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SINBON Electronics Annual Report 2021

Jul 9, 2021

52256_rns_2021-07-09_e9df6e85-308f-4c52-a474-efc9dafe99eb.pdf

Annual Report

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Taiwan Stock Exchange Code: 3023

==> picture [129 x 27] intentionally omitted <==

SINBON Electronics Co., Ltd.

2020 Annual Report

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, 2021

  1. Spokesperson and acting spokesperson

  2. (1) Spokesperson

Name: Matthew Chang Title: CFO

Phone: +886-2-2698-9999

E-mail: [email protected]

  • (2) Deputy Spokesperson

Name: Irene Chiu Title: Section manager Phone: +886-2-2698-9999 E-mail: [email protected]

  1. Address and phone number of headquarters and factories Headquarters: 4F.-13, No.79, Sec. 1, Xintai 5th Rd., Xizhi, New Taipei City 221, Taiwan Phone: +886-2-2698-9999

Factory: 582 Kuohua Rd., Miaoli City, Miaoli 360, Taiwan Phone: +886-37-330-099

  1. Stock transfer service

Name: Registrar Agency Department, Taishin Bank Address: B1F., No. 96, Section 1, Jianguo N Road, Zhongshan, Taipei 104, Taiwan Phone: +886-2-2504-8125

  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 Rd. Central Dist., Taichung 400, Taiwan Phone: +886-4-2305-5500

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 2020 1
1.2. Summary of Business Plan in 2021 3
1.3. Effect of External Competitions, Legislation, and the Overall Business 4
Environment
1.4. Future Development Strategy 4
2. Company Profile
2.1. Date of Incorporation 5
2.2. Company History 5
3. Corporate Governance
3.1. Organization 6
3.2. Directors, Supervisors and Management Team 8
3.3. Remunerations Paid to Directors, President, and Vice Presidents Last 19
Year
3.4. Implementation of Corporate Governance 23
3.5. Information Regarding the Company’s Audit Fee and Independence 43
3.6. CPA Change Information 45
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. 45
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. 46
3.9. Relationship among the Top Ten Shareholders 48
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 49
4. Fundraising
4.1. Capital and Shares 50
4.2. Corporate Bonds 56
4.3. Issue of Preferred Shares 57
4.4. Global Depository Receipts 57
4.5. Issue of Certificates of Employee Stock Subscription 57
4.6. Issue of Employee Restricted Shares 57
4.7. Acquisition (including mergers, buyouts, and spin-offs) 57
4.8. Items to be Disclosed in Capital Utilization Plans 57
5. Operational Highlights
5.1. Business Activities 58
5.2. Market and Sales Overview 71
5.3. Human Resources 73
5.4. Environmental Protection Expenditure 73
5.5. Labor Relations 74
5.6. Important Contracts 76
6. Financial Highlights
6.1. Five-Year Financial Summary 78
6.2. Five-Year Financial Analysis 82
6.3. Supervisors’ or Audit Committee’s Report in the Most Recent Year 84
6.4. Consolidated Financial Statements for the Years Ended December 31,
2020 and 2019, and Independent Auditors’ Report 85
6.5. Financial Statements for the Years Ended December 31, 2020 and 2019,
and Independent Auditors’ Report 209
6.6. The Company or Affiliates Has/Have Financial Difficulty in the Last Year
and by Report Publishing Date, and Its Impact on Corporate Financial
Status 320
7. Review and Analysis of Financial Situation and Financial Performance and Risk
Items
7.1. Financial Situation 321
7.2. Financial Performance 321
7.3. Cash Flows 322
7.4. Impact of Major Capital Expenses on Finance in Recent Years 322
7.5. Re-investment Policies and Major Causes of Profits or Losses in Recent
Years, Improvement Plans, and Investment Plans in the Coming Year 323
7.6. Risk Items 323
7.7. Other Major Items 324
8. Special Notes
8.1. Summary of Affiliated Companies 326
8.2. Private Placement Securities in the Most Recent Years 333
8.3. The Shares in the Company Held or Disposed of by Subsidiaries in the
Most Recent Years 333
8.4. Other supplementations 333
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 333

1. Letter to Shareholders

1.1. Business Performance in 2020

1.1.1. Performance of business plan 2020

The business performance of SINBON Electronics in 2020 was as follows: Parent company's net operating income was NT$5,570,753 thousand; gross profit rate was 24%; operating net profit was NT$324,942 thousand; net profit after tax was NT$2,113,868 thousand; and EPS after tax was NT$9.08. The consolidated net operating income was NT$21,797,542 thousand; consolidated gross profit rate was 26%, consolidated net operating profit was $ 2,649,177 thousand; consolidated net profit after tax was NT$2,183,500 thousand, less the non-controlling interest (the interest of other shareholders of re-invested enterprises with non-controlling ownership) was NT$69,632 thousand, the sum was NT$2,113,868 thousand; and consolidated EPS after tax was NT$9.08.

  • 1.1.2. Budget execution

Compared to the business plan of 2020, the revenue completion rate was 101.9%; the gross profit completion rate was 101.6%; the operating income completion rate was 110.5%; net profit after tax completion rate was 111.57%. The actual number is broadly in line with the Budget.

1.1.3. Revenue and profitability analysis

Revenue andprofitabilityanalysis
Item 2019 2020
Return on assets(%) 10.00
8.93
Return on equity (%) 22.86
23.09
Profit Before Tax to Capital Stock(%) 93.29
117.19
Profit Margin(%) 9.61
9.70
EPS(NT$) 7.47
9.08
  • 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.
  • 1 -
Year Results of R&D
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.
2018~2019 1. The sensor in wearable airbag hip protector and smart
water heater.
2. AIOT (Artificial Intelligence of Things) and IoT application
system.
2020~Now 1. Develop factory automation collectors, which can collect
the operation data of machines and the number of times
the tools are used, make real-time output statistics on
electronic reporting interface and upload data to the
cloud system in time with the Internet of Things
technology.
2. Develop the factory MES system, provide a real-time
information platform, assist the factory staffs to control
the production status, track the process progress and
equipment maintenance early warning, and assist the
management staff to track more efficiently.
3. Develop an image recognition system to assist the factory
staffs to confirm the thread color, thread position and
label content, and eliminate the probability of error from
human identification.
4. Development and application of IoT Based Smart Vehicle
electronic control system.

In 2020 we invested a total of NT$683,312 thousand for R&D, with 8% higher than the previous year. SINBON actively develops electronic parts and components for the Internet of Thing (IoT), automated storage, smart vehicle, green business, robots, and smart home applications and improve factory efficiency. We will spend at least NT$300 million each year or over 3% of revenue on R&D in the future.

  • 2 -

1.2. Summary of Business Plan in 2021

  • 1.2.1. The business policy of 2021

  • (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.

  • (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

  • 3 -

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 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

  • 4 -

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.

Jul. 2020 The board resolved that disposal of the subsidiary SINBON Holding GmbH and acquisition of the subsidiary SINBON Hungary Kft. Aug. 2020 The board resolved that acquisition of private placement of Unsecured Convertible Bonds issued by Nextronics Engineering Corp. Oct. 2020 The board resolved that the Company prepares to establish a joint venture company with Top Taiwan Venture Capital, to establish a joint venture company with insurance companies, the capital increase for SINBON Hungary Kft and the capital increase for Beijing SINBON Tongan.

Mar. 2021 The board resolved that the subsidiary Beijing SINBON Tongan to establish new subsidiary “Xuzhou Yingmai Energy Technology Co., Ltd.”.

  • 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 19, 2021, the board resolved that the distribution of cash dividends at NT$6.30/share. The proposal will be submitted to the shareholders’ meeting for recognition on June 11, 2021.

  • 5 -

3. Corporate Governance

3.1. Organization

3.1.1. The organizational structure of SINBON

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

Shareholders’ Meeting
Board of Directors Audit Committee
Auditing Remuneration
Office Committee
Chairman &
CEO
Business Strategy Team
Vice Chairman
CEO Vice President President
Legal Affairs Business Unit Group
Finance
Management Human Global Sales
Resource
Quality Assurance and
Strategy
Marketing Information Manufacture Service
Technology Research &
Development
Administration
Global Supply
Management
Operation Performance
Management
----- End of picture text -----

3.1.2. Functions and duties of major departments

Department and Supervisor

Functions and Duties

  • (1) Implement the instructions and material management issues from BOD.

(2) Proposal for group business objectives and strategic directions.

Business Strategy Team Joseph Wang(Chairman & CEO), Daniel Yeh(Vice Chairman), Mite Liarng(President), Mite Liarng(VP), Kevin Chen(VP), Matthew Chang(Director),

  • (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.

Chairman & CEO Joseph Wang

  • (7) Responsibility for performing corporate social responsibility and maintaining corporate culture.

  • (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.

  • 6 -

Department and Supervisor Functions and Duties
Headquarters office
Kevin Chen(VP)		 In charge of group HR, administration, MIS, and legal functions.
President
Mite Liarng		 In charge of product manufacture, sales, and R&D functions.
Auditing Office
Hui-Jun Li (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
Matthew 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
Lily Huang (Director)		 (1) Industry research and analysis.
(2) Assess and research new business and products.
(3) Make overall marketingstrategies.
Legal
Maggie Huang (Director)		 (1) Plan and handle legal affairs.
(2) Manage andprotect intellectualproperty.
HR Development Center
Fiona Lee (Director)
HR Service Center
San Li(Ass. Director)		 (1) Make and implement human resources planning.
(2) The survey, plan and implement organizational training needs.
(3) Implement wage management.
Management Information System
Frank Wu (Ass. Director)		 (1) Install, maintain, and manage IT equipment (hardware and
software).
(2) Promote computerization within the organization.
(3) Provide IT management reports for individual departments.
Administration
Jena Feng (Ass. Director)		 (1) In charge of group administration function.
(2) Communicate and coordinate with relative departments.
Business Unit Group
Mite Liarng (Concurrently taking up by
President)
In charge of domestic sales activities.
Global Sales Group
Jesse Huang (VP)		 In charge of global sales activities.
QAMS
David Lee (Director)		 Integration of the Group’s quality assurance, manufacturing, and
engineering resources.
Global Supply Management
Brandon Zou (Ass. Director)		 In charge of group sourcing and supply chain management.
Research & Development
Mite Liarng (Concurrently taking up by
President)
In charge of product research & development.
Operation Performance Management
Katherine Tsai (Ass. Manager)		 In charge of group operation performance analysis.
  • 7 -

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 13,2021) (April 13,2021) (April 13,2021) (April 13,2021)
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 3.22% 2,131,236 0.91%
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 Daniel Yeh M Jun 08, 2018 3 Nov 4,
1997		 1,707,373 0.76% 1,707,373 0.73%
500,000		 0.21%
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 Mite
Liarng		 M Jun 08, 2018 3 May 6,
2005		 1,015,523 0.45%
746,107		 0.32%
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 1.63% 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 1.77% 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		 -
  • 8 -
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.		 9 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 -
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.		 N/A N/A N/A -
  • 9 -
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		 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

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 Renewable Energy Co., Ltd. (representative of the Company) , and director of Enmagic Renewable Energy Co., Ltd. (representative of the Company).

  • 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), director of Top Taiwan XII Venture Capital (representative of the Company), . director of Tai-Yi Investment Co., Ltd.

  • 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 Renewable Energy Co., Ltd. (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), chairman of SINBON Jiangyin Beijing Tongzhou Branch (representative of the Company) 、 director of SINBON Technologies Tennessee LLC (representative of the Company), director of Tai-Yi Investment Co., Ltd.

  • 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.

  • 9 Chairman, Global Aluminum LLC.Chairman, Zhen-Bon Industrial Co., Ltd.Supervisor, G-Tech Optoelectronics Corp.Supervisor, Tang-Juan Company

  • 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 DEPO Auto Parts Ind. Co., Ltd., ShareHope Medicine and AMICCOM Electronic; Director of Radbon Avionics Inc. (representative of SINBON Electronics); Corporate representative of Shin Kong Financial Holding Co., Ltd.; Director of ELAN Microelectronics and AVATACK;. director of T-CONN Precision (representative of the Company); Vice Chairman of Shin Kong Life Insurance Co., Ltd.

  • 11Chairman of Top Taiwan VI Venture Investment, independent director of Formosa Plastics, director of AcBel Polytech Inc., director of ELAN Microelectronics, and chairman of Waterland Financial Holdings, supervisor of Aces Electronics, director of Nuvoton Technology Corporation, independent director of Inventec Corporation.

  • 10 -

Table 1: Major Shareholder of the Company

Table 1: Major Shareholder of the Company
(April 13,2021)
Name of The Company1 Major Shareholders of the Company2
Argosy Research Inc. Kwan-Ze Co., Ltd. (16.89%), Fubon Life Insurance Co., Ltd. (7.12%), Cao-Liang Wang
(6.43%), New Labor Pension Fund (3.96%),SINBON Electronics (3.52%), Shu-Zhen Chen
(2.93%), UPAMC GREAT CHINA Fund (1.75%),DRIEHAUS INCOME FUND I, LLC (1.64%),
Bing-Ze Huang (1.31%), Yi-Ben Yuan (1.30%),.
Tai-Yi Investment Co., Ltd. Zhen-Chun Wang (29.42%), Wei-Chun Wang (29.39%), Daniel Yeh(8.80%), Mite
Liarng(8.19%), John Wang(8.00%), Mu-Xiao Liu(4.72%), Liang Chen Investment Co., Ltd.
(2.83%), Huang-Ji Lin (1.92%), Matthew Chang (1.78%), Jesse Huang (1.13%),
Kuo-Shian Investment Co.,Ltd. Kuo-HongWang(33.33%),Xing-hui Liu(33.33%),XiangWang(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

(April 13, 2021)

Table 2: Major Shareholders of Major the Company in Table 1
(April 13,2021)
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%)
New Labor Pension Fund N/A
SINBON Electronics Co., Ltd. Fubon Life Insurance Co., Ltd. (5.80%), Southeast Asia Small Companies Fund PLC (3.85%),
Joseph Wang (3.22%), Aberdeen Standard OEIC II- ASI Global Smaller Companies Fund
(2.93%), Swedbank Robur Technology (2.15%), Swedbank Robur Globalfond (2.15%), Tai-Yi
Investment Co., Ltd. (1.77%), Argosy Research Inc. (1.63%), SmallCap World Fund, Inc.
(1.57%), NAN SHAN LIFE INSURANCE CO., LTD (1.57%).
UPAMC GREAT CHINA Fund N/A
DRIEHAUS INCOME FUND I, LLC N/A
Liang Chen Investment Co., Ltd. Shu-Ying Gao (95%), Chao-Yeh Wang (5%)

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)

Requirements
Name1
Do independent directors have over 5 years of
relevant experience and the following professional
qualifications?
Do independent directors have over 5 years of
relevant experience and the following professional
qualifications?
Do independent directors have over 5 years of
relevant experience and the following professional
qualifications?		 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Compliance with independency2 Concurrently serving as an independent
director of other public companies.
A faculty member of the discipline
of commerce, law, finance,
accounting, or other academic
disciplines of a higher education
establishment relating to the
business of the Company		 A judge, public prosecutor, attorney,
certified public accountant, or other
professional or technical specialist
who has passed a national
examination and has been awarded
a certificate in a profession required
by the business of the Company		 Have work experience in
commerce, law, finance, or
accounting, or otherwise required
by the business of the Company		 1 2 3 4 5 6 7 8 9 10 11 12
Joseph Wang No No Yes 0
Daniel Yeh No No Yes 0
Cao-Liang Wang,
representative of
ArgosyResearch		 No No Yes 0
Mite Liarng 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
Te-Cheng Chiu No No Yes 2

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.

  • 14 -

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

(April 13,2021) (April 13,2021) (April 13,2021)
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 Mite Liarng Jan 5, 1998 746,107
0.32%
0
0.00%
0
0.00%
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 Jesse Huang Feb11, 1998 230,602
0.10%
0
0.00%
0
0.00%
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 Kevin Chen Apr 20, 2018 57,712
0.02%
0
0.00%
0
0.00%
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 David Lee Oct 1, 1996 101,220
0.04%
0
0.00%
0
0.00%
BA in Industrial Management, National Cheng
Kung University.
QC Manager,ChenfengMachinery
N/A		 N/A N/A N/A -
Director ROC George Hsu Nov 1, 2000 17,166
0.01%
457
0.00%
0
0.00%
BS in Industrial Engineering and
Management, National United University
Sales Manager,Rui Zun Electronics.		 N/A N/A N/A N/A -
Director ROC Lily Huang Apr 21, 1997 5,930
0.00%
0
0.00%
0
0.00%
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 -
CFO ROC Matthew
Chang		 Oct 1, 2000 225,389
0.10%
266,124
0.11%
0
0.00%
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 Fiona Lee Sep 1, 2014 0
0.00%
0
0.00%
0
0.00%
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 -
  • 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 Cindy Lin Sep 1, 2014 30,403
0.01%
0
0.00%
0
0.00%		 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 Maggie Huang Sep 1, 2014 0
0.00%
62
0.00%
0
0.00%
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 Joy Wu Oct 1, 2014 2,864
0.00%
0
0.00%
0
0.00%		 BA in Spanish, Tamkang University Director of JY
SINBON
(representative of
the Company)		 N/A N/A N/A -
Director ROC Chris Hsu Oct 1, 2014 25,178
0.01%
0
0.00%
0
0.00%
Department of Shipping and Transportation
Management, National Taiwan Ocean
University.
Longwell Company
FedEx Taiwan		 N/A N/A N/A N/A -
Director ROC Henry Huang Sep 01, 2018
0
0.00%
0
0.00%
0
0.00%
Chief Operating Officer ofGolden Bridge
Electech Inc.		 N/A N/A N/A N/A -
Ass. Director ROC Jeff Sung Oct 1, 2014 1,689
0.00%
0
0.00%
0
0.00%		 Ping Tung College of Technology
Sales Manager, Wieson Technologies		 N/A N/A N/A N/A -
Ass. Director ROC Major Lin Jun 1, 2015 588
0.00%
0
0.00%
0
0.00%
Department of Electronic Engineering,
National United University
Section Chief of ECH-CAST MFG. CORP.		 N/A N/A N/A N/A -
Ass. Director ROC Allen Lin Apr 18, 2016 9,202
0.00%
0
0.00%
0
0.00%		 Electronic Engineering, China University of
Science and Technology		 N/A N/A N/A N/A -
Ass. Director ROC Tina Kuo Apr 18, 2016 0
0.00%
0
0.00%
0
0.00%
National Taiwan University of Science and
Technology / Department of Business
Administration		 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 Jena Feng Apr 09, 2018 0
0.00%
4,000
0.00%
0
0.00%
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 Elton Chen Apr 09, 2018 7,000
0.00%
0
0.00%
0
0.00%
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
0.00%
0
0.00%		 Department of Electronic Engineering,
Fu-Hsin Trade & Arts School		 N/A N/A N/A N/A -
Ass. Director ROC Cynthia Kuo Apr 10, 2018 6,262
0.00%
100
0.00%
0
0.00%
Master degree, Department of Applied
Foreign Languages,National Yunlin University		 N/A N/A N/A N/A -
of Science and Technology
Ass. Director ROC Terence Chen Oct 29, 2018 0
0.00%
0
0.00%
0
0.00%
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 Brown Fu Jun 3, 2019 0
0.00%
3,000
0.00%
0
0.00%		 Stratford University, MBA.
PM, LITE-ON Technology		 N/A N/A N/A N/A -
Ass. Director ROC Frank Wu May. 1, 2020 11,000
0.00%
9,000
0.00%
0
0.00%
Department of Applied Mathematics,
Chinese Culture University
Manager of MIS, NEXCOM International
Co.Ltd.		 N/A N/A N/A N/A -
Ass. Director ROC San Li May. 1, 2020 0
0.00%
0
0.00%
0
0.00%
PhD in Department of Business
Administration, National Chengchi University
Consultant in President office, Avatack Co.
Ltd.		 N/A N/A N/A N/A -
Ass. Director ROC Teresa Lin May. 1, 2020 14,165
0.01%
0
0.00%
0
0.00%		 Department of Chinese Literature, National
Taiwan University		 N/A N/A N/A N/A -
Ass. Director ROC Karen Kao May. 1, 2020 1,288
0.00%
0
0.00%
0
0.00%		 Department of International Business,
Tunghai University		 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.

