21)	$4,899,284 (3,640,365)	$5,035,927 (3,750,712)
		1,258,919	1,285,215
		(355,630) (398,010) (192,029) -	(298,962) (331,699) (182,695) (696)
		(945,669)	(814,052)
		313,250	471,163
		137,386 14,103 (12,822) 1,541,902	92,851 162,518 (18,116) 937,250
		1,680,569	1,174,503
		1,993,819 (275,308)	1,645,666 (232,189)
		1,718,511	1,413,477
		9,663 15,392 35,149 (1,933) (235,288) 45,457	(1,170) 110,611 (2,107) 1,624 (103,951) 22,757
		(131,560)	27,764
		$1,586,951	$1,441,241
		$7.47	$6.26
		$7.38	$6.10

(The accompanying notes are an integral part of the parent company only financial statements)

-216-

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)

Other changes in additional paid-in capital From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries Net income in 2018 Other comprehensive income (loss), net of tax in 2018 Total comprehensive income (loss) Disposal of financial assets at fair value through other comprehensive income Bonds converted to stock Other changes in additional paid-in capital Disposal of investments accounted for under the equity method From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries Net income in 2019 Other comprehensive income (loss), net of tax in 2019 Total comprehensive income (loss) Bonds converted to stock Special reserve Cash dividends Balance as of 1 January 2018 Balance as of 31 December 2018 Balance as of 1 January 2019 Balance as of 31 December 2019 Impact of retroactive applications Adjusted balance as of 1 Janurary 2018 Appropriation and distribution of 2017 retained earnings Legal reserve Special reserve Cash dividends Appropriation and distribution of 2018 retained earnings Legal reserve	Capital	Capital	Additional Paid-in Capital		Retained earnings	Retained earnings	Ot	her components of equity	her components of equity	Total Equity
	Common stock	Certificates of Bond-to- Stock Conversion		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) on Equity Instruments Measured at Fair Value Through Other Comprehensive Income	Unrealized Gain or Loss on Available- For-Sale Financial Assets
	$2,254,162	$ -	$830,265	$844,155	$181,024	$2,208,472 825	$(251,893)	$ - (120,557)	$18,452 (18,452)	$6,084,637 (138,184)
	2,254,162	-	830,265 (87)	844,155 122,647	181,024 52,417	2,209,297 (122,647) (52,417) (901,664) 1,413,477 454	(251,893) (81,194)	(120,557) 108,504	-	5,946,453 - - (901,664) (87) 1,413,477 27,764
	-	-	-	-	-	1,413,931	(81,194)	108,504	-	1,441,241
	3,111	9,681	73,908			(3,207)		3,207		- 86,700
	$2,257,273	$9,681	$904,086	$966,802	$233,441	$2,543,293	$(333,087)	$(8,846)	$-	$6,572,643
	$2,257,273	$9,681	$904,086 (16,444) 1,742	$966,802 141,348	$233,441 108,492	$2,543,293 (141,348) (108,492) (1,026,622) 1,718,511 7,730	$(333,087) (189,831)	$(8,846) 50,541	$ -	$6,572,643 - - (1,026,622) - (16,444) 1,742 1,718,511 (131,560)
	-	-	-	-	-	1,726,241	(189,831)	50,541	-	1,586,951
	67,964	(8,224)	339,397							399,137
	$2,325,237	$1,457	$1,228,781	$1,108,150	$341,933	$2,993,072	$(522,918)	$41,695	$-	$7,517,407

(The accompanying notes are an integral part of the parent company only financial statements)

-217-

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended 31 December 2019 and 2018 (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 income Dividend income Expected credit loss Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Gain on disposal of investments Loss (Gain) of financial assets/liabilities at fair value through loss or profit Changes in operating assets and liabilities: Decrease (Increase) in notes receivable Decrease (Increase) in accounts receivable Decrease (increase) in other receivables Increase in inventories, net (Increase) Decrease in other current assets Increase in other noncurrent assets Increase (Decrease) in notes payable Increase (Decrease) in accounts payable Increase in other payables Increase in contract liability Increase (Decrease) in other current liabilities Decrease in accrued pension liabilities Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash generated from operating activities	For theyears end	ed 31 December
	2019 $1,993,819 50,679 2,852 12,822 (4,038) (28,333) - (1,541,902) (88) (4,847) 8,698 2,774 22,158 17,135 (110,931) (1,734) (137,592) 2,013 35,137 90,724 54,647 11,101 (2,415) 472,679 4,039 28,333 (11,063) (245,222) 248,766	2018
		$1,645,666 21,193 3,748 18,116 (3,299) (16,607) 696 (937,250) - - (83,585) (4,495) (21,091) (43,012) (60,497) 18,647 (114,133) (881) (55,970) 43,216 89,471 (145,093) (1,956)
		352,884
		3,245 16,607 (10,420) (181,050)
		181,266

(Continued)

-218-

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued) For the years ended 31 December 2019 and 2018 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in investments accounted for under the equity method Acquisition of investments accounted for under the equity method Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive inco Decrease in financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Dividends received from investee company Dividends received from subsidiaries Net cash provided by investing activities Cash flows from financing activities: Cash payments for the principal portion of lease liability Increase (Decrease) in short-term loans Cash dividends Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For theyears end	ed 31 December
	2019 $(19,215) 88 8,400 (83,144) - m - 6,337 - 8,835 817,970 739,271 (16,436) 250,904 (1,026,622) (792,154) (104) 195,779 788,605 $984,384	2018
		$(21,615) - 35,004 (243,693) (646) 189,004 7,199 (71,096) 8,310 324,143
		226,610
		- (22,610) (901,664)
		(924,274)
		167 (516,231) 1,304,836
		$788,605

(The accompanying notes are an integral part of the parent company only financial statements)

-219-

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS

For the Years Ended 31 December 2019 and 2018

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

1. History and organization

SINBON Electronics Co., Ltd. (the “Company”) was incorporated in Republic of China (R.O.C) in December 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 parent company only financial statements of the Company were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on 20 March 2020.

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 Company 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 2019. The nature and the impact of each new standard and amendment that has a material effect on the Company is described below:

(1) IFRS 16“ Leases

IFRS 16 “Leases” replaces IAS 17 “Leases”, IFRIC 4 “Determining whether an Arrangement contains a Lease”, SIC-15 “Operating Leases - Incentives” and SIC-27 “Evaluating the Substance of Transactions Involving the Legal Form of a Lease”.

• 220 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The Company followed the transition provision in IFRS 16 and the date of initial application was 1 January 2019. The impacts arising from the adoption of IFRS 16 are summarized as follows:

• A. Please refer to Note 4 for the accounting policies before or after 1 January 2019.

• B. For the definition of a lease, the Company elected not to reassess whether a contract was, or contained, a lease on 1 January 2019. The Company was permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4. That is, for contracts entered into (or changed) on or after 1 January 2019, the Company need to assess whether contacts are, or contain, leases applying IFRS 16. In comparing to IAS 17, IFRS 16 provides that a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company assessed most of the contracts are, or contain, leases and no significant impact arose.

• C. The Company is a lessee and elects not to restate comparative information in accordance with the transition provision in IFRS 16. Instead, the Company recognized the cumulative effect of initially applying IFRS 16 as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the date of initial application.

(a)Leases previously classified as operating leases

For leases that were previously classified as operating leases applying IAS 17, the Company measured and recognized those leases as lease liability on 1 January 2019 at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate on 1 January 2019, and; the Company chose, on a lease-by-lease basis, to measure the right-of-use asset at either:

• 221 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• i. its carrying amount as if IFRS 16 had been applied since the commencement date, but discounted using the lessee’s incremental borrowing rate on 1 January 2019; or

• ii. an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet immediately before 1 January 2019.

The Company increased the right-of-use asset by NT$22,354 thousand and the lease liability by NT$22,354 thousand on 1 January 2019.

In accordance with the transition provision in IFRS 16, the Company used the following practical expedients on a lease-by-lease basis to leases previously classified as operating leases:

  - i. Apply a single discount rate to a portfolio of leases with reasonably similar characteristics.

  - ii. Rely on its assessment of whether leases are onerous immediately before 1 January 2019 as an alternative to performing an impairment review.

  - iii. Elect to account in the same way as short-term leases to leases for which the lease term ends within 12 months of 1 January 2019.

  - iv. Exclude initial direct costs from the measurement of the right-of-use asset on 1 January 2019.

  - v. Use hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease.

• (b)Leases previously classified as finance leases

• None.

• (c) Please refer to Note 4, Note 5 and Note 6 for additional disclosure of lessee and lessor which required by IFRS 16.

• 222 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (d)At the date 1 January 2019, the impacts arising from the initial adoption of IFRS 16 on the Company are summarized as follows:

  • i. The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized in the balance sheet on 1 January 2019 was 0.70%.

  • ii. There is no difference between: 1) operating lease commitments disclosed applying IAS 17 as at 31 December 2018, discounted using the incremental borrowing rate on 1 January 2019; and 2) lease liabilities recognized in the balance sheet as at 1 January 2019.

• (2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, but not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	Definition of a Business(Amendments to IFRS 3)	1 January2020
b	Definition of Material(Amendments to IAS 1 and 8)	1 January2020
c	Interest Rate Benchmark Reform - Amendments to IFRS 9,IAS 39 and IFRS 7	1 January 2020

(a) Definition of a Business (Amendments to IFRS 3)

The amendments clarify the definition of a business in IFRS 3 Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

IFRS 3 continues to adopt a market participant’s perspective to determine whether an acquired set of activities and assets is a business. The amendments clarify the minimum requirements for a business; add guidance to help entities assess whether an acquired process is substantive; and narrow the definitions of a business and of outputs; etc.

• 223 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(b) Definition of a Material - Amendments to IAS 1 and 8

The main amendment is to clarify new definition of material. It states that “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments clarify that materiality will depend on the nature or magnitude of information. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users.

• (c) Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39 and IFRS 7

The amendments include a number of exceptions, which apply to all hedging relationships that are directly affected by interest rate benchmark reform. A hedging relationship is directly affected if the interest rate benchmark reform gives rise to uncertainties about the timing and or amount of benchmark-based cash flows of the hedged item or the hedging instrument. Hence, the entity shall apply the exceptions to all hedging relationships directly affected by the interest rate benchmark reform.

The amendments include:

(1) highly probable requirement

When determining whether a forecast transaction is highly probable, an entity shall assume that the interest rate benchmark on which the hedged cash flows are based is not altered as a result of the interest rate benchmark reform.

(2) prospective assessments

When performing prospective assessments, an entity shall assume that the interest rate benchmark on which the hedged item, hedged risk and/or hedging instrument are based is not altered as a result of the interest rate benchmark reform.

• 224 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (3) IAS 39 retrospective assessment

An entity is not required to undertake the IAS 39 retrospective assessment (i.e. the actual results of the hedge are within a range of 80–125%) for hedging relationships directly affected by the interest rate benchmark reform.

• (4) separately identifiable risk components

For hedges of a non-contractually specified benchmark component of interest rate risk, an entity shall apply the separately identifiable requirement only at the inception of such hedging relationships.

The amendments also include the end of application of the exceptions requirements and the related disclosures requirements of the amendments.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2020. The standards and interpretations have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are not endorsed by FSC, but not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	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	To be determined by IASB
b	IFRS 17 “Insurance Contracts”	1 January2021
c	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	1 January 2022

(a) 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

• 225 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

(b) IFRS 17 Insurance Contracts

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The fulfilment cash flows comprise of the following:

(1) estimates of future cash flows;

• (2) Discount rate: an adjustment to reflect the time value of money and the financial risks related to the future cash flows, to the extent that the financial risks are not included in the estimates of the future cash flows; and

• (3) a risk adjustment for non-financial risk.

The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

• 226 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

• (c) Classification of Liabilities as Current or Non-current – Amendments to IAS 1

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Company is evaluating the impact of the standards and interpretations have no material impact on the Company.

4. Summary of significant accounting policies

(1) Statement of Compliance

The parent company only financial statements of the Company for the years ended 31 December 2019 and 2018 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”).

• (2) Basis of Preparation

The Company prepared the parent company only financial statements in accordance with the Regulations. According to the Article 21 of the Regulation, which provided that the profit or loss and other comprehensive income for the period presented in the parent company only financial statements shall be the same as the profit or loss and other comprehensive income attributable to stockholders of the parent presented in the consolidated financial statements for the period, and the total equity presented in the parent company only financial statements shall be the same as the equity attributable to the parent company presented in the consolidated financial statements. Therefore, the Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

• 227 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

(3) Foreign Currency Transactions

The Company’s parent company only financial statements are presented in its functional currency, New Taiwan Dollars (NT$). Items included in the financial statements are measured using that functional currency.

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

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

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

• (b) Foreign currency items within the scope of IFRS 9 Financial Instruments 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.

• 228 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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.

• (4) 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 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.

• 229 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (5) Current and non-current distinction

An asset is classified as current when:

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

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

• (c) The Company 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 Company expects to settle the liability in its normal operating cycle

• (b) The Company 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 Company 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.

(6) Cash Equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

• 230 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(7) Financial Instruments

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

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments 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.

• (1) Financial instruments: Recognition and Measurement

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

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

• A. the Company’s business model for managing the financial assets

• B. the contractual cash flow characteristics of the financial asset

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

• A. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

• B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• 231 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

• A. purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition

• B. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

• A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

• B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

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NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

• (a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

• (b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

• (c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

• i. Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

• ii. Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

In addition, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(2) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the statement of financial position.

The Company measures expected credit losses of a financial instrument in a way that reflects:

• (a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes

• (b) the time value of money (c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions

The loss allowance is measured as follows:

• A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.

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NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• B.At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.