  • 17 -

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

3 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 Renewable Energy Co., Ltd. (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), chairman of SINBON Jiangyin Beijing Tongzhou Branch (representative of the Company) 、 director of SINBON Technologies Tennessee LLC (representative of the Company), director of Tai-Yi Investment Co., Ltd.

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), Director of Nextronics Engineering Corp. (representative of the Company).

6 Supervisor 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 Beijing SINBON TongAn Renewable Energy Co., Ltd. (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), supervisor of Kunshan Yingmai Energy Technology Co., Ltd., and supervisor of Enmagic Renewable Energy Co., Ltd.

  • 18 -

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

3.3.1. Directors (including independent directors)

(December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; Expressed in Thousands of NTD) (December 31,2020; 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 - - - - 16,200 16,200 1,480 1,480 0.84 0.84 2,973 3,491 - - 12,320 - 12,320 - 1.56 1.58 -
Director Mite Liarng
Director Daniel 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
Independent
Director		 Chi-Lin Wei - - - - 3,800 3,800 220 220 0.19 0.19 - - - - - - - - - - -
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
1,000,000 (incl.)-2,000,000 (excl.) Zheng-Yan Chang
Chi-Lin Wei
Ho-Min Chen
Te-ChengChiu		 Zheng-Yan Chang
Chi-Lin Wei
Ho-Min Chen
Te-ChengChiu		 Zheng-Yan Chang
Chi-Lin Wei
Ho-Min Chen
Te-ChengChiu		 Zheng-Yan Chang
Chi-Lin Wei
Ho-Min Chen
Te-ChengChiu
2,000,000 (incl.)-3,500,000 (excl.) Kuo-Hong Wang, rep of
Kuo-Shian Investment
Co., Ltd.
Cao-Liang Wang, rep of
Argosy Research
Wei-Chun Wang, rep of
Tai-Yi Investment Co.,
Ltd.
Daniel Yeh
Mite Liarng		 Kuo-Hong Wang, rep of
Kuo-Shian Investment
Co., Ltd.
Cao-Liang Wang, rep of
Argosy Research
Wei-Chun Wang, rep of
Tai-Yi Investment Co.,
Ltd.
Daniel Yeh
Mite Liarng		 Kuo-Hong Wang, rep
of Kuo-Shian
Investment Co., Ltd.
Cao-Liang Wang, rep
of Argosy Research
Daniel Yeh
Wei-Chun Wang, rep
of Tai-Yi Investment
Co., Ltd.		 Kuo-Hong Wang, rep
of Kuo-Shian
Investment Co., Ltd.
Cao-Liang Wang, rep
of Argosy Research
Daniel Yeh
Wei-Chun Wang, rep
of Tai-Yi Investment
Co., Ltd.
3,500,000(incl.)-5,000,000(excl.) Joseph Wang Joseph Wang
5,000,000 (incl.)-10,000,000 (excl.) Mite Liarng
Joseph Wang		 Mite Liarng
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 21,700,000 21,700,000 36,993,000 37,511,000

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 31,2020;Expressed in Thousands of NTD) (December 31,2020;Expressed in Thousands of NTD) (December 31,2020;Expressed in Thousands of NTD) (December 31,2020;Expressed in Thousands of NTD) (December 31,2020;Expressed in Thousands of NTD) (December 31,2020;Expressed in Thousands of NTD) (December 31,2020;Expressed in Thousands of NTD)
Title Name Base
Compensation
(A)2		 Severance
Pay and
Pensions
(B)		 Bonuses,
Special
Disbursement,
etc. (C)3		 Employee Profit Sharing (D)4 The proportion
of the sum of
items A-D in
net profit after
tax8		 Compensation Paid to Supervisors from
Non-consolidated Affiliates9
From SINBON From All Consolidated
Entities5		 From SINBON From All Consolidated
Entities5		 From SINBON From All Consolidated
Entities5		 From
SINBON		 From All
Consolidate
d Entities4		 From SINBON From All Consolidated
Entities5
Cash Stock (Fair
Market Value)		 Cash Stock (Fair
Market Value)
President Mite Liarng 5,274 6,291 - - 3,895 3,895 1,600 - 1,600 - 0.51 0.56 -
Vice
President		 Jesse Huang
Kevin Chen

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

Remuneration Intervals

Intervals of Remuneration Paid to President and Vice
Presidents (NT$)		 Name of President and Vice Presidents Name of President and Vice Presidents
From SINBON6 From All Consolidated
Entities7
Under 1,000,000 - -
1,000,000(incl.)-2,000,000(excl.) - -
2,000,000(incl.)-3,500,000(excl.) - -
3,500,000 (incl.)-5,000,000 (excl.) Mite Liarng; Jesse Huang;
Kevin Chen		 Mite Liarng; Jesse Huang;
Kevin Chen
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 10,769,000 11,786,000

1The 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.

2Fill in the base compensation, allowances, and severance pay of presidents and vice presidents in the last year.

3This 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.

4This 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.

5The total amount of all remunerations paid to presidents and vice presidents by all consolidated entities (including SINBON).

  • 6The 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.

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 all consolidated entities (including SINBON).

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

9

  • a. This refers to the amount 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.

  • 21 -

*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, 2020; 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 Mite Liarng - 2,470 2,470 0.12
Vice President Jesse Huang
Vice President Kevin Chen
Director David Lee
Director George Hsu
Director LilyHuang
Director Fiona Lee
Director CindyLin
Director Maggie Huang
Director JoyWu
Director HenryHuang
Ass. Director Jena Feng
Ass. Director San Li
Ass. Director Chris Hsu
Ass. Director Jeff Sung
Ass. Director Teresa Lin
Ass. Director Major Lin
Ass. Director Allen Lin
Ass. Director Tina Kuo
Ass. Director Frank Wu
Ass. Director Elton Chen
Ass. Director Jason Huang
Ass. Director Cynthia Kuo
Ass. Director Terence Chen
Ass. Director Brown Fu
Ass. Director Karen Kao
CFO Matthew 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.

  • 22 -

  • 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 31,2020
Item Theproportion of Total Remuneration Amount in Net Profit after Tax(%)
2020 2019
SINBON All Consolidated
Entities		 SINBON All Consolidated
Entities
Directors 1.56 1.58 1.75 1.78
President and Vice Presidents 0.51 0.56 0.54 0.68
Note: Although the amount of remunerations in 2020 was less than in 2019, 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 2020 and April 2021, 5 (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 5 0 100% -
Director Mite Liarng 5 0 100% -
Director Daniel Yeh 5 0 100% -
Director Cao-Liang Wang, rep. of
ArgosyResearch Inc.		 5 0 100% -
Director Wei-Chun Wang, rep. of Tai-Yi
Investment Co.,Ltd.		 5 0 100% -
Director Kuo-Hong Wang, rep. of
Kuo-Shian Investment Co., Ltd.		 4 1 80% -
Director Te-Cheng Chiu 5 0 100% -
Independent
Director		 Chi-lin Wei 5 0 100% -
Independent
Director		 Zheng-Yan Chang 5 0 100% -
Independent
Director		 Ho-Min Chen 5 0 100% -
  • 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 24 2020 Aug. 14 2020 Oct. 23 2020 Mar. 19 2021 Apr. 23 2021
Chi-lin Wei No objections No objections No objections No objections No objections
Zheng-Yan Chang No objections No objections No objections No objections No objections
Ho-Min Chen No objections 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:

  • A. Jul. 24, 2020: The Company waives part of its pre-emptive right to participate in capital injection into Argosy Research. Director Cao-Liang Wang, as the chairman of Argosy Research, shall not participate in the vote on the matter in consideration of a conflict of interest.

  • B. Oct. 23, 2020: The Company prepares to establish a joint venture company with Top Taiwan Venture Capital. Director Te-Cheng Chiu and Director Wei-Chun Wang, as President and Ass. Director of Top Taiwan shall not participate in the vote on the matter in consideration of a conflict of interest.

  • C. Oct. 23, 2020: The subsidiary T-CONN Precision issues employee stock options. Director Daniel Yeh, as the chairman of T-CONN Precision, shall not participate in the vote on the matter in consideration of a conflict of interest.

  • D. Apr. 23 2021: Amendment of the Company preparing to establish a joint venture company with Top Taiwan Venture Capital. Director Te-Cheng Chiu and Director Wei-Chun Wang, as President and Ass. Director of Top Taiwan shall not participate in the vote on the matter in consideration of a conflict of interest.

  • E. Apr. 23 2021: The disposal of the subsidiary T-CONN Precision shares. Director Daniel Yeh, as the chairman of T-CONN Precision, shall not participate in the vote on the matter in consideration of a conflict of interest. Director Joseph Wang and Director Te-Cheng Chiu, as directors of T-CONN Precision, shall not participate in the vote on the matter in consideration of a conflict of interest.

  • (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 23, 2020 and the results have been published on the website: https://www.sinbon.com/en/corporate-governance, the rating was 100%.

  • 24 -

  • 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.

3.4.2. Evaluation of Board of Directors

Frequency Period Scope Method Content
Once per Year 2020/01/01~
2020/12/31		 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 2020 and April 2021, 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 5 100% -
Independent Director Zheng-Yan Chang 5 100% -
Independent Director Ho-Min Chen 5 100% -
Annotations
(1) a. Matters relatingto Article 14-5 of the Securities and Exchange Act:
Date
Agenda and subsequent processes
Jul. 24,2020
 Approval of the consolidated financial statement of Q2
2020
 Approval of renewal of the credit line from Taipei Fubon
Bank.
 Approval of renewal of the credit line from The
Export-Import Bank of the Republic of China.
 Approval of renewal of the credit line from Bank
SinoPac.
 Approval of renewal of the credit line from HSBC
(China)
 Approval of renewal of the credit line from
HSBC(Taiwan).
 Approval of renewal of the credit line and the credit
limit of financial derivatives from Taishin Bank.
 The Company waives part of its pre-emptive right to
participate in capital injection into Argosy Research.
 Adjustment the Company’s investment structure in
European region and the disposal of the subsidiary
SINBON HoldingGmbH.
Date Agenda and subsequent processes Board resolutions
and how the
company handles the
opinions
Jul. 24,2020  Approval of the consolidated financial statement of Q2
2020
 Approval of renewal of the credit line from Taipei Fubon
Bank.
 Approval of renewal of the credit line from The
Export-Import Bank of the Republic of China.
 Approval of renewal of the credit line from Bank
SinoPac.
 Approval of renewal of the credit line from HSBC
(China)
 Approval of renewal of the credit line from
HSBC(Taiwan).
 Approval of renewal of the credit line and the credit
limit of financial derivatives from Taishin Bank.
 The Company waives part of its pre-emptive right to
participate in capital injection into Argosy Research.
 Adjustment the Company’s investment structure in
European region and the disposal of the subsidiary
SINBON HoldingGmbH.		 All of the
independent
directors raised no
objection and
approved by the
Board of Director.
  • 25 -
Aug. 14, 2020  The Company acquire private placement of Unsecured
Convertible Bonds issued by Nextronics Engineering
Corp.
 Approval of renewal of the credit line from CTCB.
 Approval of renewal of the credit line from HSBC
(China).
Oct. 23, 2020  Approval of the consolidated financial statement of Q3
2020.
 Approval of 2021 Audit planning
 Approval of renewal of the credit line from Cathay Bank
and HSBC(Taiwan).
 The Company prepares to establish a joint venture
company with Top Taiwan Venture Capital.
 The Company prepares to establish a joint venture
company with insurance companies.
 Approval of the subsidiary T-CONN Precision issues
employee stock options.
 Approval of SINBON Hungary Kft Capital Increased by
Cash.
 Approval of Beijing SINBON Tongan Capital Increased by
Cash.
 Approval of renewal of loan to the subsidiary “SINBON
Hungary Kft”.
 Approval of the issuance of 7th domestic unsecured
convertible bonds for an amount not to exceed
NTD1,300,000,000.
Mar. 19, 2021  Approval of the consolidated financial statement and
individual financial statements of 2020.
 Approval of the profit allocation plan of 2020.
 Approval of the Statement of Compliance of Internal
Control System Compliance of 2020.
 Approval of the assessment results of CPA
independency: Complied
 Approval of amendment to the Audit Committee
charter.
 Approval of Beijing SINBON Tongan to establish new
subsidiary “Xuzhou Yingmai Energy Technology Co.,
Ltd.”.
 Approval of issuing Relevant Commitments for Beijing
SINBON TongAn to conduct an IPO on the overseas
stock exchange.
 Approval of renewal of the credit line from Land Bank
Mizuho Bank, Taiwan Bank, Bank SinoPac, DBS(Taiwan)
and DBS(China).
Apr. 23, 2021  Approval of the consolidated financial statement of Q1
2020
 Approval of renewal of the profit allocation plan of
2020.
 Approval of renewal of the credit line from
HSBC(Taiwan), HSBC (China), Mizuho Bank and Taipei
Fubon Bank.
 Approval of amendment of the Company preparing to
establish a joint venture company with Top Taiwan
Venture Capital.
 Approval of the disposal of the subsidiary T-CONN
Precision shares.
  • 26 -
b. Other matters resolved by the audit committee member with support of two thirds of directors
but without approval of the audit committee: None
(2) Formation and duty of supervisors (the committee is composed of all independent directors)
a. Internal control systems and including related policies and procedures;
b. Assessment of the effectiveness of the internal control system;
c. Correction procedure of acquire or dispose of assets、derivatives transactions、material lending
funds, endorsements or guarantees;
d. Related-party transactions and potential conflicts of interests involving executive officers and
directors;
e. Material asset or derivatives transactions;
f. Material lending funds, endorsements or guarantees;
g. Offering or issuance of any equity-type securities;
h. Hiring or dismissal of an attesting CPA, or the compensation given thereto;
i. Appointment or discharge of financial, accounting, or internal auditing officers;
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, the proposal content, board resolutions, and the handling of opinion expressed by
supervisors:
Date
Name
July 24 2020
Aug. 14 2020
Oct. 23 2020
Mar. 19, 2021
Apr. 23, 2021
Chi-Lin Wei
No objections
No objections
No objections
No objections
No objections
Zheng-Yan Chang
No objections
No objections
No objections
No objections
No objections
Ho-Min Chen
No objections
No objections
No objections
No objections
No objections		 b. Other matters resolved by the audit committee member with support of two thirds of directors
but without approval of the audit committee: None
(2) Formation and duty of supervisors (the committee is composed of all independent directors)
a. Internal control systems and including related policies and procedures;
b. Assessment of the effectiveness of the internal control system;
c. Correction procedure of acquire or dispose of assets、derivatives transactions、material lending
funds, endorsements or guarantees;
d. Related-party transactions and potential conflicts of interests involving executive officers and
directors;
e. Material asset or derivatives transactions;
f. Material lending funds, endorsements or guarantees;
g. Offering or issuance of any equity-type securities;
h. Hiring or dismissal of an attesting CPA, or the compensation given thereto;
i. Appointment or discharge of financial, accounting, or internal auditing officers;
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, the proposal content, board resolutions, and the handling of opinion expressed by
supervisors:
Date
Name
July 24 2020
Aug. 14 2020
Oct. 23 2020
Mar. 19, 2021
Apr. 23, 2021
Chi-Lin Wei
No objections
No objections
No objections
No objections
No objections
Zheng-Yan Chang
No objections
No objections
No objections
No objections
No objections
Ho-Min Chen
No objections
No objections
No objections
No objections
No objections		 b. Other matters resolved by the audit committee member with support of two thirds of directors
but without approval of the audit committee: None
(2) Formation and duty of supervisors (the committee is composed of all independent directors)
a. Internal control systems and including related policies and procedures;
b. Assessment of the effectiveness of the internal control system;
c. Correction procedure of acquire or dispose of assets、derivatives transactions、material lending
funds, endorsements or guarantees;
d. Related-party transactions and potential conflicts of interests involving executive officers and
directors;
e. Material asset or derivatives transactions;
f. Material lending funds, endorsements or guarantees;
g. Offering or issuance of any equity-type securities;
h. Hiring or dismissal of an attesting CPA, or the compensation given thereto;
i. Appointment or discharge of financial, accounting, or internal auditing officers;
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, the proposal content, board resolutions, and the handling of opinion expressed by
supervisors:
Date
Name
July 24 2020
Aug. 14 2020
Oct. 23 2020
Mar. 19, 2021
Apr. 23, 2021
Chi-Lin Wei
No objections
No objections
No objections
No objections
No objections
Zheng-Yan Chang
No objections
No objections
No objections
No objections
No objections
Ho-Min Chen
No objections
No objections
No objections
No objections
No objections		 b. Other matters resolved by the audit committee member with support of two thirds of directors
but without approval of the audit committee: None
(2) Formation and duty of supervisors (the committee is composed of all independent directors)
a. Internal control systems and including related policies and procedures;
b. Assessment of the effectiveness of the internal control system;
c. Correction procedure of acquire or dispose of assets、derivatives transactions、material lending
funds, endorsements or guarantees;
d. Related-party transactions and potential conflicts of interests involving executive officers and
directors;
e. Material asset or derivatives transactions;
f. Material lending funds, endorsements or guarantees;
g. Offering or issuance of any equity-type securities;
h. Hiring or dismissal of an attesting CPA, or the compensation given thereto;
i. Appointment or discharge of financial, accounting, or internal auditing officers;
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, the proposal content, board resolutions, and the handling of opinion expressed by
supervisors:
Date
Name
July 24 2020
Aug. 14 2020
Oct. 23 2020
Mar. 19, 2021
Apr. 23, 2021
Chi-Lin Wei
No objections
No objections
No objections
No objections
No objections
Zheng-Yan Chang
No objections
No objections
No objections
No objections
No objections
Ho-Min Chen
No objections
No objections
No objections
No objections
No objections		 b. Other matters resolved by the audit committee member with support of two thirds of directors
but without approval of the audit committee: None
(2) Formation and duty of supervisors (the committee is composed of all independent directors)
a. Internal control systems and including related policies and procedures;
b. Assessment of the effectiveness of the internal control system;
c. Correction procedure of acquire or dispose of assets、derivatives transactions、material lending
funds, endorsements or guarantees;
d. Related-party transactions and potential conflicts of interests involving executive officers and
directors;
e. Material asset or derivatives transactions;
f. Material lending funds, endorsements or guarantees;
g. Offering or issuance of any equity-type securities;
h. Hiring or dismissal of an attesting CPA, or the compensation given thereto;
i. Appointment or discharge of financial, accounting, or internal auditing officers;
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, the proposal content, board resolutions, and the handling of opinion expressed by
supervisors:
Date
Name
July 24 2020
Aug. 14 2020
Oct. 23 2020
Mar. 19, 2021
Apr. 23, 2021
Chi-Lin Wei
No objections
No objections
No objections
No objections
No objections
Zheng-Yan Chang
No objections
No objections
No objections
No objections
No objections
Ho-Min Chen
No objections
No objections
No objections
No objections
No objections		 b. Other matters resolved by the audit committee member with support of two thirds of directors
but without approval of the audit committee: None
(2) Formation and duty of supervisors (the committee is composed of all independent directors)
a. Internal control systems and including related policies and procedures;
b. Assessment of the effectiveness of the internal control system;
c. Correction procedure of acquire or dispose of assets、derivatives transactions、material lending
funds, endorsements or guarantees;
d. Related-party transactions and potential conflicts of interests involving executive officers and
directors;
e. Material asset or derivatives transactions;
f. Material lending funds, endorsements or guarantees;
g. Offering or issuance of any equity-type securities;
h. Hiring or dismissal of an attesting CPA, or the compensation given thereto;
i. Appointment or discharge of financial, accounting, or internal auditing officers;
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, the proposal content, board resolutions, and the handling of opinion expressed by
supervisors:
Date
Name
July 24 2020
Aug. 14 2020
Oct. 23 2020
Mar. 19, 2021
Apr. 23, 2021
Chi-Lin Wei
No objections
No objections
No objections
No objections
No objections
Zheng-Yan Chang
No objections
No objections
No objections
No objections
No objections
Ho-Min Chen
No objections
No objections
No objections
No objections
No objections
Date
Name		 July 24 2020 Aug. 14 2020 Oct. 23 2020 Mar. 19, 2021 Apr. 23, 2021
Chi-Lin Wei No objections No objections No objections No objections No objections
Zheng-Yan Chang No objections No objections No objections No objections No objections
Ho-Min Chen No objections 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.