• C.For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

• D. For lease receivables arising from transactions within the scope of IFRS 16 (before 1 January 2019: IAS 17), the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

(3) Derecognition of financial assets

A financial asset is derecognized when:

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

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

• iii. The Company 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.

• (4) Financial liabilities and equity

Classification between liabilities or equity

The Company 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.

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NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

SINBON ELECTRONICS CO., LTD.

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 Company evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Company 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 IFRS 9 Financial Instruments.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

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

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments 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 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

• 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:

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• 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 Company is provided internally on that basis to the key management personnel.

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

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.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(5) 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.

(8) Derivative financial instruments

The Company uses derivative financial instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as assets or liabilities at fair value through profit or loss 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.

When the host contracts are either non-financial assets or liabilities, 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 designated at fair value though profit or loss.

• (9) 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

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

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.

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 Company 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.

(10) 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 under weighted average cost method 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.

Starting from 1 January 2019, rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(11) Investments accounted for under the equity method

According to Article 21 of the Regulation, the Company’s investment in subsidiaries was presented as “Investments accounted for using equity method” and made necessary adjustments. The profit or loss during the period and other comprehensive income presented in the parent company only financial statements shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis, and the shareholders’ equity presented in the parent company only financial statements shall be the same as the equity attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis. The adjustment was considered the difference between investment in subsidiaries in consolidated financial statements according to IFRS 10 “Consolidated financial statements” and application of IFRS to different reporting entities, debit/credit “Investment accounted for using equity method”, “Share of profit or loss of subsidiaries, associates and joint ventures” or “Share of other comprehensive profit or loss of subsidiaries, associates and joint ventures” etc.

The Company’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 Company has significant influence. Joint venture means the Company has rights to the net assets of the joint agreement (with joint controller).

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 Company’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 Company 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 Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY 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 Company’s percentage of ownership interests in the associate or joint venture, the Company 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 Company’s interest in an associate or a joint venture is reduced or increased as the Company 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 Company disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company 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 28 Investments in Associates and Joint Ventures (before 1 January 2019: IAS 39 Financial Instruments: Recognition and Measurement ). If this is the case the Company 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 Company estimates:

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (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.

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 Company 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.

(12) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company 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.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 3～15 years 5～10 years 3～10 years 2～15 years Lower of leasehold years or useful lives

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

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

(13) Leases

The accounting policy from 1 January 2019 is as follows:

For contracts entered on or after 1 January 2019, the Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, has both of the following:

• (a) the right to obtain substantially all of the economic benefits from use of the identified asset; and

• (b) the right to direct the use of the identified asset.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The Company elected not to reassess whether a contract is, or contains, a lease on 1 January 2019. The Company is permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximizing the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

• (a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;

• (b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (c) amounts expected to be payable by the lessee under residual value guarantees;

• (d) the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and

• (e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

• (a) the amount of the initial measurement of the lease liability;

• (b) any lease payments made at or before the commencement date, less any lease incentives received;

• (c) any initial direct costs incurred by the lessee; and

• (d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of low-value assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The accounting policy before 1 January 2019 is as follows:

Company as a lessee

Finance leases which transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in profit or loss.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

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

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

(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.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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.

A summary of the policies applied to the Company’s intangible assets is as follows:

follows:
Useful lives Amortization method used Internally generated or acquired	Computer software
	1~15 years Amortized on a straight- line basis over the estimated useful life Acquired

(15) Impairment of non-financial assets

The Company 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 Company 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.

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SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 Company 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.

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 Company 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 Company 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.

• 250 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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.

Provision for warranties

A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgement and other known factors.

(17) Revenue recognition

The Company’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

Sale of goods

The Company manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Company are computer peripherals, connectors, wires and other parts and revenue is recognized based on the consideration stated in the contract.

The credit period of the Company’s sale of goods is from 60 to 120 days. For most of the contracts, when the Company transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. For some of the contracts, the Company has transferred the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Company measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses.

• 251 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Rendering of services

The Company provides maintenance services for the sale of construction for solar photovoltaic power generation system. Such services are separately priced or negotiated, and provided based on contract periods.

Most of the contractual considerations of the Company are collected evenly throughout the contract periods. When the Company has performed the services to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Company has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component has arisen.

(18) Borrowing costs

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.

(19) Post-employment benefits

All regular employees of the Company 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. Therefore fund assets are not included in the Company’s consolidated financial statements.

• 252 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

For the defined contribution plan, the Company 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.

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 Company 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.

(20) Income taxes

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 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.

• 253 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY 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:

• i. 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

• ii. 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:

• i. 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.

• ii. 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.

• 254 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY 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 Company 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.

5. Significant accounting judgments, estimates and assumptions

The preparation of the parent company only financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

• 255 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(1)Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flow model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

(2)Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Please refer to Note 6 for more details.

(3)Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company 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.

• 256 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Deferred tax assets are recognized for all carry forward 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.

(4)Accounts receivables–estimation of impairment loss

The Company estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

(5)Inventories

Estimates of net realisable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Demand deposits Time deposits Total	As of 31 December
	2019	2018
	$23 954,109 30,252	$22 696,858 91,725
	$984,384	$788,605

• 257 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

Financial assets mandatorily at fair value through profit or loss: Stocks Funds Cross currency swap Embedded derivative-bond Total	As of 31 December	As of 31 December
	2019	2018
	$97,144 68,646 - -	$80,034 76,634 9,873 82
	$165,790	$166,623

Financial assets at fair value through profit or loss were not pledged.

• (3) Accounts receivables and accounts receivable - related parties

Accounts receivables Less: loss allowance subtotal Accounts receivable – related parties Total	As of 31 December	As of 31 December
	2019	2018
	$1,019,705 (1,166)	$1,078,122 (1,166)
	1,018,539 36,591	1,076,956 332
	$1,055,130	$1,077,288

Accounts receivables were not pledged.

Accounts receivables are generally on 60-120 day terms. The total carrying amount for the years ended 31 December 2019 and 2018 were NT$1,019,705 thousand and NT$1,078,122 thousand, respectively. Please refer to Note 6(15) for more details on loss allowance and Note 12 for details on credit risk management.

• 258 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(4) Inventories

Raw materials Work in progress Finished goods Merchandise Total	As of 31 December 2019 2018 $170,802 $159,485 62,529 19,440 337,888 268,622 163,486 176,227 $734,705 $623,774
	2019 $170,802 62,529 337,888 163,486 $734,705

The inventory cost recognized as expenses for the years ended 31 December 2019 and 2018 were NT$3,640,365 thousand and NT$3,750,712 thousand, respectively. The price reduction (recovery) of inventories related to cost of goods sold were NT$9,513 thousand and NT$(1,712) thousand.

Gain from price recovery of inventories was due to the sale of obsolete products and the net realized value recovery for the year ended 31 December 2018.

Inventories were not pledged.

• (5) Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value through other comprehensive income – Non-current Emerging companies stocks Unlisted companies stocks Total	As of 31 December	As of 31 December
	2019	2018
	$18,797 223,307	$15,698 219,751
	$242,104	$235,449

• 259 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The Company disposed of the unlisted stocks of General Research of Electronics Inc. which were reported under equity instrument investments measured at fair value through other comprehensive income on 29 June 2018. Upon derecognition, the fair value of the investments was NT$0 thousand, and the cumulative disposal loss of NT$23,184 thousand was transferred from other components of equity to retained earnings.

The Company disposed of the listed stocks of INPAQ Technology Co., Ltd. which were reported under equity instrument investments measured at fair value through other comprehensive income on 18 April 2018 and 2 May 2018. Upon derecognition, the fair values of the investments were NT$913 thousand and NT$187,300 thousand and the cumulative disposal gain of NT$107 thousand and NT$19,725 thousand was transferred from other components of equity to retained earnings.

On 23 April 2018, the Company invested NT$646 thousand in Gongwin Biopharm Holdings Co., Ltd. In consideration of the Company’s investment strategy, the Company disposed of the emerging stocks of Gongwin Biopharm Holdings Co., Ltd., which were reported under equity instrument investments measured at fair value through other comprehensive income during the period. Upon derecognition, the fair value of the investments was NT$791 thousand, and the cumulative disposal gain of NT$145 thousand was transferred from other components of equity to retained earnings.

The return of paid-in capital for capital reduction from Top Taiwan II Venture Capital Co., Ltd., Top Taiwan III Venture Capital Co., Ltd. and Top Taiwan VII Venture Capital Co., Ltd. for the year ended 31 December 2019 were NT$525 thousand, NT$1,220 thousand and NT$4,592 thousand.

The return of paid-in capital for capital reduction from Top Taiwan II Venture Capital Co., Ltd., Top Taiwan III Venture Capital Co., Ltd. and Top Taiwan VII Venture Capital Co., Ltd. for the year ended 31 December 2018 were NT$775 thousand, NT$1,220 thousand and NT$5,204 thousand.

Financial assets at fair value through other comprehensive income were not pledged.

• 260 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (6) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Company:

Investees Investments in subsidiaries: SINBON International Enterprise Co., Ltd. (SB(BVI)) Beijing SINBON Tongan Electronics Co., Ltd. (BJSB Tongan) Hong Kong SINBON Electronics Co., Ltd. (HKSB) Kwan-Ze Corporation Ltd. (Kwan-Ze) T-CONN Precision Co., Ltd. (T-CONN) SINBON USA L.L.C. (SINBON USA) SINBON Europe GmbH (EuropeSB) Radbon Avionics Inc. (Radbon) Beijing SINBON Electronics Co., Ltd. (BJSB) Super Elite Ltd. (SEL) Subtotal Investments in associates: Argocy Research Inc. Top Taiwan IV Venture Capital Co., Ltd. Subtotal Total	As of 31 December	As of 31 December	As of 31 December
	2019 Amount % $3,828,051 100.00 1,652,000 100.00 662,744 100.00 409,311 100.00 238,664 61.18 84,135 100.00 43,143 100.00 37,218 55.00 - - - - 6,955,266 61,011 3.59 5,548 20.00 66,559 $7,021,825	2018
	Amount $3,828,051 1,652,000 662,744 409,311 238,664 84,135 43,143 37,218 - - 6,955,266 61,011 5,548 66,559 $7,021,825	Amount $3,663,702 1,294,388 477,520 348,679 153,467 61,182 110,496 30,527 226,114 108 6,366,183 49,210 24,061 73,271 $6,439,454	%
			100.00 100.00 100.00 100.00 62.52 100.00 100.00 55.00 100.00 64.48 3.59 20.00

After signing the transfer agreement 5 September 2018, the shareholders’ rights and obligations of BJSB have been transferred to BJSB Tongan. On 2 January 2019, the change of registration was completed and approved by State Administration for Industry and Commerce of the People's Republic of China. BJSB was originally held by the Company. It is now held by BJSB Tongan.

On 10 January 2019, in order to expand its productivity in USA, the Company invested additional NT$33,882 thousand in SINBON USA LLC.

• 261 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Super Elite Ltd. was closed down on 19 June 2019.

On 10 December 2019, T-CONN raised capital. The Company invested additional NT$49,262 thousand; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 62.52% to 61.18%.

The return of paid-in capital for capital reduction from Top Taiwan IV Venture Capital Co., Ltd. for the year ended 31 December 2019 was NT$8,400 thousand.

On 18 January 2018, the Company acquired additional 300 thousand shares of Radbon hence raising its ownership to 100%. On 27 June 2018, Radbon raised cash capital with 3,000 shares; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 100% to 55%.

On 25 April 2018 and 15 October 2018, The Company invested additional NT$59,216 thousand and NT$92,757 thousand in SINBON International Enterprise Co., Ltd., respectively.

On 21 September 2018 and 9 November 2018, T-CONN raised capital. The Company invested additional NT$44,685 thousand and NT$15,609 thousand, respectively; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 64.48% to 62.25%.

On 28 December 2018, the Company invested additional NT$34,648 thousand in SINBON USA LLC due to the transfer of equity structure.

Worldwide Wire Harnesse Co., Ltd. was originally held by the Company. It is now held by SINBON USA due to the transfer of equity structure for the year ended 31 December 2018.

The return of paid-in capital for capital reduction from Top Taiwan IV Venture Capital Co., Ltd., Radbon Avionics Inc. and Super Elite Ltd. for the year ended 31 December 2018 were NT$17,600 thousand, NT$1,775 thousand and NT$15,629 thousand, respectively.

• 262 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (1)For the years ended 31 December 2019 and 2018, the Company recognized share of profit or loss of subsidiaries and associates and exchange differences on translation of foreign operations accounted for using equity method, and the details are as follows:

Investees Investments in subsidiaries: SINBON International Enterprise Co., Ltd. (SB(BVI)) Beijing SINBON Tongan Electronics Co., Ltd. (BJSB Tongan) Hong Kong SINBON Electronics Co., Ltd. (HKSB) Kwan-Ze Corporation Ltd. (Kwan-Ze) Worldwide Wire Harnesses Co., Ltd. (SST) SINBON USA L.L.C. (SINBON USA) Beijing SINBON Electronics Co., Ltd. (BJSB) Super Elite Ltd. (SEL) Radbon Avionics Inc. (Radbon) T-CONN Precision Co., Ltd. (T-CONN) SINBON Europe GmbH (EuropeSB) Subtotal Investments in associates: Top Taiwan IV Venture Capital Co., Ltd. Argocy Research Inc. Subtotal Total	For theyears ended 31 December 2019 2018 Investment income (loss) Exchange differences on translation of Foreign operations Investment income (loss) Exchange differences on translation of Foreign operations $575,888 $(156,582) $465,726 $(84,294) 511,991 (69,496) 378,553 (23,897) 393,627 (8,475) 71,274 14,651 81,795 (4,952) 53,981 (2,168) - - (4,797) 297 (8,457) (1,797) (9,860) (328) - - 4,925 (5,393) (16) (11,505) (5) 483 6,691 - (6,761) - 39,630 (1,932) 24,233 400 (64,915) (2,438) (50,628) (3,433) 1,536,234 (257,177) 926,641 (103,682) (10,065) - 4 - 15,733 (997) 10,605 (437) 5,668 (997) 10,609 (437) $1,541,902 $(258,174) $937,250 $(104,119)	For theyears ended 31 December 2019 2018 Investment income (loss) Exchange differences on translation of Foreign operations Investment income (loss) Exchange differences on translation of Foreign operations $575,888 $(156,582) $465,726 $(84,294) 511,991 (69,496) 378,553 (23,897) 393,627 (8,475) 71,274 14,651 81,795 (4,952) 53,981 (2,168) - - (4,797) 297 (8,457) (1,797) (9,860) (328) - - 4,925 (5,393) (16) (11,505) (5) 483 6,691 - (6,761) - 39,630 (1,932) 24,233 400 (64,915) (2,438) (50,628) (3,433) 1,536,234 (257,177) 926,641 (103,682) (10,065) - 4 - 15,733 (997) 10,605 (437) 5,668 (997) 10,609 (437) $1,541,902 $(258,174) $937,250 $(104,119)
	2019 Investment income (loss) Exchange differences on translation of Foreign operations $575,888 $(156,582) 511,991 (69,496) 393,627 (8,475) 81,795 (4,952) - - (8,457) (1,797) - - (16) (11,505) 6,691 - 39,630 (1,932) (64,915) (2,438) 1,536,234 (257,177) (10,065) - 15,733 (997) 5,668 (997) $1,541,902 $(258,174)
	Investment income (loss) $575,888 511,991 393,627 81,795 - (8,457) - (16) 6,691 39,630 (64,915) 1,536,234 (10,065) 15,733 5,668 $1,541,902	Investment income (loss) $465,726 378,553 71,274 53,981 (4,797) (9,860) 4,925 (5) (6,761) 24,233 (50,628) 926,641 4 10,605 10,609 $937,250

• 263 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2)Investments in subsidiaries

Investing subsidiaries was expressed as “Investments accounted for under the equity method” in the parent company only financial statements, and was made the adjustment which was necessary.

(3)Investments in associates

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. was NT$199,084 thousand and NT$88,204 thousand as of 31 December 2019 and 2018.

The Company’s investments in Argocy Research Inc. and Top Taiwan IV Venture Capital Co., Ltd. are not individually material. The aggregate financial information of the Company’s share of its associates is as follows:

Profit from continuing operations Other comprehensive income (post-tax) Total comprehensive income	For the years ended 31 December	For the years ended 31 December
	2019 $5,668 27,268 $32,936	2018
		$10,609 (2,107)
		$8,502

The associates had no contingent liabilities or capital commitments as of 31 December 2019 and 2018.

Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT$1,332,652 thousand and NT$704,258 thousand as of 31 December 2019 and 2018; the related shares of investment income from the associates and joint ventures amounted to NT$509,650 thousand and NT$106,116 thousand for the years ended 31 December 2019 and 2018, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$27,268 thousand and NT$(1,727) thousand for the years ended 31 December 2019 and 2018, respectively; are based solely on the reports of other independent accountants.

• 264 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(7) Property, plant and equipment

(1) Property, plant and equipment (applicable under IFRS 16 requirements)

Cost:	Land $150,430 - - - $150,430 $ - - - $ - $150,430	Buildings $408,170 4,203 - 10,334 $422,707 $109,961 15,863 - $125,824 $296,883	Machinery and equipment $136,534 8,143 (1,324) 2,298 $145,651 $84,687 10,733 (1,324) $94,096 $51,555	Office equipment $29,633 1,290 (990) 9,072 $39,005 $21,841 3,777 (990) $24,628 $14,377	Transportatio n equipment $1,145 1,099 - - $2,244 $875 301 - $1,176 $1,068	Other equipment $13,332 4,480 - 1,379 $19,191 $4,313 3,117 - $7,430 $11,761	Leasehold improvements $7,159 - - - $7,159 $6,068 643 - $6,711 $448	Total
								$746,403 19,215 (2,314) 23,083
As of 1 January 2019 Additions Disposals Other changes As of 31 December 2019 Depreciation and impairment:
								$786,387
								$227,745 34,434 (2,314)
As of 1 January 2019 Depreciation Disposals As of 31 December 2019 Net carrying amount as at:
								$259,865
								$526,522
31 December 2019

Note:The Company adopted IFRS 16 since 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• 265 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(2) Property, plant and equipment (prior to the application of IFRS 16)

Cost:	Land $150,430 - - - $150,430 $ - - - $ - $150,430	Buildings $212,443 5,685 (4,826) 194,868 $408,170 $105,400 9,387 (4,826) $109,961 $298,209	Machinery and equipment $90,264 8,585 (2,059) 39,744 $136,354 $80,126 6,620 (2,059) $84,687 $51,847	Office equipment $26,092 2,204 (164) 1,501 $29,633 $18,482 3,523 (164) $21,841 $7,792	Transportatio n equipment $1,145 - - - $1,145 $684 191 - $875 $270	Other equipment $3,917 4,617 (87) 4,885 $13,332 $3,396 1,004 (87) $4,313 $9,019	Leasehold improvements $6,635 524 - - $7,159 $5,600 468 - $6,068 $1,091	Total
								$490,926 21,615 (7,136) 240,998
As of 1 January 2018 Additions Disposals Other changes As of 31 December 2018 Depreciation and impairment:
								$746,403
								$213,688 21,193 (7,136)
As of 1 January 2018 Depreciation Disposals As of 31 December 2018 Net carrying amount as at:
								$227,745
								$518,658
31 December 2018

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.

• 266 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(8) Other non-current assets

Other non-current assets
Prepayment for equipment Refundable deposits Long-term prepaid rent Other long-term investment Other assets Total	As of 31 December
	2019 $102,999 26,347 6,330 600 154 $136,430	2018
		$16,683 4,935 2,401 600 154
		$24,773

No other non-current assets were pledged.

(9) Short-term loans

Short-term loans
Unsecured bank loans Interest rates applied	As of 31 December 2019 2018 $1,741,166 $1,490,262 As of 31 December 2019 2018 0.63%~0.72% 0.60%-0.80%
	2019 0.63%~0.72%

The Company’s unused short-term lines of credits amounted to NT$302,332 thousand and NT$373,927 thousand as of 31 December 2019 and 2018, respectively.

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

Held for trading: Derivatives not designated as hedging Instruments Cross currency swaps	As of31 December 2019 2018 $7,910 $ -	As of31 December 2019 2018 $7,910 $ -
		2018
		$ -

• 267 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(11) Bonds payable

Bonds payable
Liability component Principal amount Discounts on bonds payable Subtotal Less: current portion Net Embedded derivative Equity component	As of 31 December
	2019	2018
	$7,200 (59)	$411,600 (7,046)
	7,141 (7,141)	404,554 (404,554)
	$-	$-
	$-	$(82)
	$211	$12,061

Issuance of convertible bonds:

On 8 June 2017, the Company issued the sixth 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: NT$500,000 thousand

Period: 8 June 2017 ~ 8 June 2020

Redemption clauses:

• (1) The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (9 September 2017) and prior to 40 days before the maturity date (29 April 2020), 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.

• (2) The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (9 September 2017) and prior to 40 days before the maturity date (29 April 2020), at the early redemption conversion price if at least 90% in principal amount of the bonds has already been exchanged, redeemed, purchased or cancelled.

• 268 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (3) The Company may redeem the bonds in cash, within 5 trading days after the base date of withdrawing the bonds as stated on the “Withdrawal of Convertible Bonds Notice”, at the par value if the bondholders do not reply to the share affair agency in writing before the base date.

Reversal clauses:

• a. The bondholders have the right to require the Company to redeem all or any portion of the bonds, 30 days prior to 2 year anniversary (June 8, 2019) of the issuance, at the principal amount of the bonds with an interest calculated at the rate of 0.5% per annum.

Terms of Exchange:

• a. Underlying Securities: Common shares of the Company

• b.Exchange Period: The bonds are exchangeable at any time on or after 9 September 2017 and prior to 8 June 2020 into common shares of the Company.

• c. Exchange Price and Adjustment: The exchange price was originally NT$76.6 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture.

In accordance with IFRS 9, said financial instrument is classified as an embedded derivative so the exercise price of the embedded put option is allocated to the liability component and 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. The difference between the equity component and the book value was recognized in profit or loss. The difference between the liability component and the book value was recognized in “Share premium-warrants”. The financial assets of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT$0 thousand and NT$82 thousand as of 31 December 2019 and 2018.

The convertible bonds that have already been converted were NT$492,800 thousand and NT$88,400 thousand as at 31 December 2019 and 2018.

• 269 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(12) Post-employment benefits

Defined contribution plan

The Company adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Pension expenses under the defined contribution plan for the years ended 31 December 2019 and 2018 were NT$21,968 thousand and NT$20,605 thousand, respectively.

Defined benefits plan

The Company 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 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 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 will make up the difference in one appropriation before the end of March the following year.

• 270 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 Company expects to contribute NT$4,560 thousand to its defined benefit plan during the 12 months beginning after 31 December 2019.

The weighted average duration of the defined benefits obligation was 13.5 years as of 31 December 2019.

Pension costs recognized in profit or loss are as follows:

Current service costs Net interest on the net defined benefit liabilities Total	For the years ended 31 December	For the years ended 31 December
	2019	2018
	$1,197 948	$1,340 1,185
	$2,145	$2,525

Reconciliations of liabilities of the defined benefit obligation and plan assets at fair value are as follows:

Defined benefit obligation Plan assets at fair value Net defined benefit liabilities, noncurrent		As of
	31 Dec. 2019	31 Dec. 2018	1 Jan.2018
	$138,518 (62,086)	$144,516 (56,006)	$147,616 (58,320)
	$76,432	$88,510	$89,296

• 271 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Reconciliation of liabilities (assets) of the defined benefit plan are as follows:

As of 1 January 2018 Current service cost Interest expense (income) Subtotal Remeasurements of the defined benefit liabilities /assets: Actuarial gains and losses arising from changes in demographic assumptions Experience adjustments Remeasurements of the defined benefit assets Subtotal Payments of benefit obligation Contributions by employer As of 31 December 2018 Current period service costs Interest expense (income) Subtotal Remeasurements of the defined benefit liabilities /assets: Experience adjustments Remeasurements of the defined benefit assets Subtotal Payments of benefit obligation Contributions by employer As of 31 December 2019		As of
	Defined benefit obligation	Plan assets at fair value	Net defined benefit liabilities
	$147,616 1,340 1,992	$(58,320) - (807)	$89,296 1,340 1,185
	150,948 4,248 (1,300) -	(59,127) - - (1,778)	91,821 4,248 (1,300) (1,778)
	2,948	(1,778)	1,170
	(9,380) -	9,380 (4,481)	- (4,481)
	144,516 1,197 1,589	(56,006) - (641)	88,510 1,197 948
	147,302 (7,651) -	(56,647) - (2,012)	90,655 (7,651) (2,012)
	(7,651)	(2,012)	(9,663)
	(1,133) -	1,133 (4,560)	- (4,560)
	$138,518	$(62,086)	$76,432

• 272 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

benefit plan are shown below:
Discount rate Expected rate of salary increases	As of 31 December
	2019	2018
	1.10% 3.00%	1.10% 3.00%

Sensitivity analysis for significant assumption are 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%	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December
	2019		2018
	Defined benefit obligation increase	Defined benefit obligation decrease	Defined benefit obligation increase	Defined benefit obligation decrease
	$ - 7,408 14,967 -	$6,849 - - 13,082	$ - 9,065 18,380 -	$8,320 - - 15,837

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.

(13)Equity

(a) Common stock

The Company’s authorized capital was NT$4,500,000 thousand as of 31 December 2019 and 2018. The issued capital was NT$2,325,237 thousand and NT$2,257,273 thousand in a total of 232,524 thousand shares and 225,727 thousand shares, respectively. Each share has one voting right and a right to receive dividends.

• 273 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The investors requested to convert the Company’s convertible bonds into common stocks by issuing new common shares from 1 January 2019 to 31 December 2019 amount to NT$59,740 thousand in a total of 5,975 thousand shares and amount to NT$58,283 thousand had been completed the registration process for 5,829 thousand shares as of 31 December 2019. The rest has not yet been completed. Therefore, the accumulated book value of certificates of bond - to - stock conversion is NT$1,457 thousand in a total of 146 thousand shares.

As of 1 January 2019, the accumulated book value of certificates of bond - to - stock conversion that had completed the registration process amounted to NT$9,681 thousand in a total of 968 thousand shares as of 31 March 2019.

(b) Capital surplus

Capital surplus
Additional paid-in capital Treasury share transactions Share of changes in net assets of associates and joint ventures accounted for using the equity method From share of changes in net assets of associates Premium from merger Stok options Total	As of 31 December
	2019 $1,241,283 5,749 (1,690) (17,477) 705 211 $1,228,781	2018
		$890,036 5,749 (1,690) (2,775) 705 12,061
		$904,086

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.

• 274 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (c) Retained earnings and dividend policies

According to the Company’s original 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;

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

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

As the Company is undergoing a growth stage, the policy of dividend distribution should reflect its long-term financial planning. The Board of Directors shall make the distribution proposal annually and present it at the Shareholder’s meeting every year. The distribution of shareholders dividend shall be allocated cash dividends to be distributed may not be less than 10% of total dividends to be distributed.

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.

Pursuant to existing regulation, the Company is required to appropriate addition special reserve in the amount equal to the net debit balance of the other components of shareholders’ equity. However, if any of the debit elements is reversed, the special reverse in the amount equal to the reversal maybe released for earnings distribution or offsetting accumulated deficit.