  • 27 -

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 firewall system
within its conglomerate structure?
(4) Does the company establish internal
rules against insiders trading with
undisclosed information?



(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
No
No
No
No
(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 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.
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?		 (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, and 1industry analysis. (2)
1of 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.











No.
  • 28 -
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 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?



(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. 23, 2020 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. 19, 2021. 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
independencyhas been detected.













No.
No.
No.
  • 29 -
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 all been completed and
disclosed on the company's website and MOPS.






















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-cont
act		 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.
  • 30 -
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 toget more information.		 No.

  • 31 -

  • 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.

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.

  • 32 -

  • (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.

(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, 4

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 4 0 100% Re-election
Committee
Member		 Zheng-Yan Chang 3 0 100% Join on March 14,
2019.
Committee
Member		 Mu-Xiao Liu 3 1 75% Re-election
The main issues reviewed and summarized below: The Company’s
responses
Submitted to the
Board of Director
and approved.
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.
Jul. 24, 2020 To review and approve the remuneration for the company's new
manager.
  • 33 -

Other matters to be disclosed ：

  • (1) If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None, if any will post it on MOPS material information.

  • (2) Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None, if any will post it on MOPS material information.

  • Note

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

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

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

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
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.
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 established "Corporate Social Responsibility
Committee" to report the effectiveness and progress of CSR
implementation to the board once a year.		 No
3.
Environmental issues
(1) Does the company establish proper
environmental management systems
based on the characteristics of their
industries?		 (1) The Company establishes the Green Committee to
supervise the effectiveness of environmental policy
implementation and implement the ISO14001 EMS
(obtained certification in 2002, The certificate is valid from
27 April 2018 until 06 April 2021).		 No
  • 34 -
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
(2) Does the company endeavor to utilize
all resources more efficiently and use
renewable materials which have low
impact on the environment?		 (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 selects and uses eco-friendly materials.
(3) The Company adopts the design for life-cycle extension
policy.
(4) The Company adopts power-saving design and uses green
packaging.
(5) The Company establishes and implements the green
product management system to control
environmental-concerned chemical substances in the
supplychain to reduce environmental and health risks.		 No
(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?		 (1) Please refer 2019 CSR report.
CH4.2 Climate Change Management
https://www.sinbon.com/tw/csr/report		 No
(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) In 2012, the Company passed the ISO 14064-1 GHG
inventory for enterprise certification, and we implement
GHG inventory every year since then.
(2) 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 2019 CSR report CH4.
(3) The others, please refer 2019 CSR report.		 No
4.
Social issues
(1)
Does the company formulate
appropriate management policies and
procedures according to relevant
regulations and the International Bill of
Human Rights?
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.		 No
  • 35 -
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
(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?
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'
salaryand rewards.		 No
(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?		 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.		 No
(4)
Does the company provide its
employees with career development
and training sessions?		 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.
(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
procedurepolicies implemented?
(1) The company's marketing and labeling of products comply
with relevant laws and regulations, and it is prohibited to
deceive, mislead, fraud or do any behavior that
undermines consumer trust and harms consumer rights.
(2) The Company categorizes the problems reflected in
customer complaints and take timely action to resolve
them to regain customer satisfaction.
No
(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.		 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
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 since 2015.
No
  • 36 -
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
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.

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?
(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.		 No
No
  • 37 -
(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?		 (3) The Company includes the
above code, SOP, and conduct
guidelines in annual
training/education courses.		 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 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?



(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 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
theEthicalCorporate
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
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 among all parties
involved.		 No
No
No

  • 38 -

  • 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: No www.sinbon.com

    - (2) MOPS website[2] .

    - (3) In 2020 no punishment for violation of fair and ethical business operations was reported.

  • 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.

  • 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 and periodic internal audit.

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

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

    • 3.4.8. 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:

  • 39 -

(1) Statement of Internal Control

Statement of Compliance of the Internal Control System

March 19, 2021

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 2020:

  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, 2020, 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 19, 2021, 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

Mite Liarng President

  • 40 -

    • (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: The Company was fined NTD60,000 for delayed notification of work-related injuries in May 2020.

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

  • Mar. 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 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

Apr. 23, 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

  • 41 -

Jun. 12, 2020 Shareholder Approval of of the 2019 Business Report and Financial Statements
Meeting Result: Adopted and published meeting minutes on MOPS
Approval of of distribution on 2019 profits
Result: Adopted and distributed on 5 Aug., 2020.
Amendment to the Company's Corporate Charter (Articles of
Incorporation)
Result: Passed and published meeting minutes on MOPS
Approval of the subsidiary Beijing SINBON TongAn Electronics Co., Ltd.
made an initial public offering of RMB common stock (A shares) and
applied for listing on the oversea Stock Exchange.
Result: Passed and published meeting minutes on MOPS
Jul. 24,2020 Board Meeting  Approval of the consolidated financial statement of Q2 2020
 Approval of the remuneration for the company's new manager.
 Approval of renewal of the credit line from Taipei Fubon Bank.
 Approval of renewal of the credit line from The Export-Import Bank of the
Republic of China.
 Approval of renewal of the credit line from Bank SinoPac.
 Approval of renewal of the credit line from HSBC (China)
 Approval of renewal of the credit line from HSBC(Taiwan).
 Approval of renewal of the credit line and the credit limit of financial
derivatives from Taishin Bank.
 Approval of the Procedures for Preparation of Financial Statements.
 Approval of amendment to the Regulations for Related-Party Transactions.
 The Company waives part of its pre-emptive right to participate in capital
injection into Argosy Research.
 Adjustment the Company’s investment structure in European region and
the disposal of the subsidiary SINBON Holding GmbH.
Aug. 14, 2020 Board Meeting  The Company acquire private placement of Unsecured Convertible Bonds
issued by Nextronics Engineering Corp.
 Approval of renewal of the credit line from CTCB.
 Approval of renewal of the credit line from HSBC (China).
Oct. 23, 2020 Board Meeting  Approval of the consolidated financial statement of Q3 2020.
 Approval of 2021 Audit planning
 Approval of renewal of the credit line from Cathay Bank and HSBC(Taiwan).
 Approval of amendment to Corporate Governance Code of Practice
 The Company prepares to establish a joint venture company with Top
Taiwan Venture Capital.
 The Company prepares to establish a joint venture company with
insurance companies.
 Approval of the subsidiary T-CONN Precision issues employee stock
options.
 Approval of SINBON Hungary Kft Capital Increased by Cash.
 Approval of Beijing SINBON Tongan Capital Increased by Cash.
 Approval of renewal of loan to the subsidiary “SINBON Hungary Kft”.
 Approval of the issuance of 7th domestic unsecured convertible bonds for
an amount not to exceed NTD1,300,000,000.
Mar. 19, 2021 Board Meeting  Approval of the consolidated financial statement and individual financial
statements of 2020.
 Approval of the profit allocation plan of 2020.
 Approval of the Statement of Compliance of Internal Control System
Compliance of 2020.
 Approval of the assessment results of CPA independency: Complied
 Approval of amendment to the Remuneration Committee charter, the
Shareholders’ Meeting Rules and Procedures, Rules Governing the Scope
of Powers of Independent Directors, the Audit Committee charter and
Rules Governing the Scope of Powers of Independent Directors.
 Approval of a by-election of all directors.

  • 42 -

  • Approval of the nomination of candidates for the election of directors and independent directors.

  • Approval of the lifting of competition restriction between new directors and their representatives

  • Approval of Beijing SINBON Tongan to establish new subsidiary “Xuzhou Yingmai Energy Technology Co., Ltd.”.

  • Approval of issuing Relevant Commitments for Beijing SINBON TongAn to conduct an IPO on the overseas stock exchange.

  • Approval of renewal of the credit line from Land Bank Mizuho Bank, Taiwan Bank, Bank SinoPac, DBS(Taiwan) and DBS(China).

 Approval of the agenda and relevant affairs of the annual shareholders’ meeting of 2021 Apr. 23, Board Meeting  Approval of the consolidated financial statement of Q1 2020 2021  Approval of renewal of the profit allocation plan of 2020.

  • Approval of the new stock base date of Bondholders for the 7th Issued Domestic Secured Convertible Corporate Bonds

  • Review proposals of shareholders' meeting

  • Formulating the principle of issuing souvenirs to shareholders of shareholders

  • Approval of renewal of the credit line from HSBC(Taiwan), HSBC (China), Mizuho Bank and Taipei Fubon Bank.

  • Approval of amendment of the Company preparing to establish a joint venture company with Top Taiwan Venture Capital.

  • Approval of the disposal of the subsidiary T-CONN Precision shares.

  • 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
Director Sharon Su Nov. 14,2019 Aug. 31,2020 Personal careerplanning
Director George Hsu Nov. 01,2000 Apr. 30,2021 Personal careerplanning
Director John Wang Oct. 01,2013 Jun. 01,2020 Restructuring
Ass. Director Jeff Cheng Sep. 24,2012 Jun. 01,2020 Restructuring

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:

  • 43 -

Expressed in Thousands of NTD

CPA Firm Ernst & YoungTaiwan
Name of CPA(1) Tzu-PingHuang
Name of CPA(2) MingHungChen
Audit Service Fee 6,400
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 2020

  • 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 & YoungTaiwan Tzu-PingHuang MingHungChen 2020 -

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 6,400 6,400
5 8,000(incl.)-10,000
6 10,000 and over
  • 44 -

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-Ping Huang 6,400
 - - - 895 895 2020 Other is
CSR report
Ming Hung Chen 2020

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
None
Partyinvolved CPA Client
Voluntarytermination of assignment
Rejection of assignment
None
None
None

3.6.2. Regarding the successor CPA

3.6.2. Regardingthe successor CPA
Name of accountingfirm Ernst & YoungTaiwan
Name of CPA None
Date of appointment None
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 2020.

  • 45 -

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
2020 Until April 13 ofcurrent 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 Daniel Yeh - - - -
Director ArgosyResearch - - - -
Representative of
Director		 Chao-Liang Wang - - - -
Director Mite Liarng (269,416) -
-		 -
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)		 NA NA NA NA
Director Te-ChengChiu - - - -
Independent
Director		 Chi-Lin Wei - - - -
Independent
Director		 Zheng-Yan Chang - - - -
Independent
Director		 Ho-Min Chen - - - -
Vice President Mite Liarng - -
-		 -
Vice President Kevin Chen -
-		 - -
Director David Lee - - - -
Director George Hsu(Resigned on Apr. 30,
2021)
-
-		 (9,000) -
Director LilyHuang - - - -
Director CindyLin - - - -
Director Fiona Lee - - - -
Director Maggie Huang - - - -
Director JoyWu - - - -
Director John Wang(Resigned on Jun. 01,
2020)		 - - - -
Ass. Director Chris Hsu - - - -
Ass. Director Jeff Zheng(Resigned on Jun. 01,
2020)		 - - - -
Ass. Director Jeff Sung - - - -
Ass. Director Major Lin - - - -
Ass. Director Allen Lin - - - -
Ass. Director Tina Kuo - - - -
Ass. Director Jena Feng - - - -
Ass. Director Elton Chen - - - -
  • 46 -
2020 2020 Until April 13 ofcurrent year Until April 13 ofcurrent 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 Jason Huang - - - -
Ass. Director Cynthia Kuo - - - -
Director HenryHuang - - - -
Ass. Director Terence Chen - - - -
Ass. Director Brown Fu - - - -
Ass. Director Frank Wu - - - -
Ass. Director San Li - - - -
Ass. Director Teresa Lin - - - -
Ass. Director Karen Kao - - - -
Director Sharon Su(Resigned on Aug.
31, 2020)		 1,000 - NA NA
CFO Matthew Chang - - - -

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)
N/A

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

2Fill in pledge or redemption.

  • 47 -

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.		 13,500,167 5.80% 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%
Southeast Asia Small
Companies Fund PLC		 8,975,000 3.85% 0 0.00% 0 0.00% N/A N/A
Joseph Wang 7,508,062 3.22% 2,131,236 0.91% 0 0.00% Representative
of Tai-Yi
Investment
Co.,Ltd.		 Father and
son
Aberdeen Standard OEIC
II- ASI Global Smaller
Companies Fund		 6,825,229 2.93% 0 0.00% 0 0.00% N/A N/A
Swedbank Robur
Technology		 5,000,000 2.15% 0 0.00% 0 0.00% N/A N/A
Swedbank Robur
Globalfond		 5,000,000 2.15% 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%
Argosy Research Inc. 3,806,421 1.63% 0 0.00% 0 0.00% N/A N/A
Cao-Liang Wang
Representative of Argosy
Research Inc.		 311,388 0.13% 0 0.00% 0 0.00%
SmallCap World Fund,
Inc.		 3,649,000 1.57% 0 0.00% 0 0.00% N/A N/A
Nan Shan Life Insurance
Co.,Ltd.		 3,648,000 1.57% 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

  • 48 -

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

Directors, Supervisors,
Company		 Executives, or Enterprises under Direct/Indirect Control of the Executives, or Enterprises under Direct/Indirect Control of the Executives, or Enterprises under Direct/Indirect Control of the Executives, or Enterprises under Direct/Indirect Control of the Executives, or Enterprises under Direct/Indirect Control of the Executives, or Enterprises under Direct/Indirect Control of the
December 31,2020
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. 25,200,000 100.00%
-
-
23,560,000		 100.00%
Argosy Research 3,174,598
3.52%
15,214,152
16.89%
18,388,750		 20.41%
Beijing SINBON TongAn Renewable
EnergyCo.,Ltd.		 130,000,000
85.53%
-
-		 130,000,000 85.53%
SINBON USA L.L.C - 100.00%
-
-
-		 100.00%
Radbon Avionics Inc. 3,630,000
55.00%
-
-
3,630,000		 55.00%
SINBON Europe GmbH - 100.00%
-
-
-		 100.00%
T-Conn Precision Co., Ltd. 17,135,277
61.18%
-
-
17,135,277		 61.18%
SINBON Hungary Kft - 100.00%
-
-
-		 100.00%

1Investments by the equity method.

2Investments in Kwan-Ze.

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

  • 49 -

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
  • 50 -
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
Mar. 2021 10 450,000 4,500,000 232,937 2,329,371 Conversion with convertible bonds at 1,596 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.

  • 51 -

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

  • 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.

NB 22: Approved by Letter FSC no. 1090373515 issued by the Financial Supervisory Commission, on 23 Nov 2020.

Unit: Shares

Unit: Shares
Share
Type		 Authorized Shares/Capital Remarks
Externallycirculated shares1 Unissued Shares Total
Common
Share		 Listed shares 232,937,072 217,062,928 450,000,000 30,000,000 shares were
reserved for subscription
warrant, preferred shares
with warrants, or exercise of
subscription right conversion
of equitywarrant bonds.

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

4.1.2. Shareholder structure

13 April,2021 13 April,2021 13 April,2021
Shareholder Structure Amount Shares Held Percentage
Government Agencies 3 1,051,510 0.45 %
Financial Institutions 62 26,112,137 11.21 %
Other Corporations 206 13,299,615 5.71 %
Foreign Institutions and Individuals 385 125,097,538 53.70 %
Individuals 36,807 67,376,272 28.93 %
Others 0 0 0.00 %
Subtotal 37,463 232,937,072 100.00 %

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
13 April,2021
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















29,138
6,567
717
296
113
141
78
54
111
82
64
28
13
11
50
0		 1,090,526
11,209,004
5,153,226
3,510,957
1,974,411
3,493,207
2,751,686
2,416,159
7,886,588
11,551,141
17,831,353
13,971,811
9,182,450
9,657,259
131,257,294
0		 0.47 %
4.81 %
2.21 %
1.51 %
0.85 %
1.50 %
1.18 %
1.04 %
3.39 %
4.96 %
7.65 %
5.99 %
3.94 %
4.15 %
56.35 %
0.00 %
Total 37,463 232,937,072 100.00 %
  • 52 -

4.1.4. List of major shareholders

.1.4. List of major shareholders
Shares
Major Shareholder
Shares Held		 Percentage
Fubon Life Insurance Co.,Ltd. 13,500,167
5.80%
Southeast Asia Small Companies Fund PLC 8,975,000
3.85%
Joseph Wang 7,508,062
3.22%
Aberdeen Standard OEIC II- ASI Global Smaller Companies Fund 6,825,229
2.93%
Swedbank Robur Technology 5,000,000
2.15%
Swedbank Robur Globalfond 5,000,000
2.15%
Tai-Yi Investment Co.,Ltd. 4,130,572
1.77%
ArgosyResearch Inc. 3,806,421
1.63%
SmallCapWorld Fund,Inc. 3,649,000
1.57%
Nan Shan Life Insurance Co.,Ltd. 3,648,000
1.57%

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

Item Year Year Year
2019		 2020 By 31 Mar. 20218
Market price
per share1		 Highest 138.50
219.50
284.5
Lowest 79.70
91.90
214.5
Average 112.23
156.92
260.47
Net value per
share2		 Before distribution 31.31
39.33
42.12
After distribution 26.01
Undistributed
Undistributed
EPS Weighted average(shares) 230,104,000
232,766,000
232,778,000
EPS3 Adjusted 7.47
9.08
2.52
Unadjusted N/A
N/A
Undistributed
Dividends per
share		 Cash dividends 5.30
6.30
Undistributed
Dividends for capital surplus -
-
Undistributed
Stock
Grants		 from Retained Earnings -
-
Undistributed
from Capital Surplus -
-
Undistributed
Accumulative undistributed
dividends4		 -
-
Undistributed
ROI Price/Earnings Ratio5 15.02
17.28
25.84
Price/Dividends Ratio6 21.18
24.91
Undistributed
Cash Dividends Yield7 4.72%
4.01%
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.

  • 53 -

  • 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 2020 is as follows:

Dividends Type Amountper Share
Source		 Status
Cash dividends 5.30 Retained earnings 5.30 Distributed on 25 Aug.,2020
Stock dividends 0.00 N/A N/A
Total 5.30

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

  • 54 -

  • (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$)
35,000,000 0 20,000,000 -

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$)
30,000,000 0 17,350,000 -

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

4.1.9. Repurchase of corporate shares

30 April, 2021

Repurchase of corporate shares 30 April,2021
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
  • 55 -

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 Dec. 15,2020
Face value NT$100,000
Place of issue and transaction3 N/A
Issue Price NT$108.3
Total amount NT$1,300,000,000
Interest rate 0%
Expiry 3years,until Dec. 15,2023
Guarantee organization No.
Trustee Taishin Bank
Underwritingagency Fubon Securities
Certified lawyer Kang-De Lu
CPA Tzu-PingHuangand MingHungChen
Reimbursement method Principal in one time on expiry
Outstandingamount NT$1,300,000,000
Redemption or advance reimbursement terms As specified in Articles 18-19 of the issue and
conversion regulations.
Restrictions4 N/A
Name of credit rating agency, rating date, and rating
results		 None
Other
additional
rights		 Amount of converted (conversion or
subscription) common stocks, GDRs, and
other marketable securities by the report
publishingdate
None
Issue and conversion (exchange)
regulations		 None
Potential dilution of shares and effect on current
shareholder equity of the issue, conversion, exchange,
or subscription regulations,and issue conditions.		 Current conversion price is NT$ 203. If all
bonds transferred to stocks, EPS should be
diluted by2.67%.
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.

  • 56 -

  • 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
2020		 Until 31 Mar. 20214
Market price
of bonds2(NT$)		 Highest 118.85 137.3
Lowest 113.50 117.5
Average 115.54 129.4
Conversionprice(NT$) 203 203
Issue date Dec. 15 2020
Conversion Price at issue
(NT$)		 203
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

  • 57 -

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. CD01040 Motor Vehicles and Parts Manufacturing

  22. CD01050 Bicycles and Parts Manufacturing

  23. 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 the data of the ITRI, the future AIoT technology combined with the 5G trend will bring more connector opportunities and new technologies at the application level. As of the end of 2019, products to support 5G networks include mobile phone connectors, drones, robots. In the future, the choice of 5G devices will be more popular, with better functions, and with more affordable

  • 58 -

prices, and the potential market for connectors will become increasingly large and diverse.

In 2020, under the interactive influence of the U.S.-China trade war and COVID-19, people's lifestyles have undergone tremendous changes. In terms of medical equipment, the demand for equipment related to disease diagnosis and treatment (such as ventilators) is increasing. The same situation applies to electronic products (laptops, mobile phones). Despite the overall global automotive market downturn in the automotive industry, sales of electric vehicles are still rising against the trend. In terms of renewable energy, offshore wind power is less affected by the epidemic than land-based wind power. Countries in Europe, America, and Asia are actively developing offshore wind power under the trend of carbon reduction and non-nuclear promotion at the same time. In industrial manufacturing, “collaborative robots” can quickly perform their functions during the pandemic, thus increasing attention and demand.

  • 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

==> picture [361 x 114] intentionally omitted <==

  • 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 Medical Device Market

According to the Business Research Company, the global medical device market size is expected to recover from the downturn trend in 2020 caused by lockdowns imposed by governments around the world and is predicted to increase at a CAGR of 6.1% from USD 536.1 billion in 2021 to reach USD 603.5 billion by 2023.

  • 59 -

In the wake of COVID-19 pandemic, demands for diagnosis, patient monitoring and treatment without human contact have risen, leading to an increase in remote medical application such as artificial intelligence (AI) in healthcare, medical wearable devices, remote patient monitoring equipment and electronic health records (EHR) etc. The use of home-based diagnosis and self-care treatment is also increasing. Medical devices such as glucose monitors, insulin delivery devices, nebulizers and oxygen concentrators enable patients to diagnose and monitor diseases at home.

==> picture [294 x 205] intentionally omitted <==

Global Medical Robotics Market

Global medical robotics market is expected to increase considerably from USD 5.9 billion in 2020 to USD 12.7 billion in 2025 with a CAGR of 16.5%.

==> picture [286 x 199] intentionally omitted <==

Across the globe, the demand for minimally invasive surgeries (MIS) is increasing because of the benefits associated with procedures, such as

  • 60 -

reduced pain, fewer cuts and fast recovery periods. The robotic minimally invasive surgery can improve greater accuracy, control and efficiency, driving the growth of the global medical robotics market. However, the rising cost of robotic system can be the main restrain to the growth of medical robotics market. For example, Da Vinci system

(2) Automotive

Global Electric Vehicle Market

Due to the COVID-19 pandemic in 2020, the global sales of electric vehicles dropped by 7.5% compared with 2019. In 2020, 4 million electric vehicles were sold worldwide, including 2.063 million hybrid electric vehicles (HEV), accounting for about 51.4% of the total sales; 1.337 million battery electric vehicles (BEV), accounting for about 33.0% of the total sales; 0.632 million plug-in hybrid electric vehicles (PHEV), accounting for about 15.5% of the total sales; and 7 thousand fuel cell vehicles (FCEV), accounting for about 0.1% of the total sales.

In terms of market share, China has been the world's best-selling electric

==> picture [261 x 193] intentionally omitted <==

vehicles region, followed by Japan and the United States. The top five countries in terms of sales volume are China (25.0%), Japan (22.5%), the United States (16.7%), Germany (7.2%), and France (4.7%) respectively. In terms of the sales growth rate, the top five countries are: Germany (84.9%), Belgium (36.2%), India (30.3%), France (25.7%), and Sweden (17.1%).

  • 61 -

The driving force of the top five countries with the highest growth rates comes mostly from the influence of national policies. Let’s take the top three countries with the highest growth rate as an example: Germany has subsidies for both manufacturers and owners of its electric vehicles; Belgium government's last-year subsidies have helped stimulate the market buying activity; India government has promoted the subsidy program to the second stage for the manufacturing of hybrid electric vehicles and electric vehicles.

==> picture [278 x 193] intentionally omitted <==

In terms of sales by brand, Toyota continued to rank first in the sales of electric vehicles accounting for 32.3%, and the following places were taken by Hyundai Kia (8.6%), Tesla (8.5%), Honda (7.1%), and Renault Nissan (6.9%).

(3) Green Energy

Global Offshore Wind Power Market

According to the Global Wind Energy Council (GWEC) study, the capacity of the offshore wind power was 6.1GW in 2020, increased from 5% in 2015 to 9% in 2020. It shows that countries around the world are actively developing offshore wind power under the trend that simultane-ously promotes carbon reduction and non-nuclear homeland. The study has also indicated that the annual compound growth rate of new installation capacity of the global offshore wind power market from 2019 to 2024 is 7.4%.

  • 62 -

However, the expected number of units for 2020 in China was relatively low, compared with that in previous years. Coupled with the impact of the pandemic, it is expected that the newly installed capacity in 2020 will decline, and the market speculates that the peak of new installation will be delayed by one year to 2021.

After the pandemic, this year the impact on the offshore wind power market is relatively smaller compared with that on the onshore wind power, mainly due to the offshore wind power's large construction scale and long production cycle. In addition to that its main application market is limited to Europe, as Europe and China are two major manufacturing centers in the supply chain, making it less affected by the pandemic.

==> picture [264 x 171] intentionally omitted <==

==> picture [293 x 210] intentionally omitted <==

  • 63 -

Global Solar Power Market

In 2020, all major industries are being affected by the pandemic, and the solar photovoltaic industry is no exception. The solar power installation target among various countries failed to be completed on time due to the supply chain disruption resulting from the pandemic. However, this phenomenon is expected to slow down next year.

According to the forecast of the Interna-tional Energy Agency, global demand for solar power will grow by 10% next year, reaching 117GW of global installations by the end of 2021. Meanwhile, following the strong growth in 2021, it is predicted that there will be 119GW-148GW of new installations in 2022.

(4) Industrial Application

==> picture [319 x 180] intentionally omitted <==

Global Industrial Robotics Market

The Industrial Robotics Market is projected to rise from USD 45 billion in 2020 to USD 119 billion by 2030. Nowadays more than 2.4 million industrial robots are operating in the factories around the world. Shares of the total installation reach 30% in the automotive market, 32% in the electrical and electronics industry and 10% in the metal industry.

The automotive industry has been the largest buyer of robots for producing activities for several years. The influence is rapidly changing. As per estimates, development of the electronics industrial robotics sector is now higher than that of the automotive industry. High level of customization is becoming a standard in the electronics industry.

Collaborative robots is another trend that has been discussed for the past few years. This market hasn’t been hit as hard at the whole industrial robot

  • 64 -

market. The reason is that “cobots” can be quickly placed into effective use, which increases their attractiveness during the pandemic.

==> picture [264 x 188] intentionally omitted <==

Global AIDC Market

The overall Automation Identification & Data Capture (AIDC) market is expected to grow from USD 40.1 billion in 2020 to USD 80.3 billion by 2025; it is expected to grow at a CAGR of 14.9% during 2020–2025.

Barcode scanners and optical character recognition tools ensure faster data processing and data inputs to computer systems, further allowing its use for various purposes, such as Enterprise Resource Management (ERP) and Supply Chain Management (SCM). The AIDC market players were witnessing substantial rise in demand for their products and services prior to the emergence of COVID-19 virus in early January 2020. Now the demand for AIDC products drastically fell across various industries except for these three: healthcare, logistics, and retail.

==> picture [248 x 167] intentionally omitted <==

  • 65 -

(5) Communication

Global Smartphone and 5G Market

In 2021, the global smartphone market is expected to gradually recover from the impact of pandemic, mainly due to the 'super cycle' driven by 5G smartphones, optimization of product features by mobile phone brands, and active investment of major mobile processor manufacturers. The total production is expected to be up to 1.358 billion units, or an annual growth of 9%.

==> picture [291 x 216] intentionally omitted <==

The number of global 5G users will grow up to 330 million by 2021. Northeast Asia, due to its population advantage and the early commercialization in South Korea and China, will become the most important region for the growth of users, followed by North America and Western Europe. It is estimated that the number of global 5G users will account for 21% of the mobile users by 2025. Among them, the penetration rate of developed countries in Asia, North America, China and Europe will be higher.

Global Electric Bicycle Market

Now when economic activities are suspended by the COVID-19, the electric bicycle industry is growing. The global market size is expected to reach US$70 billion in 2017 from US$41 billion in 2020, with a compound annual growth rate of 7.9%. By 2028, the Asia Pacific region will lead the global

  • 66 -

electric bicycle market, and its high population density will be one of the main reasons to gain a strong foothold in the global market.

==> picture [260 x 215] intentionally omitted <==

Global 3D Facial Recognition Market

3D facial recognition helps with avoiding the risk of forgetting or losing an identification object or a password and completing the identity verification process with no physical touch. It is mainly used for the security measures and verification. The global 3D facial recog-nition market is expected to grow from US$3.8 billion in 2020 to US$8.5 billion in 2025, with a compound annual growth rate of 17.2% in the forecast perio

==> picture [277 x 213] intentionally omitted <==

  • 67 -

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 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.
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.

  1. 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.

  2. 68 -

Year Results of R&D
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.
2018~2019 1. The sensor in wearable airbag hip protector and smart
water heater.
2. AIOT (Artificial Intelligence of Things) and IoT application
system.
2020~Now 1. Develop factory automation collectors, which can collect
the operation data of machines and the number of times
the tools are used, make real-time output statistics on
electronic reporting interface and upload data to the
cloud system in time with the Internet of Things
technology.
2. Develop the factory MES system, provide a real-time
information platform, assist the factory staffs to control
the production status, track the process progress and
equipment maintenance early warning, and assist the
management staff to track more efficiently.
3. Develop an image recognition system to assist the factory
staffs to confirm the thread color, thread position and
label content, and eliminate the probability of error from
human identification.
4. Development and application of IoT Based Smart Vehicle
electronic control system.

In 2020 we invested a total of NT$683,312 thousand for R&D, with 8% higher than the previous year. SINBON actively develops electronic parts and components for the Internet of Thing (IoT), automated storage, smart vehicle, green business, robots, and smart home applications and improve factory efficiency. 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.

  • 69 -

    • 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.

    • 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.

  • 70 -

5.2. Market, Production and Sales:

5.2.1. Market analysis:

Expressed in Thousands of NTD

Sales Region Sales Region FY 2019 FY 2019 FY 2020 FY 2020
Amount % Amount %
Domestic Sales 1,028,200 5.75 1,317,872
6.05
Export Sales U.S. 3,344,293
18.70
3,750,432
17.20
Europe 1,199,264
6.70
1,959,424
8.99
China 10,105,185
56.50
12,507,187
57.38
Other 2,209,228
12.35
2,262,627
10.38
Total 17,886,170
100.00
21,797,542
100.00

5.2.2. Key product applications and production process:

Key Products Key applications or functions Production
process
Electronic peripheral
parts
Cables: PCMIA signal cable, computers &
peripherals I/O cable, USB link cable, flat
cable, barcode scanner I/O interface
module, LCD flex board, LCD ultra-thin
co-axial signal cable.
Connectors: Various types of connectors used in
network communications, computer
peripherals and consumer electronic
products.
System products: Sweep receiver, USB pen drive,
R&D
and
manufacture
of
service
and
consumer
electronicproducts.









1. Cable
trimming and
stripping
2. Crimping
3. Assembly,
stamping
4. Inspection
5. Packaging
Energy products Manufacture and sale of power rectifier.
Wireless
communications		 Mobile phone link cable, mobile phone connector,
wireless antenna,RFID.
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、Jiangzhou Copper Good,stable

  • 71 -

  • 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

  • Suppliers:

Expressed in Thousands of NTD

FY 2019 FY 2019 FY 2019 FY 2020 FY 2020 FY 2020 FY 2021Q1 FY 2021Q1 FY 2021Q1
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 1,413,105 11.91
None		 Supplier A 1,942,337
11.66
None		 Supplier A
674,721
13.97
None
2 Supplier B 1,090,542 9.19
None		 Supplier B 1,345,870
8.08
None		 Supplier B 335,453
6.94
None
3 Others 9,358,372 78.90
-		 Other 13,368,033
80.26
-		 Other 3,820,877
79.09
-
Net
Purchases		 11,862,019 100.00
-		 Net
Purchases		 16,656,240
100.00
-		 Net
Purchases		 4,831,051
100.00
-

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

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

Unit: 1000 pcs; Expressed in Thousands of NTD

Cable
Assembly
Connector
Other
Total
Year
By major
product (or by
Production
Quality		 2019 2019 2020 2020
Production
Capacity
Production
Output		 Production
Value		 Production
Capacity		 Production
Output		 Production
Value
- 216,400 14,203,308
-		 208,809 15,566,977
- 112,504
642,832
-		 107,222
524,026
- - - - - -
- 328,904 14,846,140
-		 316,031 16,091,003

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.

  • 72 -

5.2.6. Production and sales in the last two years:

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

Year
By major
product (or by
Production
Quality		 2019 2019 2019 2019 2020 2020 2020 2020
Domestic Sales Export Sales Domestic Sales Export Sales
Quantity Value Quantity Value Quantity Value Quantity Value
Cable 5,595
751,360
91,739		 12,319,017
7,263
1,025,718
112,865		 15,939,612
Connector 87,917
263,246
1,441,457
4,316,087
95,886
280,555
1,490,057
4,359,806
Others 532
13,593
8,723
222,867
976
11,599
15,169
180,252
Total 94,044 1,028,199
1,541,919		 16,857,971
104,125
1,317,872
1,618,091		 20,479,670

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 2019 2020 As of
March 31, 2021
No. of
Employ
ees		 Direct employee 3,745
4,620
5,128
Indirect employee 1,796
1,940
1,982
Total 5,541
6,560
7,110
Average Age 30.84
31.36
31.88
Average Seniority 3.16
3.11
2.91
Distribution of
Academic
Background		 Post-Graduate 0.02%
0.03%
0.03%
Graduate 2.10%
2.04%
1.95%
College/University 27.34%
28.02%
26.90%
High School 31.38%
32.26%
30.77%
Below High School 39.14%
37.65%
40.35%
Total 100.00%
100.00%
100.00%

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$ 30,000.

  • (2) Future response strategies and potential costs:

  • The reason for punitive damages last year: During the declaration for the removal and transportation of industrial waste, the difference between the estimated weight of waste leaving the factory and the actual weight was not adjusted in time in the system, which did not match the total inventory. The correction has been made and the payment of the fine has been completed. The regulations of personnel operation will be adjusted in the future, and cross-check procedures will be added.

  • 73 -

  • 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 channeled to dedicated water towers and cooled before being recycled again.

  • Waste generated by our Company includes waste paper or stationery products from office workers as well as small amounts of wire ends from trimming processes on the production line. Our Company enforces waste recycling and sorting. General trash is disposed of by the Miaoli City Government while industrial waste is disposed 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 Labor Insurance and National Health Insurance: All employees are enrolled by the company in Labor Insurance and National Health Insurance by the company from the day they start to protect their rights.

  • 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.

  • Regular employee health exams:

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

  • Employee training:

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

  1. Employee dividends:

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

  • 74 -

  • Employee Welfare Committee:

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

  • B. Regular employee holidays.

  • C. Organization of various club activities to promote labor communications and harmony.

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

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

  • F. Hospitalization, treatment and disaster assistance.

  • G. Employee in-service education scholarships.

  • H. Hosting of professional workshops at different times.