• 275 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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.

The Company did not reverse any special reserve as a result of using, disposing of or reclassifying related assets in 31 December 2019 and 2018.

Details of the 2019 and 2018 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 20 March 2020 and 6 June 2019, respectively, are as follows:

Common stock -cash dividend Legal reserve Special reserve Total	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2019	2018	2019	2018
	$1,233,721 172,624 139,290	$1,026,622 141,348 108,492	$5.3	$4.5
	$1,545,635	$1,276,462

Please refer to Note 6(16) for further details on employees’ compensation and remuneration to directors and supervisors.

• 276 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(14) Operating revenue

Revenue from contracts with customers Sale of goods Other operating revenue Total	For the years ended 31 December	For the years ended 31 December
	2019 $4,862,963 36,321 $4,899,284	2018
		$4,901,712 134,215
		$5,035,927

Analysis of revenue from contracts with customers for the years ended 31 December 2019 and 2018 are as follows:

(1) Disaggregation of revenue

For the year ended 31 December 2019

	Green	Industrial	Medical
	Energy	Application	Health	Automotive	Communication	Total
Sale of goods	$ -	$1,863,018	$608,696	$582,182	$1,809,067	$4,862,963
Other	-	13,915	4,546	4,348	13,512	36,321
operating
revenues
Total	$ -	$1,876,933	$613,242	$586,530	$1,822,579	$4,899,284
Timing of
revenue
recognition :
At a point	$ -	$1,876,933	$613,242	$586,530	$1,822,579	$4,899,284
in time
Over time	-	-	-	-	-	-
Total	$ -	$1,876,933	$613,242	$586,530	$1,822,579	$4,899,284

• 277 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

For the year ended 31 December 2018

Green Energy Industrial Application Sale of goods $ - $1,673,654 Other operating revenues - 45,827 Total $ - $1,719,481 Timing of revenue recognition : At a point in time $ - $1,719,481 Over time - - Total $ - $1,719,481 (2) Contract balances Contract liabilities - current Sales of goods	Medical Health Automotive $596,509 $637,576 16,333 17,458 $612,842 $655,034 $612,842 $655,034 - - $612,842 $655,034 108.12.31 $144,118	Medical Health Automotive $596,509 $637,576 16,333 17,458 $612,842 $655,034 $612,842 $655,034 - - $612,842 $655,034 108.12.31 $144,118	Medical Health Automotive $596,509 $637,576 16,333 17,458 $612,842 $655,034 $612,842 $655,034 - - $612,842 $655,034 108.12.31 $144,118	Communication $1,993,973 54,597 $2,048,570 $2,048,570 - $2,048,570 107.12.31	Communication $1,993,973 54,597 $2,048,570 $2,048,570 - $2,048,570 107.12.31	Total
						$4,901,712 134,215
						$5,035,927
						$5,035,927 -
						$5,035,927
				107.12.31		107.1.1
		$144,118		$89,471		$133,277

For the year ended 31 December 2019, contract liabilities increased as additional performance obligations are not satisfied.

For the year ended 31 December 2018, contract liabilities decreased as performance obligations are partially satisfied.

(3) Transaction price allocated to unsatisfied performance obligations

None

• (4) Assets recognized from costs to fulfil a contract

None

• 278 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(15) Expected credit losses (gains)

Expected credit losses (gains)
Operation expense- Expected credit (gains) losses Trade receivables	For the years ended 31 December
	2019	2018
	$-	$696

Please refer to Note 12 for more details on credit risk.

The Company measures the loss allowance of its trade receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Company’s loss allowance as at 31 December 2019 and 2018 are as follows:

31 December 2019

Gross carrying amount Loss ratio Lifetime expected credit losses Carrying amount	Not yet due(note) $1,044,736 -% - $1,044,736		Overdue		>=121 days	Total
		<=30 days 31-60 days	61-90 days $1,458 -% - $1,458	91-120 days $193 -% -
		$18,223 $745 -% -%			$1,166 30-100%	$1,066,521
		- -			(1,166)	(1,166)
		$18,223 $745		$193	$ -	$1,065,355

31 December 2018

Gross carrying amount Loss ratio Lifetime expected credit losses Carrying amount	Not yet due(note) $1,062,470 -% - $1,062,470		Overdue		>=121 days	Total
		<=30 days 31-60 days	61-90 days $ - -% - $ -	91-120 days $ - -% -
		$26,653 $1,164 -% -%			$1,166 30-100%	$1,091,453
		- -			(1,166)	(1,166)
		$26,653 $1,164		$ -	$ -	$1,090,287

Note: The Group’s note receivables are not overdue.

• 279 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The movement in the provision for impairment of note receivables and trade receivables during the years ended 31 December 2019 and 2018 are as follows:

as follows:
As of 1 January 2019 Write off Addition/(reversal) for the current period As of 31 December 2019 As of 1 January 2018 (in accordance with IAS 39) As of 1 January 2018 Transition adjustment to retained earnings As of 1 January 2018 (in accordance with IFRS 9) Write off Addition/(reversal) for the current period As of 31 December 2018	Note receivables $ - - - $- $ - - - - - $-	Trade receivables
		$1,166 - -
		$1,166
		$470 -
		$470 - 696
		$1,166

(16) Leases

• (1) The Company is a lessee (Adoption of the related disclosure in IFRS 16)

The Company leases various properties, including real estate such as buildings and transportation equipment. The lease terms range from 1 to 16 years.

The Company’s leases effect on the financial position, financial performance and cash flows are as follow:

• A. Amounts recognized in the balance sheet

• (a) Right-of-use asset

The carrying amount of right-of-use assets

Buildings Transportation equipment Total	As of 31 December	As of 31 December
	2019	2018(Note)
	$45,826 16,520
	$62,346

• 280 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Note: The Company adopted IFRS 16 since 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

During the year ended 31 December 2019, The Company’s additions to right-of-use assets amounting to NT$56,257 thousand.

(b) Lease liabilities

Lease liabilities
Lease liabilities Current Non-Current Total	As of 31 December
	2019	2018(Note)
	$18,673 43,743
	$62,416

Please refer to Note 6(17)(c) for the interest on lease liabilities recognized during the year ended 31 December 2019 and refer to Note 12 (5) Liquidity risk management for the maturity analysis for lease liabilities as at 31 December 2019.

Note: The Company adopted IFRS 16 since 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Buildings Transportation equipment Total	For the years ended 31 December	For the years ended 31 December
	2019	2018(Note)
	$10,361 5,884
	$16,245

Note: The Company adopted IFRS 16 since 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• 281 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

C.Income and costs relating to leasing activities

The expenses relating to short-term leases	For the years ended 31 December	For the years ended 31 December
	2019 $9,302	2018(Note)

• Note: The Company adopted IFRS 16 since 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• D. Cash outflow related to lessee and lease activity

During the year ended 31 December 2019, The Company’s total cash outflows for leases amounting to NT25,738 thousand.

• (2) Operating lease commitments - Company as a lessee (applicable to the disclosure requirement in IAS 17)

The Company has entered into commercial leases on certain property, plant and equipment. These leases have an average life of three to five years with no renewal option included in the contracts. There are no restrictions placed upon The Company by entering into these leases.

Future minimum rentals payable under non-cancellable operating leases as at 31 December 2019 and 31 December 2018 are as follows:

Not later than one year Later than one year and not later than five years Later than five years Total	As of 31 December	As of 31 December
	2019(Note)	2018
		$9,284 35,938 -
		$45,222

• 282 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Operating lease expense recognized as followed:

Minimum lease payments Contingent rents Total	For the years ended 31 December	For the years ended 31 December
	2019(Note)	2018
		$21,134 -
		$21,134

Note: The Company adopted IFRS 16 since 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

(17)Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2019 and 2018:

Function Nature	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December
	2019				2018
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits expense
Salaries	$93,613	$453,884	$547,497	$84,646	$386,666	$471,312
Labor and health insurance	11,646	31,827	43,473	10,564	28,461	39,025
Pension	6,092	18,021	24,113	5,699	17,431	23,130
Remuneration to directors and supervisors	-	17,350	17,350	-	15,300	15,300
Other employee benefits expense	10,776	17,091	27,867	10,051	15,679	25,730
Depreciation	22,721	27,958	50,679	8,950	12,243	21,193
Amortization	185	2,667	2,852	417	3,331	3,748

As of 31 December 2019 and 2018, the number of employees of the Company were 782 and 681; the number of directors who were not concurrently employees were 10 and 8, respectively.

For the years ended 31 December 2019 and 2018, the average of employees benefits expense of the Company were NT$833 thousand and NT$831 thousand, respectively.

• 283 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

For the years ended 31 December 2019 and 2018, the average of employees salaries of the Company were NT$709 thousand and NT$700 thousand, respectively.

The Company’s average salary expense adjustment for the year ended 31 December 2019 increased by 1%.

According to the Articles of Incorporation, 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. 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 31 December 2019, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2019 to be 1.50% and 0.87% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2019 amount to NT$30,000 thousand and NT$17,350 thousand respectively, recognized as employee benefits expense.

A resolution was passed at a Board of Directors meeting held on 20 March 2020 to distribute NT$30,000 thousand and NT$17,350 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2019, respectively. Differences between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December 2019 are recognized in profit or loss of the subsequent year in 2019.

• 284 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2018 amount to NT$24,000 thousand and NT$15,300 thousand 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 2018.

(18) Non-operating income and expenses

(a) Other income

Other income
Dividend income Sample income Interest income Financial assets measured at amortized costs Rent income Others Total	For theyears ended 31 December
	2019 $28,333 19,883 4,038 2,230 82,902 $137,386	2018
		$16,607 24,513 3,299 1,372 47,060
		$92,851

(b) Other gains and losses

Other gains and losses
Foreign exchange gains, net Gains on disposal of investments Gains on disposal of property, plant and equipment (Losses)Gains of financial asset at fair value through profit or loss(Note1) (Losses)Gains of financial liabilities at fair value through profit or loss(Note2) Total	For theyears ended 31 December
	2019 $17,866 4,847 88 (788) (7,910) $14,103	2018
		$78,933 - - 38,858 44,727
		$162,518

Note:

1. Balances were arising from financial assets mandatorily measured at fair value through profit or loss.

2. Balances were arising from held for trading financial liabilities.

3. 285 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(c) Finance costs

Finance costs
Interest on loans from bank Interest on bonds payable Interest on lease liabilities Total	For theyears ended 31 December
	2019 $10,812 1,769 241 $12,822	2018
		$12,471 5,645 (Note)
		$18,116

Note: The Company adopted IFRS 16 since 1 January 2019. The

Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

(19)Components of other comprehensive income

For the year ended 31 December 2019

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains on equity instruments measured at fair value through other comprehensive income Unrealized gains on equity instruments method at fair value through other comprehensive income of associates and joint venture To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations 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
	$9,663 15,392 35,149 (235,288)	$ - - - -	$9,663 15,392 35,149 (235,288)	$(1,933) - - 45,457	$7,730 15,392 35,149 (189,831)
	$(175,084)	$ -	$(175,084)	$43,524	$(131,560)

• 286 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

For the year ended 31 December 2018

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains on equity instruments measured at fair value through other comprehensive income Unrealized gains on equity instruments method at fair value through other comprehensive income of associates and joint venture To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations 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
	$(1,170) 110,611 (2,107) (103,951)	$ - - - -	$(1,170) 110,611 (2,107) (103,951)	$1,624 - - 22,757	$454 110,611 (2,107) (81,194)
	$3,383	$ -	$3,383	$24,381	$27,764

Income tax

Based on the amendments to the Income Tax Act announced on 7 February 2018, the Company’s applicable corporate income tax rate for the year ended 31 December 2018 has changed from 17% to 20%. The corporate income surtax on undistributed retained earnings has changed from 10% to 5%.