  • Employee retirement scheme:

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. Pension expenses under the defined contribution plan for the years ended 31 December 2020 and 2019 were NT$51,814 thousand and NT$37,823 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 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 2020. As of 31 December 2020, Defined benefit obligation and Net defined benefit liabilities were NT$138,096 and NT$72,965 thousand, respectively. Retirement applications can be submitted to the human resources department in accordance with the company's electronic sign-off system.

  1. Free parking:

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

  3. Some leave regulations that better than the Labor Standards Act:

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

  5. 75 -

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

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

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

5.6. Important contracts:

Type of
Contract		 Party Starting
Date		 Summary Restrictions
Supplier
Contract		 P 2017.08.22~
Contract
end date
Co-developing modules 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 companyC.		 None
MOU E 2016.11.18~
We help company E to create
more production and E shall
promisepurchasequantity.		 None
Supplier
Contract		 A 2018.1.25 Supply contract with company
A.		 None
Design
Contract		 M 2017.8.18 Co-developing products with
companyM.		 None
Manufacture
Contract		 A 2019.07.01~ Manufacturing products for
companyA.		 None
Component
Supply
Contract		 A 2019.09.12~ Manufacturing components for
company A.		 None
Supplier
Contract		 E 2020.1.1~
2021.12.31		 Manufacturing products for
companyE.		 None
Supplier
Contract		 G 2020.1.1~
2021.12.31		 Manufacturing products for
companyG.		 None
Long-term
Contract		 S 2019.2.16~
2022.2.15		 Manufacturing products for
company S.		 None
Joint Venture
Agreement		 V 2020.5.19 The Company and the affiliated
company T company invest in V
company.		 The Company and
the affiliated
company T company
shall not provide
production and
assembly services to
competitors of the
same type of V
company.
  • 76 -
Type of
Contract		 Party Starting
Date		 Summary Restrictions
Settlement
Agreement		 S 2020.7.28 Terminate our joint venture
agreement with European
investor. According to the
settlement agreement, we
obtain 100% equity of SINBON
HungaryKft.		 None
Joint Venture
Agreement		 N 2018.6.14 Company N invests in company
R, an affiliated company of ours.
Provide relevant technology
authorization and operate
company R with us		 None
  • 77 -

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. 2021
（Reviewed Only）
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Current assets 8,807,101
9,716,118
11,361,548
13,568,882
19,087,028
19,835,763
Fixed assets 1,339,108
1,486,310
1,854,001
2,154,817
2,701,729
2,677,555
Intangible assets 10,156
59,529
94,820
91,601
70,899
67,323
Other assets 160,654
310,123
177,400
353,925
323,964
414,402
Total assets 11,082,844
12,519,477
14,201,536
17,184,967
23,683,043
24,617,055
Current
liabilities		 Before
distribution		 5,045,793
5,473,028
6,981,572
8,823,257
11,793,084
11,921,438
After
distribution		 5,834,749
6,374,692
8,008,194		 10,056,977 Undistributed Undistributed
Non-Current liabilities 257,620
750,193
423,332
564,497
2,121,826
2,213,481
Total
liabilities		 Before
distribution		 5,303,413
6,223,221
7,404,904
9,387,754
13,914,910
14,134,919
After
distribution		 6,092,369
7,124,885
8,431,526
10,621,474		 Undistributed
Undistributed
Equity Attributable to
theparent company		 5,732,732
6,084,637
6,572,643
7,517,407
9,154,788
9,810,998
Capital stock 2,254,162
2,254,162
2,266,954
2,326,694
2,327,775
2,329,371
Capital surplus 858,462
830,265
904,086
1,228,781
1,885,096
1,925,154
Retained
earnings		 Before
distribution		 2,801,132
3,233,651
3,743,536
4,443,155
5,341,646
5,926,452
After
distribution		 2,012,176
2,331,987
2,716,914
3,209,435		 Undistributed Undistributed
Other Equities (181,024) (233,441)
(341,933)		 (481,223) (399,729) (369,979)
Treasury Stocks -
-
-
-
-
-
Non-controlling
interests		 46,699
211,619
223,989
279,806
613,345
671,138
Total
equity		 Before
distribution		 5,779,431
6,296,256
6,796,632
7,797,213
9,768,133
10,482,136
After
distribution		 4,990,475
5,394,592
5,770,010
6,563,493		 Undistributed Undistributed
  • 78 -

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. 20211
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Current assets 2,864,101
3,137,049
2,840,557
3,106,100
5,508,374
N.A.
Fixed assets 288,352
277,238
518,658
526,522
673,018
N.A.
Intangible assets -
-
-
-
-
N.A.
Other assets 14,748
155,386
24,773
136,430
99,479
N.A.
Total assets 8,871,822
9,807,235
10,126,114
11,221,369
15,277,067
N.A.
Current
liabilities		 Before
distribution		 2,916,389
3,014,416
3,276,402
3,402,927
4,158,829
N.A.
After
distribution		 3,705,345
3,916,080
4,303,024
4,636,647		 Undistributed
N.A.
Non-Current
liabilities		 222,701
708,182
277,069
301,035
1,963,450
N.A.
Total
liabilities		 Before
distribution		 3,139,090
3,722,598
3,553,471
3,703,962
6,122,279
N.A.
After
distribution		 3,928,046
4,624,262
4,580,093
4,937,682		 Undistributed
N.A.
Equity Attributable
to the parent
company		 5,732,732
6,084,637
6,572,643
7,517,407
9,154,788
N.A.
Capital stock 2,254,162
2,254,162
2,266,954
2,326,694
2,327,775
N.A.
Capital surplus 858,462
830,265
904,086
1,228,781
1,885,096
N.A.
Retained
earnings		 Before
distribution		 2,801,132
3,233,651
3,743,536
4,443,155
5,341,646
N.A.
After
distribution		 2,012,176
2,331,987
2,716,914
3,209,435		 Undistributed
N.A.
Other Equities (181,024)
(233,441)
(341,933)
(481,223)		 (399,729) N.A.
Treasury Stocks -
-
-
-
-
N.A.
Non-controlling
interests		 -
-
-
-
-
N.A.
Total
equity		 Before
distribution		 5,732,732
6,084,637
6,572,643
7,517,407
9,154,788
N.A.
After
distribution
 4,943,776
5,182,973
5,546,021
6,283,687		 Undistributed
N.A.

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

  • 79 -

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. 2021
（Reviewed Only）
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Operating revenue 12,925,843
13,061,439
15,645,253
17,886,170
21,797,542
5,991,553
Gross profit 3,209,102
3,280,351
3,919,945
4,589,668
5,585,997
1,561,604
Income from
operations		 1,418,204
1,393,146
1,631,689
1,892,758
2,649,177
761,838
Non-operating income
and expenses
178,840
226,398
288,379
276,405
78,689
41,431
Net income
before tax		 1,597,044
1,619,544
1,920,068
2,169,163
2,727,866
803,269
Income from
operations of
continued
segments-after tax		 1,161,735
1,224,088
1,371,529
1,677,851
2,183,500
617,285
Income or Loss from
discontinued
departments		 -
-
-
-
-
-
Net income(loss) 1,161,735 1,224,088
1,371,529
1,677,851
2,183,500
617,285
Other
comprehensive
income/loss (Net of
tax)		 (378,233)
(64,127)
25,083
(136,197)
91,276
26,628
Total other
comprehensive
income (loss), net of
tax		 783,502
1,159,961
1,396,612
1,541,654
2,274,776
643,913
Net income
attributable to
stockholders of the
parent		 1,157,386
1,226,471
1,413,477
1,718,511
2,113,868
585,999
Net income
attributable to
non-controlling
interests		 4,349
(2,383)
(41,948)
(40,660)
69,632
31,286
Comprehensive
income (loss)
attributable to
stockholders of the
parent		 779,295
1,169,058
1,441,241
1,586,951
2,213,705
614,445
Comprehensive
income (loss)
attributable to
non-controlling
interests		 4,207
(9,097)
(44,629)
(45,297)
61,071
29,468
Earnings per share 5.15
5.44
6.26
7.47
9.08
2.52
  • 80 -

Condensed Statement of Comprehensive Income (IFRS and Parent)

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-Year Financial Information Financial data of
ending date in the
current year on
31 Mar. 20211
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Operatingrevenue 4,640,558
4,812,279
5,035,927
4,899,284
5,570,753
N.A.
Grossprofit 1,131,605
1,217,761
1,285,215
1,258,919
1,350,582
N.A.
Income from
operations		 415,424
530,700
471,163
313,250
324,942
N.A.
Non-operating income
and expenses
894,290
837,031
1,174,503
1,680,569
2,121,339
N.A.
Net income
before tax		 1,309,714
1,367,731
1,645,666
1,993,819
2,446,281
N.A.
Income from
operations of
continued
segments-after tax		 1,157,386
1,226,471
1,413,477
1,718,511
2,113,868
N.A.
Income or Loss from
discontinued
departments		 -
-
-
-
-
N.A.
Net income(loss) 1,157,386 1,226,471
1,413,477
1,718,511
2,113,868
N.A.
Other
comprehensive
income/loss (Net of
tax)		 (378,091)
(57,413)
27,764
(131,560)
99,837
N.A.
Total other
comprehensive
income (loss), net of
tax		 779,295
1,169,058
1,441,241
1,586,951
2,213,705
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 5.15
5.44
6.26
7.47
9.08
N.A.

1 Parent Company’s Reports by yearly.

  • 81 -

6.2.1. Last 5 years Auditors’ Opinions:

Year Accounting Firm CPA Audit Opinion
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
2020 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. 2021
（Reviewed Only）
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Financial
structure
(%)		 Ratio of liabilities to
assets		 47.85
49.71
52.14
54.63
58.75
57.42
The ratio of long-term
capital to fixed assets		 432.88
456.18
367.01
362.22
419.57
448.91
Solvency
(%)		 Current ratio 174.54
177.53
162.74
153.79
161.85
166.39
Quick ratio 130.9
125.04
108.69
100.36
105.09
104.35
Times interest earned
ratio		 57.74
55.41
45.27
45.30
56.54
47.47
Operating
ability		 Accounts receivable
turnover(turns)		 4.14
3.81
3.83
3.73
3.45
3.19
Average collection
period		 88
95
95
98
106
114
Inventory turnover
(turns)		 4.38
3.94
3.64
3.21
2.95
2.61
Accounts payable
turnover(turns)		 4.57
4.01
4.01
4.10
3.61
3.23
Average days in sales 83
92
100
114
124
140
Fixed assets turnover
(turns)		 9.08
9.25
9.37
8.92
8.98
8.91
Total assets turnover
(turns)		 1.16
1.11
1.17
1.14
1.07
0.99
  • 82 -
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. 2021
（Reviewed Only）
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Profitability Return on total assets
(%)		 10.68
10.58
10.53
10.95
10.88
2.61
Return on stockholders'
equity (%)		 20.35
20.27
20.95
22.99
24.86
6.10
Pre-tax income to issued
capital(%)		 70.85
71.85
84.7
93.23
117.19
34.48
Profit ratio (%) 8.99
9.37
8.77
9.38
10.02
10.30
Earnings per share ($) 5.15
5.44
6.26
7.47
9.08
2.52
Cash flow Cash flow ratio (%) 24.12
14.11
4.92
19.21
4.64
1.81
Cash flow adequacy ratio
(%)
148.43
114.45
78.45
81.73
44.90
4.4
Cash reinvestment ratio
(%)		 7.49
(0.74)
(6.54)
6.95
(5.19)
1.54
Operating leverage 2.21
2.28
2.31
2.36
2.03
1.97
Leverage Financial leverage 1.02
1.02
1.03
1.03
1.02
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.
20211
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Financial
structure
(%)		 Ratio of liabilities to assets 35.38 37.96 35.09 33.01 40.07
N.A.
Ratio of long-term capital to
fixed assets		 1,988.1 2,369.28 1,267.24 1,427.75 1,591.97
N.A.
Solvency (%) Current ratio 98.21 104.07 86.7 91.28 132.45
N.A.

Quick ratio		 86.34 85.38 67.2 69.69 86.58
N.A.
Times interest earned ratio 101.23 87.31 91.84 156.5 160.36
N.A.
Operating
ability		 Accounts receivable turnover
(turns)		 4.2 4.4 4.65 4.5 4.12
N.A.
Average collection period 87 83 78 81 89
N.A.
Inventory turnover (turns) 10.34 7.76 6.16 5.3 3.29
N.A.
Accounts payable turnover
(turns)		 3.95 3.9 4.06 3.97 3.56
N.A.
Average days in sales 35 47 59 69 111
N.A.
Fixed assets turnover (turns) 16.00 17.02 12.65 9.38 9.29
N.A.
Total assets turnover (turns) 0.53 0.52 0.51 0.46 0.42
N.A.
  • 83 -
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.
20211
2016
（Audited）		 2017
（Audited）		 2018
（Audited）		 2019
（Audited）		 2020
（Audited）
Profitability Return on total assets (%) 13.23 13.27 14.33 91.28 16.05
N.A.
Return on stockholders'
equity (%)		 20.46 20.76 22.33 16.20 25.36
N.A.
Pre-tax income to issued
capital (%)		 58.1 60.68 72.59 24.39 105.09
N.A.
Profit ratio (%) 24.94 25.49 28.07 85.69 37.95
N.A.
Earnings per share ($) 5.15 5.44 6.26 35.08 9.08
N.A.
Cash flow Cash flow ratio (%) 14.83 6.06 5.53 7.47 (12.89)
N.A.
Cash flow adequacy ratio (%) 40.04 39.76 30.32 7.31 9.38
N.A.
Cash reinvestment ratio (%) (3.95) (9.30) (10.18) 28.11 (15.79)
N.A.
Operating leverage 2.41 2.09 2.45 (9.63) 3.66
N.A.
Leverage Financial leverage 1.03 1.03 1.04 3.53 1.05
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 2020 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 13 April 2021

  • 84 -

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.

Opinion

We have audited the accompanying consolidated balance sheets of SINBON Electronics Co., Ltd. and its subsidiaries (the “Group”) as of 31 December 2020 and 2019, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2020 and 2019, 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 2020 and 2019, and its consolidated financial performance and cash flows for the years ended 31 December 2020 and 2019, 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 2020 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; 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 and auditing standards generally accepted in the Republic of China, and Order No. Financial – Supervisory – Securities – Auditing - 1090360805 issued by the Financial Supervisory Commission on 25 February 2020. 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.

  • 85 -

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2020 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

1. Valuation for inventories

As of 31 December 2020, the Group’s net inventories amounted to NT$6,164,699 thousand. Net inventories accounted for 27% 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 matter.

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 realizable 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 2020, gross accounts receivable and loss allowance by the Group amounted to NT$6,371,529 thousand and NT$1,166 thousand, respectively. Net accounts receivable accounted for 27% of consolidated total assets. 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 and their respective loss rate. 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 matter.

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. Testing the 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. We also assessed the adequacy of disclosures of financial assets. Please refer to Notes 5 and 6 to the Group’s consolidate financial statements.

  • 86 -

Other Matter– Making Reference to the Audits of Component Auditors

As explained in Note 4(3), we did not audit the financial statements of certain consolidated subsidiaries, which statements reflected total assets of NT$4,479,558 thousand and NT$3,188,875 thousand, both representing 19% of consolidated total assets as of 31 December 2020 and 2019, respectively, and total operating revenues of NT$4,902,880 thousand and NT$3,966,252 thousand, both representing 22% of consolidated operating revenues for the years ended 31 December 2020 and 2019, 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. As explained in Note 6(7), these associates and joint ventures under equity method amounted to NT$715,375 thousand and NT$373,809 thousand, representing 3% and 2% of consolidated total assets as of 31 December 2020 and 2019. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$128,830 thousand and NT$83,796 thousand, representing 5% and 4% of the consolidated net income before tax for the years ended 31 December 2020 and 2019, respectively, and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$81,485 thousand and NT$29,200 thousand, representing 89% and (21)% of the consolidated other comprehensive income for the years ended 31 December 2020 and 2019, 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 <==

  • 87 -

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. 88 -

  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 2020 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 2020 and 2019.

/s/Huang, Tzu Ping

/s/ Chen, Ming Hung

Ernst & Young, Taiwan

19 March 2021

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.

  • 89 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Notes As of 31 December As of 31 December
2020 2019
Current assets
Cash and cash equivalents
Financial assets at fair value through profit or loss, current
Notes receivable, net
Accounts receivable, net
Other receivables
Current income tax assets
Inventories
Prepayments
Other current assets
Total current assets
Non-current assets
Financial assets at fair value through other comprehensive income,noncurrent
Investments accounted for under the equity method
Property, plant and equipment
Right-of-use assets
Other intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets		 4,6(1)
4,6(2)
4,6(3)
4,6(4),7
7
4,6(5)
4,6(6)
4,6(7)
4,6(8)
4,6(19)
4,6(23)
4,6(9)		 $4,450,375
252,618
1,264,482
6,370,363
196,961
26,284
6,164,699
340,261
20,985		 $3,579,189
177,788
829,969
4,092,881
137,883
23,681
4,499,437
214,565
13,489
19,087,028 13,568,882
299,065
715,375
2,701,729
353,599
70,899
131,384
323,964		 285,756
373,809
2,154,817
218,139
91,601
138,038
353,925
4,596,015 3,616,085

(continued)

$23,683,043 $17,184,967

Total assets

-90-

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS(Continued) 31 December 2020 and 2019

(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
Other payables
Current tax liabilities
Lease liabilities,current
Current portion of bonds payable
Current portion of long-term loans
Other current liabilities
Total current liabilities
Non-current liabilities
Financial liabilities at fair value through profit or loss,noncurrent
Bonds payable
Long-term loans
Deferred tax liabilities
Lease liabilities,noncurrent
Long-term deferred revenue
Net defined benefit obligation, noncurrent
Other non-current liabilities-others
Total non-current liabilities
Total liabilities
Equity attributable to the parent company
Capital
Common stock
Certificates of bond-to-stock conversion
Subtotal
Additional Paid-in Capital
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Subtotal
Other components of equity
Exchange differences on translation of foreign operations
Unrealized gains or losses measured at fair value
through other comprehensive income
Subtotal
Non-controlling interests
Total equity
Total liabilities and equity		 Notes As of 31 December As of 31 December
2020 2019
4,6(10)
4,6(11)
4,6(17)
4,6(12),7
4
4,6(19)
4,6(13)
4,6(11)
4,6(13)
4
4,6(23)
4,6(19)
4,6(14)
4,6(15)
6(16)
6(16)
4
4,6(16)		 $3,061,501
22,112
1,677,711
545,655
4,820,571
1,294,578
240,258
77,830
-
3,636
49,232		 $2,728,412
7,910
964,723
188,645
3,405,754
1,063,082
177,037
51,312
7,141
2,207
227,034
11,793,084 8,823,257
2,470
1,256,981
308,094
226,025
240,742
14,378
72,965
171		 -
-
7,956
333,862
131,633
14,612
76,432
2
2,121,826 564,497
13,914,910 9,387,754
2,327,775
-		 2,325,237
1,457
2,327,775 2,326,694
1,885,096 1,228,781
1,280,774
481,223
3,579,649		 1,108,150
341,933
2,993,072
5,341,646 4,443,155
(501,613)
101,884		 (522,918)
41,695
(399,729) (481,223)
613,345 279,806
9,768,133 7,797,213
$23,683,043 $17,184,967

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

-91-

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2020 and 2019

(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 losses
Subtotal
Operating income
Non-operating income and expenses
Other income
Other gains and losses
Finance costs
Share of profit or loss of associates and joint ventures
Subtotal
Income from continuing operations before income tax
Income tax expense
Net income
Other comprehensive income (loss)
Remeasurements of defined benefit plans
Unrealized gains on equity instruments measured at fair value
through other comprehensive income
Share of other comprehensive income (loss) of associates and joint
ventures which will not be reclassified subsequently to profit or loss
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
Share of other comprehensive income (loss) of associates and joint
ventures which may be reclassified subsequently to profit or loss
Income tax related to items that may be reclassified subsequently
Total other comprehensive income (loss), net of tax
Total comprehensive income
Net income attributable to:
Stockholders of the parent
Non-controlling interests
Comprehensive income (loss) attributable to:
Stockholders of the parent
Non-controlling interests
Earnings per share (NTD)
Earnings per share-basic
Earnings per share-diluted
Items that will not be reclassified subsequently to profit or loss		 Notes For theyears ended 31 December For theyears ended 31 December
2020 2019
4,6(17),7
6(5.20),7
6(20),7
4,6(18)
6(21)
4,6(7)
4,6(23)
6(22)
6(7)
6(7)
4,6(24)
4,6(24)		 $21,797,542
(16,211,545)		 $17,886,170
(13,296,502)
5,585,997 4,589,668
(1,178,676)
(1,074,736)
(683,312)
(96)		 (1,007,907)
(1,055,506)
(632,828)
(669)
(2,936,820) (2,696,910)
2,649,177 1,892,758
185,516
(186,541)
(49,116)
128,830		 197,286
44,292
(48,969)
83,796
78,689 276,405
2,727,866
(544,366)		 2,169,163
(491,312)
2,183,500 1,677,851
526
(11,517)
77,323
(104)
23,993
4,162
(3,107)		 9,663
15,392
35,149
(1,933)
(239,925)
-
45,457
91,276 (136,197)
$2,274,776 $1,541,654
$2,113,868
69,632		 $1,718,511
(40,660)
$2,183,500 $1,677,851
$2,213,705
61,071		 $1,586,951
(45,297)
$2,274,776 $1,541,654
$9.08 $7.47
$9.07 $7.38

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

-92-

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Equity Attributable to the Parent Company

Other changes in additional paid-in capital
Disposal of investments accounted for under the equity method
From differences between equity purchase price and carrying amount
arising from actual acquisition or disposal of subsidiaries
Net income in 2019
Other comprehensive income (loss), net of tax in 2019
Total comprehensive income (loss)
Increase in non-controlling interests
Bonds converted to stock
Other changes in additional paid-in capital
Embedded conversion options derrived from convertible
Share of changes in net assets of associates and joint ventures accounted
From differences between equity purchase price and carrying amount
arising from actual acquisition or disposal of subsidiaries
Changes in ownership interests in subsidiaries
Net income in 2020
Other comprehensive income (loss), net of tax in 2020
Total comprehensive income (loss)
Increase in non-controlling interests
Proceeds from disposal of equity instruments at fair value through
other comprehensive income of associates and joint ventures
Proceeds from disposal of equity instruments at fair value through
other comprehensive income
Bonds converted to stock
Cash dividends
Balance as of 31 December 2020
Cash dividends
Balance as of 31 December 2019
Balance as of 1 January 2020
Appropriation and distribution of 2019 retained earnings
Legal reserve
Special reserve
Balance as of 1 January 2019
Appropriation and distribution of 2018 retained earnings
Legal reserve
Special reserve		 Capital Capital Additional Paid-in
Capital		 R etained earnings etained earnings Other comp onents of equity Total Non-
Controlling
Interests		 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
Gain(losses)
$2,257,273 $9,681 $904,086
(16,444)
1,742		 $966,802
141,348		 $233,441
108,492		 $2,543,293
(141,348)
(108,492)
(1,026,622)
1,718,511
7,730		 $(333,087)
(189,831)		 $(8,846)
50,541		 $6,572,643
-
-
(1,026,622)
(16,444)
1,742
1,718,511
(131,560)		 $223,989
(40,660)
(4,637)		 $6,796,632
-
-
(1,026,622)
(16,444)
1,742
1,677,851
(136,197)
- - - - - 1,726,241 (189,831) 50,541 1,586,951 (45,297) 1,541,654
67,964 (8,224) 339,397 399,137 101,114 101,114
399,137
$2,325,237 $1,457 $1,228,781 $1,108,150 $341,933 $2,993,072 $(522,918) $41,695 $7,517,407 $279,806 $7,797,213
$2,325,237 $1,457 $1,228,781
143,735
136,974
6,457
363,080		 $1,108,150
172,624		 $341,933
139,290		 $2,993,072
(172,624)
(139,290)
(1,233,720)
2,113,868
422		 $(522,918)
21,305		 $41,695
78,110		 $7,517,407
-
-
(1,233,720)
143,735
136,974
6,457
363,080
2,113,868
99,837		 $279,806
69,632
(8,561)		 $7,797,213
-
-
(1,233,720)
143,735
136,974
6,457
363,080
2,183,500
91,276
- - - - - 2,114,290 21,305 78,110 2,213,705 61,071 2,274,776
2,538 (1,457) 6,069 1,571
16,350		 (1,571)
(16,350)		 -
-
7,150		 272,468 272,468
-
-
7,150
$2,327,775 $- $1,885,096 $1,280,774 $481,223 $3,579,649 $(501,613) $101,884 $9,154,788 $613,345 $9,768,133

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

-93-

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended 31 December 2020 and 2019

(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
Expected credit loss
Interest expense
Interest income
Dividend income
Share of profit of associates and joint ventures
Loss (Gain) on disposal of property, plant and equipment
Loss from market value decline, obsolete and
slow-moving of inventories
Expected credit loss
Gain on disposal of investments
(Gain) Loss of financial assets/liabilities at fair value through loss or profit
Amortization of deferred government grants
Changes in operating assets and liabilities:
Increase in notes receivable
(Increase) decrease in accounts receivable
(Increase) decrease in other receivables
Increase in inventories, net
(Increase) decrease in prepayments
(Increase) decrease in other current assets
Increase (decrease) in notes payable
Increase in accounts payable
Increase in contract liabilities
Increase in other payables
Increase in other current liabilities
Decrease in accrued pension liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash provided by operating activities		 For theyears ended 31 December For theyears ended 31 December
2020
$2,727,866
327,573
32,246
49,116
(12,551)
(20,688)
(128,830)
5,882
96
-
(12,836)
(355)
(434,513)
(2,303,291)
(45,852)
(1,665,380)
(126,183)
(7,575)
357,010
1,416,137
712,988
260,165
1,654
(3,467)
1,129,212
12,665
20,688
(42,555)
(572,320)
547,690		 2019
$2,169,163
281,246
52,122
48,969
(13,476)
(29,438)
(83,796)
(28,232)
669
(4,847)
6,203
(371)
(361,883)
88,394
44,407
(880,468)
31,399
3,306
(21,581)
215,130
636,318
156,312
182,003
(2,415)
2,489,134
13,476
29,438
(41,071)
(506,503)
1,984,474

(Continued)

-94-

English Translation of Consolidated Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS(Continued) For the years ended 31 December 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

For theyears ended 31 December For theyears ended 31 December
2020 2019
Cash flows from investing activities:
Net cash outflow from acquisition of subsidiaries (Note 6(25)) $ - $(24,019)
Acquisition of property, plant and equipment (658,686) (445,121)
Proceeds from disposal of property, plant and equipment 8,485 65,484
Decrease in other intangible assets 6,813 3,219
Dividends received 75,548 52,708
Acquisition of financial assets at fair value through other comprehensive income
(68,099)		 -
Proceeds from disposal of financial assets at fair value through other
comprehensive income		 28,029 -
Decrease in financial assets at fair value through other comprehensive income 3,061 6,337
Proceeds from disposal of financial assets at fair value through profit or loss 11,655 4,476
Acquisition of financial assets at fair value through profit or loss (60,069) (9,503)
Acquisition of investments accounted for under the equity method (75,395) -
Decrease in investments accounted for under the equity method - 8,400
Proceeds from disposal of financial asset for trading
Proceeds from disposal of available-for-sale financial assets
Proceeds from disposal of financial assets at fair value through
profit or loss, current
Increase in other noncurrent assets (175,345) (290,148)
Proceeds from disposal of subsidiaries (241) -
Acquisition of non-controlling interests - -
Net cash used in investing activities (904,244) (628,167)
Cash flows from financing activities:
Increase in short-term loans 333,098 848,848
Proceeds from bonds issued 1,402,864 -
Increase (decrease) in long-term loanss (including current portion) 296,191 (9,175)
Cash dividends (1,233,720) (1,026,622)
Cash payments for the principal portion of the lease liability (74,131) (66,305)
Increase (decrease) in deposits received 169 (13,428)
Increase in non-controlling interests 468,776 39,364
Net cash provided by (used in) financing activities 1,193,247 (227,318)
Effect of exchange rate changes on cash and cash equivalents 34,493 (174,821)
Net increase in cash and cash equivalents 871,186 954,168
Cash and cash equivalents at beginning of period 3,579,189 2,625,021
Cash and cash equivalents at end of period $4,450,375 $3,579,189

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

-95-

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended 31 December 2020 and 2019

(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 19 March 2021.

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 2020. Apart from the nature and impact of the new standard and amendment is described below, the remaining new standards and amendments had no material impact on the Group.

  • (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 Interest Rate Benchmark Reform - Phase 2 (Amendments
to IFRS 9,IAS 39,IFRS 7,IFRS 4 and IFRS 16)		 1 January 2021
  • 96 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (a) Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

The final phase amendments mainly relate to the effects of the interest rate benchmark reform on the companies’ financial statements:

  • A. A company will not have to derecognise or adjust the carrying amount of financial instruments for changes to contractual cash flows as required by the reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate;

  • B. A company will not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria; and

  • C. A company will be required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates.

The abovementioned amendments that are applicable for annual periods beginning on or after 1 January 2021 have no material impact on the Group.

  • (3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and 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 January2023
c Classification of Liabilities as Current or Non-current –
Amendments to IAS 1		 1 January 2023
d Narrow-scope
amendments
of
IFRS,
including
Amendments to IFRS 3, Amendments to IAS 16,
Amendments to IAS 37 and the Annual Improvements		 1 January 2022
e Disclosure Initiative - Accounting Policies – Amendments
to IAS 1		 1 January 2023
f Definition of Accounting Estimates – Amendments to IAS
8		 1 January 2023
  • 97 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (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.

(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.

  • 98 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The carrying amount of 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.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

  • (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.

  • (d) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements

  • A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

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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. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

  • C. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

  • D. Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

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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) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

  • (f) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

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.

4. Summary of significant accounting policies

(1) Statement of Compliance

The consolidated financial statements of the Group for the years ended 31 December 2020 and 2019 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (3) Basis of Consolidation

Preparation principle of consolidated financial statement

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

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

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

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

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

  • (a) the contractual arrangement with the other vote holders of the investee

  • (b) rights arising from other contractual arrangements

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

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.

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

A 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

The consolidated entities are listed as follows:

Investor Subsidiary Main businesses Percentage of ownership
(%)		 Percentage of ownership
(%)		 Note
30 September
2020		 31 December
2019
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 Kwan-Ze Corporation Ltd.
(Kwan-Ze)		 Selling a wide variety
of electronic
materials and holding
company		 100.00% 100.00%
The Company SINBON USA L.L.C.
(SINBON USA)		 Logistic center 100.00% 100.00%
The Company Beijing SINBON TongAn
Renewable Energy Co., Ltd.
(BJSB TongAn)		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 85.53% 100.00% Note1
.2
The Company SINBON Europe GmbH
(SINBON Europe)		 Logistic center 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
30 September
2020		 31 December
2019
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% 61.18%
The Company SINBON Hungary Kft
(SB Hungary )		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 100.00% 51.00% Note3
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%
T-CONN T-CONN Precision (Zhongshan)
Co., Ltd.(T-CONN Zhongshan)		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 61.18% 61.18%
T-CONN Super Progressive Ltd.
(SPL)		 Logistic center 61.18% 61.18%
BJSB TongAn Beijing SINBON Electronics Co.,
Ltd. (BJSB)		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 85.53% 100.00% Note2
BJSB TongAn ENMAGIC Renewable Energy Co.,
Ltd. (TWEM)		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 85.53% - Note4
  • 104 -

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
30 September
2020		 31 December
2019
BJSB TongAn Jiangsu ENMAGIC Energy Co., Ltd.
(JSEM)		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 85.53% 100.00% Note2
JSEM Kunshan ENMAGIC Energy Co.,
Ltd. (KSEM)		 Manufacturing and
selling a wide variety
of connectors, wires
and cables		 85.53% 100.00% Note2
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% 51.00%
SST SINBON Technologies Tennessee
L.L.C.(STT)		 Logistic Center 50.00% 50.00%
SINBON Europe SINBON Holding GmbH
(SINBON Electronic)		 Holding company - 51.00% Note3
SINBON Electronic
SINBON Germany GmbH
(ET Germany)		 Logistic center - 51.00% Note3

Note 1:On 24 September 2020, BJSB TongAn renamed Beijing SINBON TongAn Renewable Energy Co., Ltd.

Note 2:In January and December 2020, BJSB TongAn raised capital; however, the Group did not acquire shares

according to the shareholding percentage. Therefore, its ownership dropped from 100.00% to 85.53%.

Note 3:On 1 July 2020, due to the equity structure reorganization, the Group disposed of 51.00% shares of SINBON Electronic and ET Germany, acquired additional 49% shares of SB Hungary hence raising its ownership of the entity to 100% and SB Hungary is now controlled by the Company.

Note 4:On 11 February 2020, BJSB TongAn newly invested NT$10,000 thousand to establish TWEM, and the Group indirectly holds 92.86% of the voting shares as of 31 December 2020. Accordingly, TWEM 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 2020 and 2019, the related assets amounted to NT$4,479,558 thousand and NT$3,188,875 thousand. The net sales of these subsidiaries amounted to NT$4,902,880 thousand and NT$3,966,252 thousand.

  • 105 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(4) Foreign Currency Transactions

The Group’s consolidated financial statements are presented in 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.

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.

  • 106 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(5) Translation of Foreign Currency Financial Statements

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.

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

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SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

All other assets are classified as non-current.

A liability is classified as current when:

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

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

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

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

All other liabilities are classified as non-current.

  • (7) Cash 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.

  • 108 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (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

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:

  • 109 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • 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

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:

  • 110 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (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.

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.

  • 111 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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.

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.

  • 112 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • 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, 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.

(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.

  • 113 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Equity instruments

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

Compound instruments

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

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled. For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 Financial Instruments.

  • 114 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED 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:

  • 115 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED 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 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.

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.

  • 116 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED 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.

(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:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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

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

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

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

(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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Group disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures (before 1 January 2020: 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(13) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment . When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Items
Buildings
Machinery and equipment
Transportation equipment
Office equipment
Other equipment
Leasehold improvements		 Useful Lives
5～50 years
3～15 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

(14) Leases

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.

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.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 amortised 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.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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.

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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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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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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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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:

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, while the term for wind energy sales is receiving three-month term acceptance after a period of three-month from delivery due to industry characteristics. 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

(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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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.

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(22) Share-based payment transactions

The cost of equity-settled transactions between the Group and its subsidiaries is recognized based on the fair value of the equity instruments granted. The fair value of the equity instruments is determined by using an appropriate pricing model.

The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The income statement expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

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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 dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

The cost of restricted stocks issued is recognized as salary expense based on the fair value of the equity instruments on the grant date, together with a corresponding increase in other capital reserves in equity, over the vesting period. The Group recognized unearned employee salary which is a transitional contra equity account; the balance in the account will be recognized as salary expense over the passage of vesting period

(23) 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 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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

(24) 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.

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 2020: 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.

  • 134 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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.

(1) Judgement

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the consolidated financial statements:

  • 135 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

De facto control without a majority of the voting rights in investee

The Group does not have more than 50% of the voting rights and is the main shareholder in certain investees. After taking into consideration factors such as absolute size of the Group’s holding, relative size of the other shareholdings, how widely spread the remaining shareholders are, contractual arrangements between shareholders, potential voting rights, etc., the Group reached the conclusion that it has material influence but does not have de facto control over these investees. Please refer to Note 6 (7) for further details.

(2) 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.

  • 136 -

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.

  • 137 -

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
2020 2019
$13,520
4,251,855
185,000		 $24,050
3,406,670
148,469
$4,450,375
$3,579,189
  • (2) Financial assets at fair value through profit or loss
Financial assets mandatorily at fair
value through profit or loss:
Stocks
Funds
Corporate bonds
Forward exchange contracts
Total		 As of 31 December As of 31 December
2020 2019
$125,084
69,372
57,204
958		 $106,034
71,754
-
-
$252,618
$177,788

Financial assets at fair value through profit or loss were not pledged.

  • 138 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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
2020
$1,264,482
-
1,264,482
-
$1,264,482		 2019

$829,969

-

829,969

-

$829,969

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(18) 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
2020
2019
$6,371,477
$4,083,626
(1,166)
(27,176)
6,370,311
4,056,450

52
36,431
$6,370,363
$4,092,881
2020
$6,371,477
(1,166)
6,370,311

52
$6,370,363

Trade receivables were not pledged.

Trade receivables are generally on 60-120 day terms, while the term for wind energy sales is receiving three-month term acceptance after a period of three-month from delivery due to industry characteristics. The total carrying amount are NT$6,371,529 thousand and NT$4,120,057 thousand as of 31 December 2020 and 2019. Please refer to Note 6(18) for more details on loss allowance of trade receivables for the years ended 31 December 2020 and 2019. (Please refer to Note 12 for more details on credit risk management.)

  • 139 -

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
2020 2019
$2,009,697
42,058
594,959
1,662,189
1,855,796
$6,164,699		 $1,290,327
43,692
276,183
1,469,587
1,419,648
$4,499,437

The inventory cost recognized as operating costs for the years ended 31 December 2020 and 2019 were NT$16,211,545 thousand and NT$13,296,502 thousand, respectively. The price reduction of inventories related to cost of goods sold were NT$60,604 thousand and NT$6,414 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
2020
$23,328
275,737
$299,065		 2019
$18,797
266,959
$285,756

On 7 October 2020, the Group invested NT$913 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$28,029 thousand, and the cumulative disposal gain of NT$16,350 thousand was transferred from other components of equity to retained earnings.

  • 140 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

On 25 May and 1 August 2020, the Group invested NT$32,716 thousand and NT$34,470 thousand in VAN MOOF Global Holding BV. which were reported under equity instrument investments measured at fair value through other comprehensive income during the period.