• 287 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

Current income tax expense : Current income tax charge Adjustments in respect of current income tax of prior periods Deferred tax expense: Deferred tax expense relating to origination and reversal of temporary differences Deferred tax expense (income) relating to changes in tax rate or the imposition of new taxes Total income tax expense	For the years ended 31 December	For the years ended 31 December
	2019 $298,302 - (22,994) - $275,308	2018
		$193,571 (18,836) 37,448 20,006
		$232,189

Income tax relating to components of other comprehensive income

Deferred tax expense(income): Exchange differences on translation of foreign operations Remeasurements of defined benefit plans Income tax relating to components of other comprehensive income	For the years ended 31 December	For the years ended 31 December
	2019 $(45,457) 1,933 $(43,524)	2018
		$(22,757) (1,624)
		$(24,381)

• 288 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:	uct of accounting profit	uct of accounting profit
For the years ended 31 December 2019 2018 Accounting profit before tax from continuing operations $1,993,819 $1,645,666 At the Company’s statutory income tax rate $398,764 $329,133 Tax effect of revenues exempt from taxation (16,696) (10,952) Tax effect of expenses not deductible for tax purposes 354 1,698 Tax effect of deferred tax assets/liabilities (112,166) (103,335) Corporate income surtax on undistributed retained earnings 5,052 14,475 Tax effect of different tax rates for entities in other tax regions - (18,836) Adjustments in respect of deferred income tax of prior periods - 20,006 Total income tax expense recognized in profit or loss $275,308 $232,189 Deferred tax assets (liabilities) relate to the following: For the year ended 31 December 2019	For the years ended 31 December
	2019	2018
	$1,993,819	$1,645,666
	$398,764 (16,696) 354 (112,166) 5,052 - -	$329,133 (10,952) 1,698 (103,335) 14,475 (18,836) 20,006
	$275,308	$232,189

Temporary differences Exchange differences on translation of foreign operations Unrealized foreign exchange gains or losses Loss from price recovery (reduction) of inventories Revaluations of financial liabilities at fair value through profit or loss Investments accounted for using the equity method Unrealized intragroup profits and losses Remeasurements of defined benefit plans Non-current liability – Defined benefit liability Loss allowance Convertible bonds Deferred tax (income) /expense Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $37,648 (295) 2,999 (8,261) (178,949) 7,901 9,501 8,200 974 (1,052) $(121,334) $67,223 $188,557	Recognized in profit or loss $ - 4,654 1,902 1,732 5,664 9,155 - (121) - 8 $22,994	Recognized in other comprehensive income $45,457 - - - - - (1,933) - - - $43,524	Balance as of 31 December $83,105 4,359 4,901 (6,529) (173,285) 17,056 7,568 8,079 974 (1,044)
				$(54,816)
				$126,042
				$180,858

• 289 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

For the year ended 31 December 2018

Temporary differences Exchange differences on translation of foreign operations Unrealized foreign exchange gains or losses Loss from price recovery (reduction) of inventories Revaluations of financial liabilities at fair value through profit or loss Investments accounted for using the equity method Unrealized intragroup profits and losses Remeasurements of defined benefit plans Non-current liability – Defined benefit liability Loss allowance Convertible bonds Deferred tax (income) /expense Net deferred tax assets (liabilities) Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $14,891 (2,922) 2,840 7,119 (131,216) 5,963 7,877 7,303 709 (825) $(88,261) $46,702 $134,963	Recognized in profit or loss $ - 2,627 159 (15,380) (47,733) 1,938 - 897 265 (227) $(57,454)	Recognized in other comprehensive income $22,757 - - - - - 1,624 - - - $24,381	Balance as of 31 December $37,648 (295) 2,999 (8,261) (178,949) 7,901 9,501 8,200 974 (1,052)
				$(121,334)
				$67,223
				$188,557

Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Company shall recognize the relevant deferred income tax liabilities for the income tax payable that may arise when the undistributed surplus of a foreign subsidiary is remitted back, in accordance with the undistributed surplus expected to be allocated by the future subsidiary.

• 290 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The assessment of income tax returns

As of 31 December 2019, the Company’s income tax returns through 2017 have been assessed and approved by the tax authority.

(20) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

hares.
(a) Basic earnings per share Net income 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	For the years ended 31 December
	2019 $1,718,511 230,104 $7.47 $1,718,511 1,415 $1,719,926	2018
		$1,413,477
		225,685
		$6.26
		$1,413,477 4,516
		$1,417,993

• 291 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee compensation-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 31 December	For the years ended 31 December
	2019 230,104 242 2,659 233,005 $7.38	2018
		225,685 290 6,352
		232,327
		$6.10

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date of completion of the financial statements.

1. Related party transactions

Information of the related parties that had transactions with the Company during the financial reporting period is as follows:

Name and nature of relationship of the related parties

Name of the relatedparties Argosy Research Inc. SINBON Circuits & Cables LLC(Note) SINBON Germany GmbH Hong Kong SINBON Electronics Co., Ltd. Tong Cheng SINBON Electronics Co., Ltd. Jiangyin SINBON Electronics Co., Ltd. SINBON USA LLC Radbon Avionics Inc. T-CONN Precision Co., Ltd. SINBON Hungary Kft. Beijing SINBON Tongan Electronics Co., Ltd. Jiangsu ENMAGIC Energy Co., Ltd. (JSEM)	Nature of relationship
	Associate Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

• 292 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Note: The company newly invested in SINBON Circuits & Cables LLC on January 10, 2019.Increase the shareholding ratio from 40% to 51%, and change its relationship with the company from an affiliated company to a subsidiary Division.

Significant transactions with related parties

(a) Sales

ales
Subsidiaries Associates Total	For the years ended 31 December
	2019 $4,794 36,468 $41,262	2018
		$7,712 -
		$7,712

The sales price to the above related parties was determined through mutual agreement based on the market rates. The outstanding balance as of 31 December 2019 and 2018 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

(b) Purchases

urchases
Subsidiaries Associates Total	For the years ended 31 December
	2019 $1,608,961 - $1,608,961	2018
		$1,651,967 22
		$1,651,989

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 were comparable with third party suppliers.

• 293 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(c) Accounts receivable-related parties

Accounts receivable-related parties
Subsidiaries Associates Total	As of 31 December 2019 2018 $160 $5 36,431 327 $36,591 $332
	2019 $160 36,431 $36,591

(d) Other receivables-related parties

Subsidiaries

As of 31 December	As of 31 December
2019 $75,358	2018
	$66,717

• (e) Accounts payable-related parties

Accounts payable-related parties
Subsidiaries Associates Total	As of 31 December
	2019 $304,538 - $304,538	2018
		$301,005 23
		$301,028

(f) Other payables

Other payables
Subsidiaries Associates Total	As of 31 December
	2019 $7,570 125 $7,695	2018
		$3,737 17
		$3,754

(g) Expenses

Subsidiaries Associates Total

For the years ended 31 December	For the years ended 31 December
2019 $15,547 119 $15,666	2018
	$17,885 699
	$18,584

• 294 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(h) Key management personnel compensation

Short-term employee benefits Post-employment benefits Total	For the years ended 31 December	For the years ended 31 December
	2019 $102,338 24,113 $126,451	2018
		$84,293 23,130
		$107,423

8. Assets pledged as security

None.

9. Significant contingencies and unrecognized contract commitments

The Company provided guarantees for subsidiaries’ financing to banks for the year ended 31 December 2019. Please refer to Note 13.(1)(b).

1. Significant disaster loss

None.

11. Significant subsequent events

None.

1. Others

2. (1)Categories of financial instruments

Financial assets

Financial assets
Financial assets at fair value through profit or loss: Mandatorily measured at Fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost (Note 1) Total	As of 31 December
	2019 $165,790 242,104 2,163,175 $2,571,069	2018
		$166,623 235,449 2,009,465
		$2,411,537

• 295 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Financial liabilities Financial liabilities at amortized cost: Short-term loans Notes and accounts payable Bonds payable (including current portion with maturity less than 1 year) Others payables Lease liabilities Subtotal Financial liabilities at fair value through profit or loss: Held for trading Total	As of 31 December	As of 31 December
	2019 $1,741,166 926,651 7,141 379,318 62,416 3,116,692 7,910 $3,124,602	2018
		$1,490,262 889,501 404,554 288,845 (Note2)
		3,073,162
		-
		$3,073,162

Note:

• 1.Including cash and cash equivalents, notes receivable, trade receivables and other receivables.

• 2.The Company adopted IFRS 16 on 1 January 2019. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 16.

• (2) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Company identifies measures and manages the aforementioned risks based on the Company’s policy and risk appetite.

The Company 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 Company complies with its financial risk management policies at all times.

• 296 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(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 Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense are denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign subsidiaries.

The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Company 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 Company.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Company’s foreign currency risk is mainly related to the volatility in the exchange rates for USD.

• 297 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s loans and receivables at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit.

Pre-tax sensitivity analysis of changes in related risk factors for the years ended 31 December 2019 and 2018 are as follows:

For the year ended 31 December 2019

Main Risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$6,099 +/−$1,749	Sensitivity of equity
			- -

For the year ended 31 December 2018

Main Risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$3,924 +/−$1,480	Sensitivity of equity
			- -

• 298 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Equity price risk

The fair value of the Company’s listed and unlisted equity securities and conversion rights of the Euro-convertible bonds issued are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company’s listed and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value, while conversion rights of the Euro-convertible bonds issued are classified as financial liabilities at fair value through profit or loss as it does not satisfy the definition of an equity component. The Company 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 Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

At the reporting date, a change of 10% in the price measured at fair value through profit or loss could increase/decrease The Company’s profit for the years ended 31 December 2019 and 2018 by NT$9,714 thousand and NT$8,003 thousand, respectively.

At the reporting date, a change of 10% in the price of the listed companies stocks classified as equity instruments investments measured at fair value through other comprehensive income could have an impact of NT$1,880 thousand and NT$1,570 thousand on the equity attributable to The Company for the years ended 31 December 2019 and 2018, respectively.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(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 Company 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.

• 299 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of 31 December 2019 and 2018, amounts receivables from top ten customers represented 31% and 36% of the total accounts receivables of the Company. 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 Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Company’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 borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

• 300 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Non-derivative financial instruments

Less than 1year As of 31 December 2019 Loans $1,743,041 Notes and accounts payable 926,651 Convertible bonds 7,213 Lease liabilities 18,981 As of 31 December 2018 Loans $1,510,063 Notes and accounts payable 889,501 Convertible bonds 408,610 Derivative financial instruments Less than 1year As of31 December2019 Cross currency swaps Net settlement - outflow $(7,910) As of 31 December 2018	Less than 1year	2 to 3years $ - - - 26,902 $ - - - 2 to 3years $ -	4 to 5years	> 5years $ - - - - $ - - - > 5years $ -	Total $1,743,041 926,651 7,213 62,895 $1,510,063 889,501 408,610 Total $(7,910)
			$ - - - 17,012 $ - - - 4 to 5years $ -

None

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

(6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2019:

As of 1 January 2019 Cash flow Non-cash change As of 31 December 2019	Short-term loans $1,490,262 250,904 - $1,741,166	Lease liabilities $22,354 (16,436) 56,498 $62,416	Total liabilities from financingactivities
			$1,490,262 234,468 78,852
			$1,803,582

• 301 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Reconciliation of liabilities for the year ended 31 December 2018:

As of 1 January 2018 Cash flow Non-cash change As of 31 December 2018	Short-term loans $1,512,872 (22,610) - $1,490,262	Total liabilities from financingactivities
		$1,512,872 (22,610) -
		$1,490,262

• (7) 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 Company 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.

• 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).

• 302 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• 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 Company’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.(9) for fair value measurement hierarchy for financial instruments of the Company.

(8) Derivative financial instruments

The Company’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 31 December 2019 and 2018 are as follows:

• 303 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Cross currency swaps

The Company entered into cross currency swaps to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to cross currency swaps:

Items As of 31 December 2019 Cross currency swaps As of 31 December 2018 Cross currency swaps	Amount(in thousands) USD 17,000 USD 28,000	Contract Period
		11 January 2019 – 27 February 2020 2 January 2018 – 13 March 2019

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(11) for further information on this transaction.

The counterparties for the aforementioned derivatives transactions are well known local or overseas banks, as they have sound credit ratings, the credit risk is insignificant.

The 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 Company has sufficient operating funds, the cash flow risk is insignificant.

(9) 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:

• 304 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 Company 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 Company’s assets and liabilities

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

As of 31 December 2019

Financial assets: Financial assets at fair value through profit or loss Fund Stock Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income Financial liabilities: Financial liabilities at fair value through profit or loss Cross currency swaps	Level 1 $68,646 97,144 18,797 Level 1 $ -	Level 2 $ - - - Level 2 $7,910	Level 3 $ - - 223,307 Level 3 $ -	Total
				$68,646 97,144 242,104 Total
				$7,910

• 305 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

As at 31 December 2018 Financial assets: Financial assets at fair value through profit or loss Fund Cross currency swaps Stock Embedded derivatives-bond Financial assets at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income	Level 1 $76,634 - 80,034 - 15,698	Level 2 $ - 9,873 - 82 -	Level 3 $ - - - - 219,751	Total
				$76,634 9,873 80,034 82 235,449

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2019 and 2018, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Beginning balances as of 1 January 2019 Total gains and losses recognized for the year ended 31 December 2019: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) The return of paid-in capital for capital reduction Ending balances as of 31 December 2019	Assets
	At fair value through other comprehensive income
	Stocks
	$219,751 9,893 (6,337)
	$223,307

• 306 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Beginning balances as of 1 January 2018 Total gains and losses recognized for the year ended 31 December 2018: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) Disposal The return of paid-in capital for capital reduction Ending balances as of 31 December 2018	Assets
	At fair value through other comprehensive income
	Stocks
	$191,149 68,454 (32,653) (7,199)
	$219,751

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of 31 December 2019

Relationship Sensitivity of the input to Valuation Significant Quantitative between inputs fair value techniques unobservable inputs information and fair value Financial assets: At fair value through profit or loss Stocks and others Market approach Discount for lack of 30% The higher the 10% increase (decrease) marketability discount for lack in the discount for lack of marketability, of marketability would the lower the fair result in increase value of the (decrease) in the stocks Company’s profit or loss by NT$22,331 thousand

• 307 -

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD.

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

As of 31 December 2018

Financial assets: At fair value through profit or loss Stocks and others	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Asset approach	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Company’s profit or loss by NT$21,975 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company’s Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company’s accounting policies at each reporting date.

As at 31 December 2019 Financial assets not measured at fair value but for which the fair value is disclosed: Investments accounted for using the equity method(please refer to Note 6(6)) As at 31 December 2018 Financial assets not measured at fair value but for which the fair value is disclosed: Investments accounted for using the equity method(please refer to Note 6(6))	Level 1	Level 2	Level 3	Total
	$199,084 Level 1	$ - Level 2	$ - Level 3	$199,084 Total
	$88,204	$ -	$ -	$88,204

• 308 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Financial assets Monetaryitems: JPY USD EUR Financial liabilities Monetaryitems: JPY USD EUR	As of	31 December 2019 Foreign exchange rate NTD 0.28 $68,525 30.11 1,676,678 33.75 133,370 0.28 151 30.11 1,066,765 33.75 22,250	As of	31 December 2018	31 December 2018
	Foreign currencies $247,280 55,692 3,952 545 35,434 659	Foreign exchange rate 0.28 30.11 33.75 0.28 30.11 33.75	Foreign currencies $78,893 50,847 3,021 1,306 38,080 534	Foreign exchange rate 0.28 30.73 35.20 0.28 30.73 35.20	NTD
					$21,964 1,562,677 106,351 364 1,170,325 18,797

The Company has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Company recognized NT$17,866 thousand and NT$78,933 thousand foreign exchange gains for the years ended 31 December 2019 and 2018, respectively.

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

(11) Capital management

The primary objective of the Company’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 Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payments to shareholders, return capital to shareholders or issue new shares.

• 309 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

13. Other disclosure

• (1) Information at significant transactions and information on investees:

• (a) Financing provided to others for the year ended 31 December 2019: Please refer to Attachment 1.

• (b) Endorsement/Guarantee provided to others for the year ended 31 December 2019: Please refer to Attachment 2.

• (c) Securities held as of 31 December 2019: 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 31 December 2019: 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 31 December 2019: 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 31 December 2019: None.

• (g) Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended 31 December 2019: 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 31 December 2019: Please refer to Attachment 5.

• (i) Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2019: Please refer to Attachment 7.

• 310 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

• (j) Financial instruments and derivative transactions: Please refer to Note 12. (8).

• (k) The business relationship, significant transactions and amounts between parent company and subsidiaries: Please refer to Attachment 6.

• (2) Information on investments in mainland China

• (a) Investment in Mainland China: Please refer to Attachment 8.

• (b) Significant transactions through third regions with the investees in Mainland China: Please refer to Attachment 2,4,5 and 6.

14. Segment information

The Company fully disclosed segment information in consolidated financial statements.

• 311 -

Attachment 1: Financing provided to others for the year ended 31 December 2019

No.	Lender (Note 1)	Counterparty	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
0	The Company	ET Hungary	Other receivables	Y	$68,000	$67,498	$13,500	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$3,006,963	$3,006,963
1	BJSB	BJSB Tongan	Other receivables	Y	$46,046	$43,217	$ -	0.00%	Note 4	$ -	Need for operating	$ -	-	$ -	$90,856	$90,856

Note 1: The above transations were all made between consolidated entities in the Group and have been reversed.

Note 2: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial which were audited by independent accountants as of 31 December 2019.

The Company: $7,517,407*40%=$3,006,963

BJSB: $227,141*40%=$90,856

Note 3: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial report which were audited by independent accountants as of 31 December 2019. The Company: $7,517,407*40%=$3,006,963

BJSB: $227,141*40%=$90,856

Note 4: For short-term financing.

-312-

Attachment 2: Endorsement/Guarantee provided to others as of 31 December 2019

(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/ endorsemen t	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	SHSB	2	$3,006,963	$47,418	$45,159	$ -	none	0.60%	$7,517,407	Y	N	Y
0	The Company	SZSB	2	$3,006,963	$15,806	$15,053	$ -	none	0.20%	$7,517,407	Y	N	Y
0	The Company	TCSB	2	$3,006,963	$299,506	$286,007	$ -	none	3.80%	$7,517,407	Y	N	Y
0	The Company	JSEM	2	$3,006,963	$395,150	$376,325	$ -	none	5.01%	$7,517,407	Y	N	Y
0	The Company	JYSB	2	$3,006,963	$379,344	$361,272	$-	none	4.81%	$7,517,407	Y	N	Y
0	The Company	BJSB Tongan	2	$3,006,963	$646,674	$615,231	$ -	none	8.18%	$7,517,407	Y	N	Y
0	The Company	T-CONN	2	$3,006,963	$179,030	$75,265	$ -	none	1.00%	$7,517,407	Y	N	N
0	The Company	ET Hungary	2	$3,006,963	$327,179	$315,631	$241,304	none	4.20%	$7,517,407	Y	N	N
0	The Company	C&C	2	$3,006,963	$282,690	$270,954	$120,424	none	3.60%	$7,517,407	Y	N	N
0	The Company	T-CONN Zhongshan	2	$3,006,963	$426,762	$316,113	$40,041	none	4.21%	$7,517,407	Y	N	Y
0	The Company	Radbon	2	$3,006,963	$150,000	$150,000	$125,000	none	2.00%	$7,517,407	Y	N	N
1	T-CONN	T-CONN Zhongshan	2	$3,006,963	$94,230	$90,318	$ -	none	1.20%	$7,517,407	N	N	Y

Note 1: The Company and its subsidiaries are coded as follows:

1. The Company is coded "0".

2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

3. 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: 1. A company with which it does business.

4. A company in which the public company directly and indirectly holds more than 50% of the voting shares.

5. A company that directly and indirectly holds more than 50% of the voting shares in the public company.

6. A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

7. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

8. A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.

9. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

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 2019. $7,517,407*40%=$3,006,963

• 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 2019.

• 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.

-313-

Attachment 3: Securities held as of 31 December 2019. (Excluding subsidiaries, associates and joint ventures)

Holding Company	Type and name of securities	Relationship (Note 1)	Financial statement account	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	as of 31 December 2019	Note
				Shares	Carrying amount		Percentage of ownership (%)	Fair value
The Company	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	15,000,000 shares		$113,200	11.11%	$113,200	-
The Company	Top Taiwan Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	6,000,000 shares		51,579	7.50%	51,579	-
Kwan-Ze	Chengding Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	5,000,000 shares		37,699	3.70%	37,699	-
The Company	Dynahz Technologies	-	Financial assets measured at fair value through other comprehensive income- noncurrent	2,771,670 shares		40,696	16.67%	40,696	-
The Company	Top Taiwan VII Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	1,438,776 shares		15,083	3.06%	15,083	-
The Company	Gongwin Biopharm Holdings Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	235,000 shares		18,797	0.25%	18,797	-
The Company	Japan SINBON Electronics Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	75 shares		1,031	15.00%	1,031	-
Kwan-Ze	Actmax Technologies Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	-		4,692	19.00%	4,692	-
The Company	Top Taiwan III Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	569,105 shares		779	4.07%	779	-
SINBON USA L.L.C	HOTWIRE Development LLC	-	Financial assets measured at fair value through other comprehensive income- noncurrent	697,500 shares		1,261	5.00%	1,261	-
The Company	Top Taiwan II Venture Capital Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	295,000 shares		476	5.00%	476	-
The Company	Bandrich, Inc.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	330,000 shares		463	1.62%	463	-
The Company	Nextronics Engineering Corp.	-	Financial asset measured at fair value through profit or loss–current	2,950,000 shares		95,433	9.94%	95,433	-
The Company	Cayman Lan-Cheng Fund	-	Financial asset measured at fair value through profit or loss–current	30,000 shares		68,646	17.14%	68,646	-
Kwan-Ze	Hotai Finance Co., Ltd.	-	Financial asset measured at fair value through profit or loss–current	100,000 shares		8,890	0.02%	8,890	-
Kwan-Ze	UPAMC Global AIoT Fund	-	Financial asset measured at fair value through profit or loss–current	300,000 shares		3,108	-	3,108	-
The Company	Trutankless, Inc.	-	Financial asset measured at fair value through profit or loss–current	162,400 shares		1,711	-	1,711	-
			Total			$463,544

Note 1: Not required if the issuer of securities is not a related party.

-314-

Attachment 4: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019.

Related-party	Counter-party	Relationship	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Details of non-arm's length transaction	Details of non-arm's length transaction	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	JYSB	Subsidiary	Purchase	$1,537,302	41.36%	Trading condition is as same as other supplier	N/A	N/A	$(285,073)	(30.44)%
JYSB	The Company	Subsidiary	Purchase	$144,921	3.31%	Trading condition is as same as other supplier	N/A	N/A	$(37,576)	(2.63)%
HKSB	JYSB	Associates	Purchase	$1,613,611	50.20%	Trading condition is as same as other supplier	N/A	N/A	$(257,657)	(36.10)%
JYSB	HKSB	Associates	Purchase	$120,123	2.74%	Trading condition is as same as other supplier	N/A	N/A	$(46,552)	(3.26)%
JSEM	JYSB	Associates	Purchase	$180,027	22.37%	Trading condition is as same as other supplier	N/A	N/A	$(196,893)	(45.66)%
T-CONN	T-CONN Zhongshan	Associates	Purchase	$366,279	34.20%	Trading condition is as same as other supplier	N/A	N/A	$(45,123)	(24.02)%
SZSB	HKSB	Associates	Purchase	$371,604	92.16%	Trading condition is as same as other supplier	N/A	N/A	$(112,104)	(99.52)%
JYSB	SINBON USA	Associates	Purchase	$180,874	4.13%	Trading condition is as same as other supplier	N/A	N/A	$(12,694)	(0.89)%
BJSB Tongan	JSEM	Associates	Purchase	$164,972	8.45%	Trading condition is as same as other supplier	N/A	N/A	$(5,900)	(1.41)%

Attachment 5: Receivables from related parties with accounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2019.

Related-party	Counter-party	Relationship	Amount	Average collection turnover	Overdue account receivable-related parties	Overdue account receivable-related parties	Collection in subsequent period	Allowance for doubtful debts
					Amount	Processingmethod
JYSB	The Company	The Company	$285,073	5.37	$ -	-	$285,073	$ -
JYSB	HKSB	Associates	$257,657	7.32	$ -	-	$256,445	$ -
JYSB	JSEM	Associates	$196,893	1.37	$ -	-	$130	$ -
HKSB	SZSB	Associates	$112,104	4.82	$ -	-	$67,144	$ -

-315-

Attachment 6: The business relationship, significant transactions and amounts between parent company and subsidiaries

No. (Note 1)	Related-party	Counterparty	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	JYSB	1	Purchase	$1,537,302	(Note 4)	11.56%
1	JYSB	The Company	2	Sales	$1,537,302	(Note 4)	11.56%
1	JYSB	HKSB	3	Sales	$1,613,611	(Note 4)	12.14%
2	HKSB	JYSB	3	Purchase	$1,613,611	(Note 4)	12.14%
2	HKSB	SZSB	3	Sales	$371,604	(Note 4)	2.79%
5	SZSB	HKSB	3	Purchase	$371,604	(Note 4)	2.79%
3	T-CONN	T-CONN Zhongshan	3	Purchase	$366,279	(Note 4)	2.75%
4	T-CONN Zhongshan	T-CONN	3	Sales	$366,279	(Note 4)	2.75%
1	JYSB	SINBON USA	3	Purchase	$180,874	(Note 4)	1.36%
7	SINBON USA	JYSB	3	Sales	$180,874	(Note 4)	1.36%
6	JSEM	JYSB	3	Purchase	$180,027	(Note 4)	1.35%
1	JYSB	JSEM	3	Sales	$180,027	(Note 4)	1.35%
1	JYSB	The Company	2	Purchase	$144,921	(Note 4)	1.09%
0	The Company	JYSB	1	Sales	$144,921	(Note 4)	1.09%
8	BJSB Tongan	JSEM	3	Purchase	$164,972	(Note 4)	1.24%
6	JSEM	BJSB Tongan	3	Sales	$164,972	(Note 4)	1.24%
2	HKSB	JYSB	3	Sales	$120,123	(Note 4)	0.90%
1	JYSB	HKSB	3	Purchase	$120,123	(Note 4)	0.90%

• 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, interim 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.

-316-

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2019: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2019	Investment as of 31 December 2019	Investment as of 31 December 2019	Net income (loss) of investee company	Investment income (loss) recognized	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%	$662,744	$393,627	$393,627	Subsidiary
The Company	Kwan-Ze	New Taipei City, Taiwan	Holding company	$235,600	$235,600	23,560,000 shares	100.00%	$409,311	$81,795	$81,795	Subsidiary
The Company	Top Taiwan IV Venture Capital Co., Ltd	Taipei City, Taiwan	Holding company	$22,400	$22,400	2,240,000 shares	20.00%	$5,548	$(50,322)	$(10,065)	Investee under the equity method
The Company	SB BVI	British Virgin Islands	Holding company	USD45,021,000 $1,461,158	USD45,021,000 $1,461,158	-	100.00%	$3,828,051	$575,888	$575,888	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$30,648	$30,648	2,945,034 shares	3.59%	$61,011	$438,625	$15,733	Investee under the equity method
The Company	S E L	Mauritius	Holding company	- -	USD3,726,000 $120,732	-	-	-	$(25)	$(16)	Subsidiary
The Company	SINBON USA LLC	4265 Gibson Dr., Tipp City , OH 45371, USA	Logistic center.	USD5,159,000 $161,943	USD4,059,000 $128,061	-	100.00%	$84,135	$(8,457)	$(8,457)	Subsidiary
The Company	SINBON Europe GmbH	Pfarrkirchen, Germany	Logistic center.	EUR5,209,000 $185,241	EUR5,209,000 $185,241	-	100.00%	$43,143	$(64,915)	$(64,915)	Subsidiary
The Company	Radbon Avionics Inc.	Miaoli County, Taiwan	Manufacturing and selling signal cables and cabin wiring.	$33,000	$33,000	3,300,000 shares	55.00%	$37,218	$12,166	$6,691	Subsidiary
The Company	T-CONN	New Taipei City, Taiwan	Manufacturing and selling a wide variety of connectors, wires and cables.	$166,066	$116,804	15,577,522 shares	61.18%	$238,664	$65,019	$39,630	Subsidiary
T-CONN	S P L	Mauritius	Logistic center.	$3,039	$3,039	-	100.00%	$14,157	$(9,350)	$ -	Subsidiary
SINBON USA L.L.C	SINBON Circuits & Cables LLC	815 South Brown School Road Vandalia, OH 45377, USA	Selling a wide variety of connectors and cables.	USD 2,704,000	USD 1,604,000	-	51.00%	USD1,908,000 $57,435	USD(58,000) $(1,792)	$ -	Subsidiary
SINBON USA L.L.C	Worldwide Wire Harnesses Co.,Ltd.	Samoa	Logistic center.	USD 75,000	USD 75,000	-	50.00%	USD25,000 $760	USD(67,000) $(2,059)	$ -	Subsidiary
Kwan-Ze	Argocy Research Inc.	Hsinchu City, Taiwan	Produce and sells a variety of electronic components, computers andperipheral equipment	$147,175	$147,175	14,624,200 shares	17.81%	$307,250	$438,625	$ -	Investee under the equity method