The return of paid-in capital for capital reduction from Top Taiwan VII Venture Capital Co., Ltd. was NT$3,061 thousand on 27 November 2020.

On 29 April 2020, Top Taiwan II Venture Capital Co., Ltd. and Top Taiwan III Venture Capital Co., Ltd. were closed down and the return of paid-in capital following liquidation were NT$6,450 thousand and NT$5,691 thousand recorded in other receivables.

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.

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

(7) Investments accounted for using the equity method

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

method of the Group:
Investees
Investments in associates:
Listed company
Argocy Research Inc.
Unlisted companies
Top Taiwan IV Venture Capital
Co., Ltd.(Note)
Sardines Wisdom Technology
Co., Ltd.
Total		 As of 31 December
2020
Carrying
amount
Percentage
of
ownership
(%)
$715,375
20.41%
-
-
-
26.64%
$715,375		 2019
Carrying
amount
$715,375
-
-
$715,375		 Carrying
amount
$368,261
5,548
-
$373,809		 Percentage
of
ownership
(%)
21.40%
20.00%
26.64%
  • 141 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Because Sardines Wisdom Technology Co., Ltd. (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.

On 25 August 2020, Argocy Research Inc. raised capital. The Group invested additional NT$75,395 thousand; however, the Group did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 21.40% to 20.41% and recognized capital surplus in the amount of NT$136,974 thousand.

The Group has 20.41% of the voting rights in Argocy Research Inc. However, the decision-making of Argocy Research Inc. must be resolved by the majority votes of the shareholders’ meeting. Under such circumstances, the Group does not have the ability to unilaterally determine related activities of Argocy Research Inc. Therefore, it has material influence but does not have de facto control over Argocy Research Inc.

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$2,022,763 thousand and NT$1,187,680 thousand as of 31 December 2020 and 31 December 2019, respectively.

The Group’s investments in Argocy Research Inc., Top Taiwan IV Venture Capital Co., Ltd.(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:

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
2020
$128,830
81,485
$210,315		 2019
$83,796
29,200
$112,996

Note: Top Taiwan IV Venture Capital Co., Ltd. was closed down on 20 May 2020.

  • 142 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The associates had no contingent liabilities capital commitments and pledged as of 31 December 2020 and 31 December 2019.

Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT$715,375 thousand and NT$373,809 thousand as of 31 December 2020 and 2019; the related shares of investment income from the associates and joint ventures amounted to NT$128,830 thousand and NT$83,796 thousand for the years ended 31 December 2020 and 2019, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$81,485 thousand and NT$29,200 thousand for the years ended 31 December 2020 and 2019, respectively; are based solely on the reports of other independent accountants.

(8) Property, plant and equipment

Cost: Land
$155,461
16,700
-
(209)
-
$171,952
$150,429
-
79
-
(85)
5,038
$155,461		 Buildings
$1,691,163
121,804
(3,764)
1,856
395,986
$2,207,045
$1,663,172
-
4,203
(31,339)
(45,661)
100,788
$1,691,163		 Machinery
and
equipment
$1,148,782
141,634
(59,596)
(5,906)
42,660
$1,267,574
$884,857
183,762
151,445
(50,473)
(29,687)
8,878
$1,148,782		 Office
equipment
$177,345
37,055
(23,347)
(1,658)
2,250
$191,645
$136,682
22,352
24,058
(11,453)
(4,407)
10,113
$177,345		 Transportation
equipment
$29,302
3,449
(586)
99
-
$32,264
$35,039
246
7,638
(12,902)
(719)
-
$29,302		 Other
equipment
$314,996
112,628
(23,875)
2,153
145,748
$551,650
$242,223
11,635
79,470
(13,512)
(7,894)
3,074
$314,996		 Leasehold
improvements
$11,813
12,709
-
(247)
-
$24,275
$11,910
-
-
-
(97)
-
$11,813		 Construction
in progress
and
equipment
pending
examination
$192,624
212,707
-
1,519
(396,623)
$10,227
$142,426
-
178,228
-
(6,834)
(121,196)
$192,624		 Total
$3,721,486
658,686
(111,168)
(2,393)
190,021
As of 1 January 2020
Additions
Disposals
Exchange differences
Other changes
As of 31 December 2020
As of 1 January 2019
Additions through
business combinations
Additions
Disposals
Exchange differences
Other changes
As of 31 December 2019
$4,456,632
$3,266,738
217,995
445,121
(119,679)
(95,384)
6,695
$3,721,486
  • 143 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Depreciation and
impairment:		 Land
$ -
-
-
-
-
$ -
$ -
-
-
-
-
$ -
$171,952
$155,461		 Buildings
$666,266
78,378
(3,681)
4,753
-
$745,716
$621,087
-
72,744
(7,991)
(19,574)
$666,266
$1,461,329
$1,024,897		 Machinery
and
equipment
$588,006
98,641
(49,576)
(755)
21,534
$657,850
$521,689
43,278
82,756
(42,260)
(17,457)
$588,006
$609,724
$560,776		 Office
equipment
$120,165
29,861
(21,844)
(1,262)
-
$126,920
$101,389
13,964
18,932
(10,500)
(3,620)
$120,165
$64,725
$57,180		 Transportation
equipment
$16,704

3,302
(474)
77
-
$19,609
$25,698
246
3,137
(11,846)
(531)
$16,704
$12,655
$12,598		 Other
equipment
$164,422
47,125
(20,786)
1,611
-
$192,372
$133,903
3,526
42,263
(9,830)
(5,440)
$164,422
$359,278
$150,574		 Leasehold
improvements
$11,106
1,573
-
(243)
-
$12,436
$8,971
-
2,237
-
(102)
$11,106
$11,839
$707		 Construction
in progress
and
equipment
pending
examination
$ -
-
-
-
-
$ -
$ -
-
-
-
-
$ -
$10,227
$192,624		 Total
$1,566,669
258,880
(96,361)
4,181
21,534
As of 1 January 2020
Depreciation
Disposals
Exchange differences
Other changes
As of 31 December 2020
As of 1 January 2019
Additions
through
business combinations
Depreciation
Disposals
Exchange differences
As of 31 December 2019
Net carrying amount
as at:
$1,754,903
$1,412,737
61,014
222,069
(82,427)
(46,724)
$1,566,669
$2,701,729
31 December 2020
31 December 2019
$2,154,817

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

Other non-current assets

Prepayment for equipment
Long-term deferred charges
Refundable deposits
Other assets
Total		 As of31 December
2020
$160,936
65,662
50,398
46,968
$323,964		 2019
$167,734
76,296
109,141
754
$353,925

No other non-current assets were pledged.

(10) Short-term loans

Unsecured bank loans
Interest rates applied		 As of31 December
2020
2019
$3,061,501
$2,728,412
2020
2019
0.57%-3.85%
0.63%-3.25%

The Group’s unused short-term lines of credits amounted to NT$2,462,887 thousand and NT$488,942 thousand as of 31 December 2020 and 2019, respectively.

  • (11) Financial liabilities at fair value through profit or loss
Held for trading:
Derivatives not designated as
hedging Instruments
Cross currency swaps
Embedded derivative-bonds
Foreign exchange option contracts
Total
Current
Non-current
Total		 As of31 December
2020
$22,084
2,470

28
$24,582
$22,112
2,470
$24,582		 2019
$7,910
-
-
$7,910
$7,910
-
$7,910
  • 145 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(12) Other payables

her payables
Salaries payable
Commissions payable
Professional service fees payable
Dividend payable
Other payables-other
Total		 As of31 December
2020 2019
$517,581
80,056
35,091
20,527
641,323
$454,516

67,126

32,889

20,363

488,188
$1,294,578 $1,063,082

(13) Bonds payable

nds payable
Liability component
Principal amount
Discounts on bonds payable
Subtotal
Less: current portion
Net
Embedded derivative
Equity component		 As of31 December
2020 2019
$1,300,000
(43,019)
$7,200
(59)
1,256,981
-
7,141

(7,141)
$1,256,981
$-
$2,470
$-
$143,735
$211

A. Issuance of convertible bonds:

On 15 December 2020, the Company issued the seventh 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$1,300,000 thousand

Period: 15 December 2020 ~ 15 December 2023

  • 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 (16 Maech 2021) and prior to 40 days before the maturity date (5 November 2023), 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 (16 March 2021)and prior to 40 days before the maturity date (5 November 2023), 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 (15 December 2022) 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 16 March 2021 and prior to 15 December 2023 into common shares of the Company.

  • 147 -

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$203 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 liabilities of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT$2,470 thousand as at 31 December 2020.

B. 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:

  • 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.

  • 148 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • 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 2020) 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 as at 31 December 2019, respectively.

  • 149 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The convertible bonds that have already been converted were NT$500,000 thousand and NT$492,800 thousand as at 31 December 2020 and 2019, respectively.

  • (14) Long-term deferred revenue
ong-term deferred revenue
Beginning balance
Amortization
Exchange differences
Ending balance
Deferred revenue - related to assets		 For the years ended
31 December
2020
2019
$14,612
$15,505
(355)
(371)
121
(522)
$14,378
$14,612
As of 31 December
2020
2019
$14,378
$14,612
2020
$14,378

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.

  • (15) 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.

  • 150 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Pension expenses under the defined contribution plan for the years ended 31 December 2020 and 2019 were NT$51,814 thousand and NT$37,823 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.

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 2020.

  • 151 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The weighted average duration of the defined benefits obligation was 12.4 years as of 31 December 2020.

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
2020 2019
$806
813		 $1,197
948
$1,619 $2,145

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. 2020

$138,096
(65,131)
$72,965		 As of
31 Dec. 2019
 1 Jan. 2019
$138,518
(62,086)		 $144,516
(56,006)
$76,432 $88,510

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

follows:
As of 1 January 2019
Current service cost
Interest expense (income)
Subtotal
Remeasurements of the defined benefit liabilities
/assets:
Experience adjustments
Remeasurements of the defined benefit assets
Subtotal		 As of
Defined benefit
obligation
Plan assets at
fair value		 Net defined
benefit
liabilities
$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)
  • 152 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Payments of benefit obligation
Contributions by employer
As of 31 December 2019
Current period service costs
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 2020		 As of
Defined benefit
obligation
Plan assets at
fair value		 Net defined
benefit
liabilities
(1,133)
-		 1,133
(4,560)		 -
(4,560)
138,518
806
1,522		 (62,086)
-
(709)		 76,432
806
813
140,846 (62,795) 78,051

3,229
(1,963)
-		 -
-
(1,792)		 3,229
(1,963)
(1,792)
1,266 (1,792) (526)
(4,016)
-		 4,016
(4,560)		 -
(4,560)
$138,096 $65,131 $72,965

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
2020 2019
0.85%
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
2020 2019
Defined
benefit
obligation
increase		 Defined
benefit
obligation
decrease
Defined
benefit
obligation
increase		 Defined
benefit
obligation
decrease
$ -
6,830
13,739
-		 $6,339
-
-
12,101		 $ -
7,408
14,967
-		 $6,849
-
-
13,082

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping

  • 153 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

(16) Equities

  • (a) Common stock

The Company’s authorized capital was NT$4,500,000 thousand as of 31 December 2020 and 2019. The issued capital was NT$2,327,775 thousand and NT$2,325,237 thousand in a total of 232,778 thousand shares and 232,524 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 in the amount of NT$1,081 thousand in a total of 108 thousand shares from 1 January 2020 to 31 December 2020 and had completed the registration process as of 31 December 2020.

As of 1 January 2020, the accumulated book value of certificates of bond - to - stock conversion that had completed the registration process amounted to NT$1,457 thousand in a total of 146 thousand shares as of 31 March 2020.

(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
Increase (decrease) through changes in ownership
interests in subsidiaries
Premium from merger
Share options
Total		 As of 31 December
2020
$1,247,563
5,749
135,284
(11,020)
363,080
705
143,735
$1,885,096		 2019
$1,241,283
5,749
(1,690)
(17,477)
-
705
211
$1,228,781
  • 154 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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.

  • 155 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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:

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.

  • 156 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

The Company did not reverse any special reserve as a result of use, disposal or reclassification of related assets in 31 December 2020 and 2019.

Details of the 2020 and 2019 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 19 March 2021 and 12 June 2020, respectively, are as follows:


Common stock -cash dividend
Legal reserve
Special reserve (Reversal)
Total
 Appropriation of earnings Appropriation of earnings Dividendper share(NT$) Dividendper share(NT$)
2020 2019 2020 2019
$1,466,498
213,221
(81,494)		 $1,233,720
172,624
139,290		 $6.3 $5.3
$1,598,225 $1,545,634

Please refer to Note 6(20) for details on employees’ compensation and remuneration to directors and supervisors.

(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
Unrealized gains or losses measured at fair
value through other comprehensive
income
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
Changes in ownership interests in subsidiaries
Ending balance		 For the years ended
31 December
2020 2019
$279,806
69,632
3,743
(12,304)
(10,203)
(53,622)
-
335,619
674
$613,345		 $223,989
(40,660)
(4,637)
-
92
(2,102)
63,400
39,724
-
$279,806
  • 157 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(17) Operating revenue

perating revenue
Revenue from contracts with customers
Sale of goods
Other operating revenue
Total		 For the years ended
31 December
2020
$21,492,229
305,313
$21,797,542		 2019
$17,757,374
128,796
$17,886,170

Analysis of revenue from contracts with customers for the years ended 31 December 2020 and 2019 are as follows:

(1) Disaggregation of revenue

For the year ended 31 December 2020

Sale of goods
Other
operating
revenues
Total
Timing of
revenue
recognition :
At a point
in time
Over time
Total		 Renewable
Energy
Business
Unit
$5,699,627
39,208
$5,738,835
$5,738,835
-
$5,738,835
Industrial
Business
Unit
$6,292,688
106,032
$6,398,720
$6,398,720
-
$6,398,720		 Medical
Business
Unit
$1,934,681
32,599
$1,967,280
$1,967,280
-
$1,967,280		 Automotive
Business
Unit
$1,993,706
33,594
$2,027,300
$2,027,300
-
$2,027,300		 iComponent
Solution Business
Unit
$5,571,527
93,880
$5,665,407
$5,665,407
-
$5,665,407		 Total
$21,492,229
305,313
$21,797,542
$21,797,542
-
$21,797,542
  • 158 -

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 2019

Sale of goods
Other
operating
revenues
Total
Timing of
revenue
recognition :
At a point
in time
Over time
Total		 Renewable
Energy
Business
Unit
$3,934,043
1,170
$3,935,213
$3,935,213
-
$3,935,213
Industrial
Business
Unit
$5,295,767
48,894
$5,344,661
$5,344,661
-
$5,344,661		 Medical
Business
Unit
$1,730,263
15,975
$1,746,238
$1,746,238
-
$1,746,238		 Automotive
Business
Unit
$1,654,895
15,279
$1,670,174
$1,670,174
-
$1,670,174		 iComponent
Solution Business
Unit
$5,142,406
47,478
$5,189,884
$5,189,884
-
$5,189,884		 Total
$17,757,374
128,796
$17,886,170
$17,886,170
-
$17,886,170

(2) Contract balances

Contract liabilities – current

Sales of goods As of
31 Dec. 2020 31 Dec. 2019 1 Jan. 2019
$1,677,711 $964,723 $328,405

For the years ended 31 December 2020 and 2019, 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.

  • 159 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(18) Expected credit losses

Expected credit losses
Operation expense- Expected credit losses
Trade receivables		 For the years ended
31 December
2020 2019
$96 $669

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 2020 and 2019 are as follows:

31 December 2020


Gross carrying
amount

Loss ratio
Lifetime expected
credit losses
Carrying amount
 Not yet due
(Note)

$7,361,627
-%
-
$7,361,627		 Overdue >=121 days
$22,193

5%-100%
(1,166)
$21,027		 Total
<=30 days
31-60 days
 61-90 days

$168
-%
-
$168		 91-120 days

$1,220
-%
-
$1,220
$225,434
$25,369
-%
-%		 $7,636,011
-
-		 (1,166)
$225,434
$25,369		 $7,634,845

31 December 2019


Gross carrying
amount
Loss ratio
Lifetime expected
credit losses
Carrying amount
 Not yet due
(Note)

$4,648,870
-%
-
$4,648,870		 Overdue >=121 days
$57,556

30%-100%
(27,176)
$30,380		 Total
<=30 days
31-60 days
 61-90 days

$13,512
-%
-
$13,512		 91-120 days

$12,298
-%
-
$158,765
$59,025
-%
-%		 $4,950,026
-
-		 (27,176)
$158,765
$59,025		 $12,298 $4,922,850

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

  • 160 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED 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 31 December 2020 and 2019 are as follows:

As of 1 January 2020
Write off
Addition/(reversal) for the current period
Exchange difference
As of 31 December 2020
As of 1 January 2019
Write off
Addition/(reversal) for the current period
Exchange difference
As of 31 December 2019		 Note receivables
$ -
-
-
-
$-
-
-
-
-
$-		 Trade receivables
$27,176
(25,754)
96
(352)
$1,166
$27,655
(757)
669
(391)
$27,176

  • (19) Leases

  • (1) The Group is a lessee

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
2020 2019
$34,410
272,378

25,361

21,450		 $35,053
138,639
19,195
25,252
$353,599 $218,139
  • 161 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

During the years ended 31 December 2020 and 2019, the Group’s additions to right-of-use assets amounting to NT$210,007 thousand and NT$142,375 thousand.

(b) Lease liabilities

Lease liabilities
Lease liabilities
Current
Non-Current
Total		 As of 31 December
2020 2019
$77,830
240,742		 $51,312
131,633

$182,945
$318,572

Please refer to Note 6(21)(3) for the interest on lease liabilities recognized during the years ended 31 December 2020 and 2019.Refer to Note 12 (5) liquidity risk management for the maturity analysis for lease liabilities as at 31 December 2020 and 2019.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

For the years ended
31 December
2020
2019
Land
$930
$1,070
Buildings
53,351
43,893
Machinery and equipment
3,850
3,745
Transportation equipment
10,562
9,641
Other equipment
-
828
Total
$68,693
$59,177
Income and costs relating to leasing activities
For the years ended
31 December
2020
2019
The expenses relating to
short-term leases
$16,684
$23,399		 For the years ended
31 December		 For the years ended
31 December
2020 2019
$930
53,351
3,850
10,562
-		 $1,070
43,893
3,745
9,641
828
$68,693 $59,177

C. Income and costs relating to leasing activities

  • 162 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • D. Cash outflow related to lessee and lease activity

During the years ended 31 December 2020 and 2019, the Group’s total cash outflows for leases amounting to NT$90,815 thousand and NT$89,704 thousand.

  • (20) Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2020 and 2019:
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
2020 2019
Operating
costs		 Operating
expenses		 Total Operating
costs		 Operating
expenses		 Total
Employee benefits expense
Salaries $1,489,923 $1,408,267 $2,898,190 $1,262,716 $1,298,139 $2,560,855
Labor and health insurance 110,047
119,184
229,231		 132,763
142,728
275,491
Pension 19,014
34,419
53,433		 12,630
27,338
39,968
Other employee benefits
expense		 82,393
71,035
153,428		 72,001
69,209
141,210
Depreciation 195,626
131,947
327,573		 164,230
117,016
281,246
Amortization 10,499
21,747
32,246		 12,300
39,822
52,122

The number of employees for Company and its subsidiaries were 7,293 and 6,604 as of 31 December 2020 and 2019.