-317-

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2019 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2019: (Excluding investment in Mainland China)

Investor	Investee company (Note1)	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December 2019	Investment as of 31 December 2019	Investment as of 31 December 2019	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value			(Note 1 )
Worldwide Wire Harnesses Co., Ltd.	STT	U.S.A Tennessee	Logistic center.	USD140,000 $4,542	USD140,000 $4,542	-	100.00%	USD(200,000) ($6,008)	USD(67,000) $(2,059)	$ -	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.	Argosy International B.V.	The Netherlands	Leasing operations and sell ODM and OED	$22,314	$22,314	-	100.00%	$15,766	$180	$ -	Investee under the equity method
Argocy Research Inc.	Ari International (Singapore)Pte.,Ltd. (AIS)	Singapore	Holding company	$32,697	$32,697	-	100.00%	$2,901	$(1,588)	$ -	Investee under the equity method
Argocy Research Inc.	Global Saber Electronics Co., Ltd.	Mauritius	Selling a wide variety of connectors and cables.	$ -	$ -	-	100.00%	$67,676	$11,211	$ -	Investee under the equity method
Argocy Research Inc.	ROTEC LIMITED	British Virgin Islands	Holding company	$268,479	$268,479	8,550 shares	77.38%	$458,066	$65,852	$ -	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%	$133,903	$65,852	$ -	Investee under the equity method
SINBON Europe GmbH	SINBON Holding GmbH	Germany	Holding company	EUR5,184,000 $181,113	EUR5,184,000 $181,113	-	51.00%	EUR1,256,000 $42,373	EUR(3,491,000) $(120,862)	$ -	Subsidiary
SINBON Holding GmbH	ET Hungary	Hungary	Selling,Producting and Processing a wide variety of connectors and cables.	EUR1,080,000 $38,364	EUR1,080,000 $38,364	-	100.00%	EUR(2,406,000) $(81,212)	EUR(3,346,000) $(115,846)	$ -	Subsidiary
SINBON Holding GmbH	ET Germany	Germany	Logistic center.	EUR1,245,000 $44,225	EUR1,245,000 $44,225	-	100.00%	EUR1,172,000 $39,561	EUR(85,000) $(2,956)	$ -	Subsidiary

Note 1: （ 1 ） "Investee company", "Addres", "Main businesses and products", "Initial Investment"and "Investment as of 31 December 2019" shall be filled in the Company's investmet. to the subsidiaries' re-investment in corresponding order, and indicate the relationship in the Notes.

• （ 2 ） "Net income (loss) of investee company" shall be filled in net income (loss) of investee for the year ended 31 December 2019.

• （ 3 ） "Investment income (loss) recognized", shall be filled in only investment income (loss) under the equity method, and the investor shall confirm that its investment income (loss) includes the subsidiaries' re-investment.

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Attachment 8: 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 1 January 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2019	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2019	Accumulated Inward Remittance of Earnings as of 31 December 2019
					Outflow	Inflow
BJSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 4,450,000	Indirectly investment in Mainland China through remittance from a third region.	USD 1,020,000 $30,719	$ -	$ -	USD 1,020,000 $30,719	RMB1,629,000 $7,292	100.00%	RMB1,629,000 $7,292 (Note 1)	RMB52,558,000 $227,141	USD11,030,000 $351,623
JYSB	Manufacturing and selling a wide variety of connectors, wires and cables.	USD 37,780,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 22,050,000 $705,108	$ -	$ -	USD 22,050,000 $705,108	USD17,940,000 $554,840	100.00%	USD17,940,000 $554,840 (Note 1)	USD97,032,000 $2,921,231	USD25,244,000 $780,847
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	USD98,000 $3,029	100.00%	USD98,000 $3,029 (Note 1)	USD5,429,000 $163,455	USD2,371,000 $72,709
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	USD420,000 $12,987	100.00%	USD420,000 $12,987 (Note 1)	USD9,200,000 $276,977	RMB20,700,000 $93,644
TCSB	Selling a wide variety of connectors, wires and cables.	USD14,000,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 8,000,000 $248,003	$ -	$ -	USD 8,000,000 $248,003	USD2,095,000 $64,777	100.00%	USD2,095,000 $64,777 (Note 1)	USD18,163,000 $546,819	USD196,000 $5,890
China Digital Library Corp.Ltd.	Technology development of computer software, transfer of technology, advisory service	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)	$ -	$ -
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	$ -	-	$ -	$ -	$ -
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	$ -	-	$ -	$ -	$ -

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Attachment 8: 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 1 January 2019	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2019	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2019	Accumulated Inward Remittance of Earnings as of 31 December 2019
					Outflow	Inflow
JY Sinact	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 5,266,000 $164,599	$ -	$ -	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	$ -	-	$ -	$ -	$ -
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	$ -	-	$ -	$ -	$ -
T-CONN Zhongshan	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 58,300,000	Indirectly investment in Mainland China through companies registered in a third region.	USD 3,086,000 $99,007	USD 600,000 $18,522	$ -	USD 3,686,000 $117,529	$51,570	61.18%	$30,721 (Note 2)	$66,197	$ -
BJSB Tongan	Manufacturing and selling a wide variety of connectors, wires and cables.	RMB 130,000,000	Indirectly investment in Mainland China through remittance from a third region.	USD 3,000,000 $89,134	$ -	$ -	USD 3,000,000 $89,134	$511,901	100.00%	$511,901 (Note 1)	$1,652,000	USD13,797,000 $418,425
USD 52,087,000 USD 53,420,000 N/A (Note 4) Accumulated Investment in Mainland China as of 31 December 2019 Investment Amounts Authorized by Investment Commission, MOEA Upper Limit on Investment
Accumulated Investment in Mainland China as of 31 December 2019			Investment Amounts Authorized by Investment Commission, MOEA		Upper Limit on Investment
USD 52,087,000			USD 53,420,000		N/A (Note 4)

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

Note 2: The financial statements were not audited by independent accountants.

Note 3: The financial statements were audited by other independent accountants.

Note 4: According to No. Shen-Zi-09704604680 issued by Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is not limited to 60% of net worth or consolidated net worth specified by the Investment Commission.

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• 6.5. The company or affiliates has/have experienced financial difficulty in the last year and by the report publishing date, and its impact on the corporate financial status: N/A

• 321 -

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 the last two years and future responsive plans:

Expressed in Thousands of NTD

Year Item	2018	2019	Difference	Difference
			Amount	Percentage
Current assets	11,361,548	13,568,882	2,207,334	19.43
Fixed assets	1,854,001	2,154,817	300,816	16.23
Other assets	177,400	353,925	176,525	99.51
Total assets	14,201,536	17,184,967	2,983,431	21.01
Current liabilities	6,981,572	8,823,257	1,841,685	26.38
Long-term liabilities	7,646	7,956	310	4.05
Total liabilities	7,404,904	9,387,754	1,982,850	26.78
Capital stock	2,266,954	2,326,694	59,740	2.64
Capital surplus	904,086	1,228,781	324,695	35.91
Retained earnings	3,743,536	4,443,155	699,619	18.69
Total equities	6,796,632	7,797,213	1,000,581	14.72
Note: (1) Other assets increase was caused by pre-paid equipment for the second factory in Miaoli . (2) Current liabilities increase because of the short-term loan and accounts payable growth. Also long-term company bond transfer into. (3) Capital surplus increased as conversion with convertible bonds.

7.2. Financial performance: Major causes of material changes in revenue, net profit margin, and net profit before tax and estimated sales quantity in the last two years and their references, and future responsive plans:

	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD	Expressed in Thousands of NTD
	2018		2019		Increased) (reduced) amount	Variable proportion %
	Subtotal	Total	Subtotal	Total
Total operating revenue Minus: Sales return and Sales discount Sales income Other operating revenues Net operating revenue amount Operating cost Operating gross profit Minus: End unrealized grossprofit	(44,036 ) 	15,689,289 (44,036)  15,645,253 -  15,645,253 (11,725,308)  3,919,945	(48,193 ) 	17,934,363 (48,193 )  17,886,170 -  17,886,170 (13,296,502)  4,589,668	2,245,074 (4,157)  2,240,917  2,240,917 (1,571,194)  669,723	14.31 9.44  14.32  14.32 13.40  17.09

• 322 -

==> picture [465 x 378] intentionally omitted <==

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

2018 2019 Increased)
Variable
(reduced)
Subtotal Total Subtotal Total proportion %
amount
Plus: Beginning realized a
gross profit
   
Net operating gross profit 3,919,945 4,589,668 669,723 17.09
Operating expense (2,288,256) (2,696,910) (408,654) 17.86
   
Net operating margin 1,631,689 1,892,758 261,069 16.00
Non-operating income
288,379 276,405 (11,974) (4.15)
and expense
   
Income from Continuing
Operation before Income 1,920,068 2,169,163 249,095 12.97
Tax
Income tax expense (548,539) (491,312) 57,227 (10.43)
   
Income from Continuing
Operation after Income 1,371,529 1,677,851 306,322 22.33
Tax
Addition/reduction variable analysis:
Income from Continuing Operation after Income Tax increased as some subsidiaries in China obtained the
certification of high-tech enterprises which was applicable to the preferential tax rate.
----- End of picture text -----

7.3. Cash flows

7.3.1. Analysis of cash flows in the last two years

Year Item	Year Item	2018	2018	2018	2019	2019	Increase (reduction) proportion	Increase (reduction) proportion
Cash flow ratio		4.92%			19.21%		14.29%
Cash flow adequacyratio		78.45%			81.73%		3.28%
Cash reinvestment ratio		-6.54%			6.95%		13.49%
Note: Cash flow ratio upwas caused byincreasingcash flows from business activities.
7.3.2. Analysis of cash flows in the coming year						Expressed in Thousands of NTD
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
984,384	337,756		1,296,057	26,083		-		-

Expressed in Thousands of NTD

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.

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7.5. Re-investment policies and major causes of profits or losses in recent years, improvement plans, and investment plans in the coming year:

Expressed in Thousands of NTD

Description Item	The amount by 31 Dec 2019	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 trade	Operations of that company brought profits.	－	－
SINBON International Enterprise Co., Ltd.	1,461,158	Reinvestment framework consideration and international trade.	Operations of the subsidiaries of that company brought profits.	－	－
Guanze Co, Ltd.	235,600	Professional domestic investor.	Operations of the subsidiaries of that company brought profits.	－	－
SINBON Tongan Electronics (Beijing)	89,134	Cultivation of and service for customers in northern China.	Operations of that company brought profits.	－	－
SINBON USA LLC.	161,943	Cultivation of customers in the USA.	Operation losses and in the beginning stage.	Continuous cultivation of local customers.
Radbon Avionics Inc.	33,000	Development products in the aviation industry.	Operation losses and in the beginning stage.	Continuous cultivation of local customers.
SINBON Europe GmbH	185,241	Cultivation of customers in the EU.	Operation losses and in the beginning stage.	Continuous cultivation of local customers.
T-conn Precision Corporation	166,066	Connecters’manufactu ring and trading	Operations of that company brought profits.	－	－

7.6. Risk items

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

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

  • We will continuously observe future market changes and take action to prevent risk at appropriate times to reduce potential risk from the interest rate volatility.

• (2) Impact on profits and losses of exchange rate volatility and future countermeasures in recent years In 2019, the recognized profits from the exchange were NT$36,192 thousands. 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 unfavourable impact was reported in 2018.

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• 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 2019, we did not engage in high-risk, high-leverage investments.

• (2) In 2019, 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$7,517,407 thousands. By the end of 2019, the balance of endorsements and guarantees was NT$2,917,328 thousands.

• 7.6.3. Future R&D plans and estimated R&D investments: The Company's R&D plan focuses on the development of high-value-added electronics-related products. In the future, the plan will be executed to meet the demand from customers.

• In 2019, we invested a total of NT$632,828 thousand for R&D, with 9% higher than the previous year. In the future, SINBON actively develops electronic parts and components for the Internet of Thing (IoT), robots, and smart home applications. We will spend at least NT$300 million each year or over 3% of revenue on R&D in the future.

• 7.6.4. Impact of major policy or legal changes at home and abroad on organizational finance and countermeasures: None.

• 7.6.5. Impact of technology and industry changes on organizational finance and countermeasures:

• In response to the rapid change of the high-tech industry, we have a professional R&D team to develop products meeting customer demand to enhance competitiveness.

• 7.6.6. Impact of corporate image on organizational crisis management and 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 fulfil 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: The expansion of the company's plants in Jiangyin and Tong cheng are expected to increase revenues and profits in China and provide more job opportunities; the risk may arise from the fact that when the revenues and profits are not as expected, the plant will be idle and the cost will increase; the Company could create other business or transfer business from other sites to prevent it happens.

• 7.6.9. The risk from the 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.

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• 7.6.11. Impact and risk of the right of management change and countermeasures: None.

• 7.6.12. For convicted or in-progress major litigation, non-litigation, or administrative litigation incidents involving the company, directors, supervisors, executives, mortgage responsible persons, major shareholders holding over 10% of shares, and subsidiaries whose outcomes may bring material impact to shareholder equities or stock prices, disclose the fact in dispute, amount, litigation start date, major parties involved, and the status by the report publishing date: None.

• 7.6.13. Other major risks and countermeasures: None.

7.7. Other major items: None.

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8. Special Notes

8.1. Information of affiliates

• 8.1.1. Consolidated business reports of affiliates

• (1) Affiliates organization chart

==> picture [397 x 375] intentionally omitted <==

(2) Basic information of affiliates

Name	Establishment Date	Paid-in Capital	Address	The major scope of business orproducts
Beijing SINBON Electronics Co., Ltd. (Factory)	1993.12.20	US$4.45 million	Building No. 26, Liando U Valley, No. 15, Jingsheng South 4th Street, Majuqiao, Tongzhou, District, Beijing,101102,China	Production and sales of comprehensive connectors.
Hong Kong SINBON Electronics Co., Ltd. (Contact Office)	1995.6.20	HK$95.61 million	Unit 05, 18/F, Lemmi Centre, 50 Hoi Yuen Road, Kwun Tong, Kowloon,HongKong	Sales of comprehensive cables, connectors, and other electronic parts and components.

• 327 -

Name	Establishment Date	Paid-in Capital	Address	The major scope of business orproducts
Shanghai SINBON Electronics Co., Ltd. (Sales Office)	1996.3.15	US$3.28 million	3F, Building 60, No. 461, Hong-Cao Rd., Shanghai 200233, China	Sales of comprehensive Cables, connectors, and other electronic parts and components.
SINBON International Enterprise CompanyLimited	2000.10.24	US$52.78 million	P.O. Box 3340, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLAND	General investment
Jiangyin SINBON Electronics Co., Ltd (Factory)	2000.12.20	US$37.78 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.
Shenzhen SINBON Electronics Co., Ltd (Sales Office)	2001.05.09	US$2.81 million	Rm.802, Bld.212, Tairan Industrial Zone, Chegongmiao, Futian District, Shenzhen City, Guangdong Province 518040,China	Sales of comprehensive cables, connectors, and other electronic parts and components.
Kwan-Ze Corporation Ltd..	2003.01.22	NT$ 235.60 million	4-1F, No. 79, Xintai 5th Road, Xiji District, New Taipei City,Taiwan	General investment
Tong Cheng SINBON Electronics Co., Ltd. (Factory)	2007.07.13	US$14 million	No.168, Xing Long Rd.,Economic Development Zone, Tongcheng City, Anhui Province,China	Production and sales of comprehensive electronic connectors and cables.
Beijing SINBON Tongan Electronics Co., Ltd.	2012.02.16	RMB$130 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.
Worldwide Wire Harnesses Co.,Ltd.	2007.04.24	US$0.15 million	Samoan Islands	Overseas sales centre
SINBON Technologies Tennessee Co.,LLC.	2007.08.16	US$0.15 million	211 Industrial Park Drive Cumberland City, TN 37050	Overseas sales centre

• 328 -

Name	Establishment Date	Paid-in Capital	Address	The major scope of business orproducts
SINBON USA LLC.	2014.05.29	US$5.159 million	4265 Gibson Dr., Tipp City,Ohio 45371	Overseas sales centre
SINBON Circuits & Cables LLC	1993.12.30	US$1.727 million	815 South Brown School Road Vandalia, OH 45377,USA	Sales of comprehensive electronic connectors and cables.
Radbon Avionics Inc.	2015.12.28	NT$60 million	No. 582 Kuohwa Road, Miaoli 360, Taiwan	Production and sales of comprehensive electronic connectors and cables.
T-CONN Precision Corporation	2002.01.18	NT$254.637 million	4-3F, No. 79, Xintai 5th Road, Xiji District, New Taipei City,Taiwan	Sales of connectors and other electronic parts and components.
T-CONN Precision (Zhongshan) Corporation	2001.12.21	RMB$58.3 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	US$0.1 million	2nd Floor, Felix House, 24 Dr. Joseph Riviere Street, Port Louis, Republic of Mauritius	Offshore trading centre
SINBON Europe GmbH	2015.09	EUR 5.21 million	Passauer Str. 99 84347 Pfarrkirchen	General investment
SINBON Holding GmbH	2010.06.10	EUR 5.92 million	Passauer Str. 99 84347 Pfarrkirchen Germany	General investment
SINBON Germany GmbH	1996.11.08	EUR 550,000	Passauer Str. 99 84347 Pfarrkirchen Germany	Logistic center
SINBON Hungary Kft	1996.12.16	KFT 20 million	Tatabánya, Tarjáni út 1, 2800	Manufacturing and selling a wide variety of connectors, wires and cables
Jiangsu ENMAGIC Energy Co., Ltd.	2017.07.21	RMB 30 million	Floor 2, Building D5, No.6, Dongsheng Xilu Road, Jiangyin, Wuxi, Jiangsu,China	Selling a wide variety of connectors, wires and cables
Kunshan ENMAGIC Energy Co., Ltd.	2018.09.30	RMB 3 million	150 Bowei Road, Zhangpu Town, Kunshan City	Decentralized solar photovoltaic power generation; solar photovoltaic power plant project design, construction, operation and maintenance; solar photovoltaic power plant related technical consultation.

• 329 -

(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
Beijing SINBON Electronics Co., Ltd. (Factory)	Chairman Director President	Joseph Wang Jun-Qiang Wang and Wei-Ming Liang Chi-Chou Chang (All are representatives of Beijing SINBON Tongan Electronics Co.,Ltd.)	-	100.00%
Hong Kong SINBON Electronics Co., Ltd. (Contact Office)	Director	Joseph Wang, Wei-Ming Liang, Huang-Ji Lin, Chi-Chou Chang (All are representatives of SINBON Electronics)	-	100.00%
Shanghai SINBON Electronics Co., Ltd. (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)	-	100.00%
SINBON International Enterprise Company Limited	Chairman	Joseph Wang (Representative of SINBON Electronics)	-	100.00%
Jiangyin SINBON Electronics Co., Ltd (Factory)	Chairman Director Supervisor	Joseph Wang Wei-Ming Liang, Chi-Chou Chang, Yan-Hua Wang, Xin-Chun Wu Wen-Sen Huang (All are representatives of SINBON International Enterprise Company Limited)	-	100.00%
Shenzhen SINBON Electronics Co., Ltd (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)	-	100.00%
Kwan-Ze Corporation 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%

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Name	Title	Name or Representative	Shares Held
			Shares	Percentage
Tong Cheng SINBON Electronics Co., Ltd. (Factory)	Chairman Director Supervisor	Wei-Ming Liang Chi-Chou Chang, Guo-Cai Song Wen-Sen Huang (All are representatives of SINBON International Enterprise Company Limited)	-	100.00%
Beijing SINBON Tongan Electronics Co., Ltd.	Chairman Director Supervisor (concurrent)	Joseph Wang Jun-Qiang Wang and Wei-Ming Liang, Chi-Chou Chang (All are representatives of SINBON Electronics)	-	100.00%
Worldwide Wire Harnesses Co., Ltd.	Director	Wei-Ming Liang and Zi-Wei Lin (Representative of SINBON Electronics) LESLIE ROY WELCH (representative of Tennessee Wire Technologies LLC)	-	50.00%
SINBON Technologies Tennessee Co., LLC.	Director	Wei-Ming Liang and Zi-Wei Lin (Representative of SINBON Electronics) LESLIE ROY WELCH (representative of Tennessee Wire Technologies LLC)	-	50.00%
SINBON USA LLC.	Chairman	Wei-Ming Liang(Representative of SINBON Electronics)	-	100.00%
SINBON Circuits & Cables LLC	Chairman Director Director Director Director	Michael J. Seibert Cynthial J. Seibert (representative of Seibert Holding, INC.) Chun-Yu Chen Jia Wei Winnie Chen (representative of SINBON USA LLC.)	-	51.00%
Radbon Avionics Inc.	Chairman Director	Qi-Zhong Cheng Kuo-Hong Wang and Andy T.C. Chiu (All are representatives of SINBON International Enterprise Company Limited)	3,300,000 shares	55.00%
T-CONN Precision Corporation	Chairman Director Supervisor Supervisor	Xin-Chi Yeh Joseph Wang Chi-Chou Chang (these three people are all representatives of SINBON Electronics) Jun-Qiang Wang (representative of Wistron Corporation)	15,577,522 shares	61.18%
T-CONN Precision (Zhongshan) Corporation	Chairman Director Director	Xin-Chi Yeh Joseph Wang Jun-Qiang Wang (these three people are all representatives of T-CONN Precision Corporation)	-	61.18%

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Name	Title	Name or Representative	Shares Held
			Shares	Percentage
Super Progressive Limited	Chairman	Xin-Chi Yeh (representative of T-CONN Precision Corporation)	-	61.18%
SINBON Europe GmbH	Chairman	Wen-Sang Huang(representatives of SINBON Electronics)	-	100%
SINBON Holding GmbH	Chairman	Tibor Kovacs	-	51%
SINBON GermanyGmbH	Chairman	Tibor Kovacs	-	51%
SINBON HungaryKft	Chairma	Barrie Ryan	-	51%
Jiangsu ENMAGIC Energy Co., Ltd.	Chairman Director Supervisor	Wei-Ming Liang Chi-Chou Chang, Jun-Qiang Wang Ying Yan (All are representatives of SINBON Tongan Electronics Beijing)	-	100%
Kunshan ENMAGIC Energy Co., Ltd.	Director Supervisor	Jun-Qiang Wang Chi-Chou Chang (All are representatives of Jiangsu ENMAGIC EnergyCo.,Ltd.)	-	100%

(5) Operational performance of affiliates (2019)

Name	Authorized Capital	Total Assets	Total Liabilities	Total Equity	Operating Revenue	Operating Income	Current P/L (after tax)	EPS (after tax)
Beijing SINBON Electronics Co., Ltd. (Factory) (RMB/CNY)	32,828,851.80	52,758,486.29	200,435.75	52,558,050.54	-	(2,332,258.43)	1,628,880.56	-
Hong Kong SINBON Electronics Co., Ltd. (Contact Office) (HKD)	95,606,400	624,771,969	420,914,538	203,857,431	630,699,777	101,211,697	99,528,872	-
Shanghai SINBON Electronics Co., Ltd. (Sales Office) (RMB/CNY)	25,401,762.00	52,494,778.60	14,462,396.42	38,032,382.18	96,400,075.31	752,448.21	676,582.34	-
SINBON International Enterprise Company Limited(USD)	52,781,715	130,378,401	-	130,378,401	-	-	20,554,684	-

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Name	Authorized Capital	Total Assets	Total Liabilities	Total Equity	Operating Revenue	Operating Income	Current P/L (after tax)	EPS (after tax)
Jiangyin SINBON Electronics Co., Ltd (Factory) (RMB/CNY)	286,025,460	1,087,891,852	411,950,812	675,941,041	1,532,496,183	138,093,105	123,932,261	-
Shenzhen SINBON Electronics Co., Ltd (Sales Office) (RMB/CNY)	17,924,154.88	95,463,195.98	31,373,583.68	64,089,612.30	103,926,517.29	4,164,746.94	2,900,781.73	-
Kwan-Ze Corporation Ltd.. (TWD)	235,600,000	410,496,010	1,184,788	409,311,222	-	(72,640)	81,796,749	-
Tong Cheng SINBON Electronics Co., Ltd. (Factory) (RMB/CNY)	95,050,300	183,279,879.85	56,751,872.49	126,528,007.36	128,182,123.37	14,567,874.41	14,468,868.21	-
Beijing SINBON Tongan Electronics Co., Ltd. (RMB/CNY)	130,000,000	678,772,817.01	296,296,674.01	382,476,143.00	678,862,225.37	117,293,593.00	113,881,439.43	-
SINBON USA LLC. (USD)	5,158,541	4,065,770	1,234,935	2,830,835	8,025,927	(329,724)	(278,900)	-
Radbon Avionics Inc.(TWD)	60,000,000	238,802,820	171,131,203	67,671,617	150,787,033	14,920,742	12,165,872	-
T-CONN Precision Corporation(TWD)	254,637,300	630,211,147	237,840,921	392,370,226	845,771,087	26,121,767	65,018,549	-
T-CONN Precision (Zhongshan) Corporation (RMB/CNY)	58,301,953	85,288,780	69,587,401	15,701,379	147,936,717	12,051,730	11,216,252	-
Super Progressive Limited(USD)	100,000	552,512	73,647	478,865	124,282	(305,022)	(304,404)	-
Worldwide Wire Harnesses Co., Ltd. (USD)	150,000	50,577	65	50,512	-	-	(66,571)	-
SINBON Technologies Tennessee Co., LLC. (USD)	167,002	1,008,010	907,579	100,432	1,298,603	(66,571)	(66,571)	-
SINBON Europe GmbH(EUR)	5,208,773	1,278,457	91	1,278,36	-	(472)	(1,875,048)	-
SINBON Holding GmbH(EUR)	43,600	2,156,128	26,532	2,129,596	-	(58,535)	(3,685,530)	-

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Name	Authorized Capital	Total Assets	Total Liabilities	Total Equity	Operating Revenue	Operating Income	Current P/L (after tax)	EPS (after tax)
SINBON Germany GmbH(EUR)	550,000	1,752,436	818,895	933,541	1,142,858	(381,641)	(324,051)	-
SINBON HungaryKft(KFT)	20,000	2,659,519	3,469,739	(810,220)	2,871,636	(984,735)	(1,108,004)	-
Jiangsu ENMAGIC Energy Co., Ltd. (RMB/CNY)	30,000,000	144,083,781	108,122,577	35,961,204	203,198,581	6,754,627	5,301,939	-
Kunshan ENMAGIC Energy Co., Ltd. (RMB/CNY)	3,000,000	2,981,943.87	95,263.24	3,077,207.11	89,869.13	81,270.64	77,207.11	-
SINBON Circuits & Cables LLC(USD)	1,727,070	5,780,572	5,742,806	37,766	15,623,285	27,597	(123,987)	-

8.1.2. Consolidated financial statement of subsidiaries

Statement of Compliance

SINBON’s consolidated financial statement for 2019 (period: January 1, 2019 to December 31, 2019), 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 10–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 20, 2020

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• 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.

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