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.

  • 163 -

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 2020, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2020 to be 1.43% and 0.82% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2020 amount to NT$35,000 thousand and NT$20,000 thousand respectively, recognized as employee benefits expense.

A resolution was passed at the Board of Directors meeting held on 19 March 2020 to distribute NT$35,000 thousand and NT$20,000 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2020, 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 2020 are recognized in profit or loss of the subsequent year in 2021.

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. 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 2019.

(21) 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
2020
$27,894
20,688
12,551
124,383
$185,516		 2019
$49,471
29,438
13,476
104,901
$197,286
  • 164 -

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
2020
2019
Foreign exchange (losses) gains, net
$(162,248)
$36,192
Gains on disposal of investments
-
4,847
(Losses) Gains on disposal of property,
plant and equipment
(5,882)
28,232
Gains of financial asset at fair value
through profit or loss(Note1)
26,400
1,707
Losses of financial liabilities at fair value
through profit or loss(Note2)
(13,564)
(7,910)
Other expense
(31,247)
(18,776)
Total
$(186,541)
$44,292		 For theyears ended 31 December For theyears ended 31 December
2020 2019
$36,192
4,847
28,232
1,707
(7,910)
(18,776)
$(186,541) $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

Interest on loans from bank
Interest on bonds payable
Interest on lease liabilities
Total		 2020 2019
$42,249
969
5,898		 $41,469
1,769
5,731
$49,116 $48,969
  • 165 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(22) Components of other comprehensive income

For the year ended 31 December 2020:

Arising during
theperiod
Reclassification
adjustments
during the
period
Not to be reclassified to profit or loss in subsequent
periods:
Remeasurements of defined benefit plans
$526
$ -
Unrealized gains from equity instruments
investments measured at fair value through
other comprehensive income
(11,517)
-
Share of other comprehensive income (loss) of
associates and joint ventures which will not be
reclassified subsequently to profit or loss
77,323
-
To be reclassified to profit or loss in subsequent
periods:
Exchange differences resulting from translating
the financial statements of a foreign operation
23,993
-
Share of other comprehensive income (loss) of
associates and joint ventures which may be
reclassified subsequently to profit or loss
4,162
-
Total of other comprehensive income
$94,487
$ -
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 (loss) of
associates and joint ventures which will not be
reclassified subsequently to profit or loss
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)
$ -		 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
$526
(11,517)
77,323

23,993
4,162		 $ -
-
-
-
-		 $526
(11,517)
77,323
23,993
4,162		 $(104)
-
-
(3,107)
-		 $422
(11,517)
77,323
20,886
4,162
$94,487 $ - $94,487 $(3,211) $91,276
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
  • 166 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(23)Income tax

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 deferred 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
2020
$646,690
(19,333)
(15,398)
(70,994)
3,401
-
$544,366		 2019
$526,626
(62,155)
(25,202)
47,741
3,686
716
$491,312

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
2020
$3,107
104
$3,211		 2019
$(45,457)
1,933
$(43,524)
  • 167 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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

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
2020 2019
$2,727,866 $2,169,163
$545,574
(141,391)
(2,698)
272,801
6,829
(46,422)
(70,994)
(19,333)
-		 $433,833
(104,517)
3,216
229,956
5,066
(62,544)
47,741
(62,155)
716
$544,366 $491,312
  • 168 -

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 2020

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
$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		 Recognized in
profit or loss
$ -
91,492
1,378
(3,883)
4,053
(2,309)
-
16
(53)
(2,510)
-
78
(128)
(5,143)
$82,991		 Recognized in
other
comprehensive
income
$(3,107)
-
-
-
-
-
(104)
-
-
-
-
-
-
-
$(3,211)		 Disposal
$ -
20,214
-
-
-
-
-
(2,559)
-
-
-
-
-
-
$17,655		 Exchange
differences
$ -
3,818
-
-
19
-
-
-
18
-
-
-
-
(107)
$3,748		 Balance as of
31 December
$79,998
(208,340)
18,434
909
12,195
(8,838)
7,464
8,095
2,157
891
974
267
(1,172)
(7,675)
$(94,641)
$131,384
$226,025
  • 169 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

For the year ended 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)

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 2020, 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 2018
Assessed and approved up to 2018
Assessed and approved up to 2018
Assessed and approved up to 2018
  • (24) 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.

  • 171 -

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
2020
$2,113,868
232,766
$9.08
$2,113,868
8
$2,113,876
232,766
195
12
232,973
$9.07		 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

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

  • 172 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(25) Business Combinations

Acquisition of C&C

On 10 January 2019, in order to expand the production in USA, the Group invested additional NT$33,882 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
  • 173 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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)

(26) Change of Ownership of subsidiaries

Acquisition of issued shares of subsidiaries

Beijing SINBON TongAn Renewable Energy Co., Ltd. (BJSB TongAn) issued new shares in January and December 2020, however the Group did not purchase the new shares according to its shareholding percentage, consequently the ownership interest in was reduced to 85.53%.The Group received additional cash from the issuance of new shares in the amount of NT$697,637 thousand. The following table is a schedule of interest disposed of by BJSB TongAn including changes in non-controlling interests:

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
$(697,637)
335,619
$(362,018)

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:

  • 174 -

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)

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.
 Nature of relationship of the related
parties
Associate
Substantive related party

Significant transactions with related parties

(a) Sales

Associates
Others		 For the years ended
31 December		 For the years ended
31 December
2020
$164,266		 2019
$36,597

The sales price to the above related parties was determined through mutual agreement based on the market rates. The collection periods were month-end 60~120 days, while the term for wind energy sales is receiving three-month term acceptance after a period of three-month from delivery due to industry characteristics. The outstanding balance as of 31 December 2020 and 2019 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

  • 175 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(b) Purchases

Associates
Others
Other related parties
Others
Total		 For the years ended
31 December		 For the years ended
31 December
2020
$ -
30
$30		 2019
$78
124
$202

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.

(c) Accounts Receivable-Related Parties

Associates
Others		 As of 31 December As of 31 December
2020
$52		 2019
$36,431

(d) Others Payable-Related Parties

Associates
Others		 As of 31 December As of 31 December
2020
$12		 2019
$125

(e) Key management personnel compensation

Short-term employee benefits
Post-employment benefits
Total		 For the years ended
31 December		 For the years ended
31 December
2020
$246,094
53,433
$299,527		 2019
$220,314
39,968
$260,282
  • 176 -

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

  • (a) The Company provided guarantees for subsidiaries’ financing to banks for the year ended 31 December 2020. Please refer to Note 13.1(2).

  • (b) As of 31 December 2019 and 2018, the Group was issued letters of guarantee by banks in the amount of NT$6,300 thousand and NT$2,300 thousand for importing goods, respectively.

  • (c) Amounts available under unused letters of credit are as follows:

Currency
USD		 Carryingamount Carryingamount
109.12.31
$300		 108.12.31
$ -
  • (d) The Group approached the bank to provide product quality assurance commitments. As of the year ended 31 December 2020, the assurance amount was NT$4,359 thousand.

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Financial instruments

  • (1) Categories of financial instruments

  • 177 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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
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
2020
2019
$252,618
$177,788
299,065
285,756
12,268,661
8,615,872
$12,820,344
$9,079,416
As of 31 December		 2019
$177,788
285,756
8,615,872
$9,079,416
2020 2019
$3,061,501
5,366,226
1,256,981
311,730
1,294,578
318,572		 $2,728,412
3,594,399
7,141
10,163
1,063,082
182,945
11,609,588 7,586,142
24,582 7,910
$11,634,170 $7,594,052

Note:

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

  • 178 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies measures and manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, there are usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a different currency from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

  • 179 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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.

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 2020 and 2019 are as follows:

For the year ended 31 December 2020

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
+/−$23,751
+/−$61
−/+$3,391		 Sensitivity of
equity
+/−$313
+/−$21,172
-
  • 180 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

For the year ended 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
-

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 2020 and 2019 by NT$12,508 thousand and NT$10,603 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$2,333 thousand and NT$1,880 thousand on the equity attributable to the Group for the years ended 31 December 2020 and 2019, 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.

  • 181 -

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 2020 and 2019, amounts receivables from top ten customers represented 50% and 28% 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.

  • 182 -

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 December2020
Loans
Account payables
Convertible bonds
Lease liabilities
As of 31 December 2019
Loans
Account payables
Convertible bonds
Lease liabilities		 Less than 1year
$3,073,066
5,366,226
-
83,324
$2,733,189
3,594,399
7,213
57,103		 2 to 3years
$307,886
-
1,313,033
126,142
$5,651
-
-
89,364		 4 to 5years
$2,284
-
-
62,762
$2,339
-
-
50,231		 > 5years
$ -
-
-
61,748
$ -
-
-
2,866		 Total
$3,383,236
5,366,226
1,313,033
333,976
$2,741,179
3,594,399
7,213
199,564

Derivative financial liabilities

As of31 December2020
Cross Currency swaps
Net settlement - outflow
Foreign exchange option
contracts
Net settlement - outflow
As of31 December2019
Cross Currency swaps
Net settlement - outflow		 Less than 1year
$(22,084)
$(28)
Less than 1year
$(7,910)		 2 to 3years
$ -
$ -
2 to 3years
$ -		 4 to 5years
$ -
$ -
4 to 5years
$ -		 > 5years
$ -
$ -
> 5years
$ -		 Total
$(22,084)
$(28)
Total
$(7,910)

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

  • 183 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2020:

As of 1 January 2020
Cash flow
Non-cash change
Currency change
As of 31 December 2020		 Short-term
loans
$2,728,412
333,098
(9)
-
$3,061,501		 Long-term
loan(including
maturity within a
year)
$10,163
296,191
5,376
-
$311,730		 Lease
liabilities
$182,945
(74,131)
209,758
-
$318,572		 Deposits
received
$2
169
-
-
$171		 Bonds payable
(including
maturity
within ayear)
$7,141
1,402,864
(153,024)
-
$1,256,981		 Total liabilities
from financing
activities
$2,928,663
1,958,191
62,101
-
$4,948,955

Reconciliation of liabilities for the year ended 31 December 2019:

As of 1 January 2019
Cash flow
Non-cash change
Acquisition
As of 31 December 2019		 Short-term
loans
$1,804,995
848,848
-
74,569
$2,728,412		 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		 Bonds payable
(including
maturity
within ayear)
$404,554
-
(397,413)
-
$7,141		 Total liabilities
from financing
activities
$2,323,791
759,940
(249,307)
94,239
$2,928,663

(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:

  • 184 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • 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).

  • 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).

  • 185 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (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 31 December 2020 and 2019 are as follows:

Cross currency swaps, forward exchange contracts and foreign exchange option contracts

The Group entered into cross currency swaps ,currency option contracts and Foreign exchange 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 2020
Cross currency swaps
Foreign exchange option
contracts
Forward exchange
contracts
As of 31 December 2019
Cross currency swaps		 Notional Amount(in thousands)
USD
24,000
Buy USD
Sell USD
100
200
Sell USD
Sell USD
1,000
1,950
USD
17,000		 Contract Period
3 January 2020 – 18 March 2021
22 October 2020 – 22 January 2021
22 October 2020 – 22 January 2021
18 January 2020 – 25 February 2021
18 January 2020 – 26 March 2021
2 January 2019 – 13 March 2020
  • 186 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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(13) 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:

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.

  • 187 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

(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 2020

As of 31 December 2020
Financial assets:
Financial assets at fair value through profit
or loss
Funds
Stocks
Corporate bonds
Forward exchange contracts
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
Foreign exchange option contracts
Embedded derivative-bonds
As at 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
$69,372
125,084
57,204
-

23,328
$ -
-
-
Level 1
$71,754
106,034

18,797
$ -		 Level 2
$ -
-
-
958
-
$22,084
28
2,470
Level 2
$ -
-
-
$7,910		 Level 3
$ -
-
-
-
275,737
$ -
-
-
Level 3
$ -
-
266,959
$ -		 Total
$69,372
125,084
57,204
958
299,065
$22,084
28
2,470
Total
$71,754
106,034
285,756
$7,910
  • 188 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2020 and 2019, 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 2020
Total gains and losses recognized for the
year ended 31 December 2020:
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
Acquisition
The return of paid-in capital following
liquidation(Note)
Effect of currency
Ending balances as of 31 December 2020
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
$266,959

(43,163)
(3,061)
67,186
(12,141)
(43)
$275,737
$261,029

12,293
(6,337)
(26)
$266,959

Note: The return of paid-in capital following liquidation were recorded in other receivables.

  • 189 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 2020

Relationship Valuation Significant Quantitative between inputs Sensitivity of the input to techniques unobservable inputs information and fair value 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 Group’s stocks profit or loss by NT$ 27,574 thousand

As of 31 December 2019

Relationship Valuation Significant Quantitative between inputs Sensitivity of the input to techniques unobservable inputs information and fair value 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 Group’s stocks profit or loss by NT$ 26,696 thousand

  • 190 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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 2020
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))
As of 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(7))		 Level 1 Level 2 Level 3 Total
$2,022,763
Level 1		 $ -
Level 2		 $ -
Level 3		 $2,022,763
Total
$1,187,680 $ - $ - $1,187,680

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

  • 191 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Financial assets
Monetaryitems:
USD
RMB
EUR
Financial liabilities
Monetaryitems:
USD
RMB
EUR		 As of 31 December 2020
Foreign
exchange
rate
NTD
28.51
$4,167,612
4.36
4,738,373
35.06
166,791
28.51
1,761,179
4.36
2,614,998
35.06
32,228		 As of 31 December 2019 31 December 2019
Foreign
currencies
$146,191
1,086,993
4,758
61,778
599,886
919		 Foreign
exchange
rate
28.51
4.36
35.06
28.51
4.36
35.06		 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		 NTD
$3,679,682
2,824,878
142,927
2,449,527
1,539,264
30,630

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 recognized NT$(162,248) thousand and NT$36,192 thousand foreign exchange (loss) gain for the years ended 31 December 2019 and 2020, 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 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.

  • 192 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (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:

As of 31 December 2019

As of 31 December 2019
Counterparty
BOCOM Beijing Development Zone Branch
ICBC Anqing Tongcheng Branch
Branch Wuxi Jiangyin China Merchants Bank
HSBC Bank (China) Shanghai Company Limited
BOCOM Anqing Tongcheng Branch
Bank of Ningbo Wuxi Branch		 Amount to be
transferred
$465,273
95,335
51,257
44,681
18,481
18,112		 Amount have been
advanced（Note）
$465,273
95,335
51,257
44,681
18,481
18,112

As of 31 December 2019

As of 31 December 2019
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

13. Other disclosure

(1) Information at significant transactions

  • (a) Financing provided to others for the year ended 31 December 2020: Please refer to Attachment 1.

  • 193 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (b) Endorsement/Guarantee provided to others for the year ended 31 December 2020: Please refer to Attachment 2.

  • (c) Securities held as of 31 December 2020: 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 2020: 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 2020: 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 2020: 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 2020: 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 2020: 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.

  • (2) Information on investees:

Names, locations, main businesses and products, original investment amount, investment as of 31 December 2020, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2020: Please refer to Attachment 7.

  • 194 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

  • (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.

  • (4) Information of major shareholders

As of 31 December 2020

Shares
Main shareholder		 Number of
shares		 Percentage of
ownership (%)
Fubon Life Insurance Co.,Ltd. 13,500,167 5.79%

Note ：

  • 1.The main shareholder information in the table is calculated by the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter. The information included the total number of ordinary shares and special shares held by the shareholders who have completed the delivery without physical registration (including treasury shares) that reached 5%. The share capital stated in the Company's financial report and the number of shares actually delivered by the Company without physical registration may differ because the calculation bases were different.

  • If the above information included the shareholder's shares transferred to the trust, it will be disclosed by the trustee who opened the trust account individually. As for shareholders who declared insider equity holding for more than 10% in accordance with the Securities Exchange Act, such shareholdings shall include their shareholdings plus their shares that have been delivered to the trust and shares of the trust that they have control of. Please refer to the information on insider equity declaration in the “Market Observation Post System” on the website of the TWSE

  • 195 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

14. Segment information

  • (1) For management purposes, the Group is organized into business units based on their products and services and has three reportable operating segments as follows:

  • (a) New Energy Business Unit: The segment focuses on the development, manufacturing and sales of cable assembly and control modules for green energy industries such as solar photovoltaic, wind power and offshore wind power.

  • (b) Industrial Application Business Unit: The segment focuses on the development, manufacturing and sales of industrial application products such as robot arm control cable assemblies, control cabinet cable assemblies and panel connection cables.

  • (c) Medical Health Business Unit: This segment is responsible for the development, manufacture and sale of medical equipment cables such as electrocardiographs, oximeters and X-ray wiring harnesses.

  • (d) Automotive Business Unit: The segment focuses on the development, manufacturing and sales of electric vehicle charging guns and charging piles, automotive oxygen sensors and parking-related equipment cables.

  • (e) iComponent Solution Business Unit: The segment focuses on the development, manufacturing and sales of communication related cables such as smart phones, smart wearable devices and VR /AR HMD devices.

Operating segments have been aggregated to be reported as aforementioned operating segments.

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.

  • 196 -

SINBON ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

Information on profit or loss, assets and liabilities of the reportable segment for the year ended 31 December 2020 and 2019 were as of :

For the year ended 31 December 2020

Renewabl

Revenue

External customer Inter-segment Total revenue

Segment profit

Renewabl
e
Energy
Business
Unit
$5,738,835
16,765
$5,755,600
$736,322		 Industrial
Business
Unit
$6,398,720
1,904,123
$8,302,843
$1,064,678		 Medical
Business
Unit
$1,967,280
585,421
$2,552,701
$336,951		 Automotiv
e
Business
Unit
$2,027,300
603,281
$2,630,581
$197,689		 iComponent
Solution
Business Unit
$5,665,407
1,685,904		 Reconciliation
and Eliminated
(Note)
$ -
(4,795,494)
$(4,795,494)
$ -		 Total
$21,797,542
-
$7,351,311 $21,797,542
$392,226 $2,727,866

Note: Inter-segment revenues were eliminated when consolidated.

For the year ended 31 December 2019

Renewabl

e

Revenue External customer Inter-segment Total revenue Segment profit

Renewabl
e
Energy
Business
Unit
$3,935,213
14,144
$3,949,357
$611,162		 Industrial
Business
Unit
$5,344,661
1,622,135
$6,966,796
$596,876		 Medical
Business
Unit
$1,746,238
529,993
$2,276,231
$195,015		 Automotive
Business
Unit
$1,670,174
506,907
$2,177,081
$186,520		 iComponent
Solution
Business Unit
$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
$2,169,163

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 2020 and 2019:

Segment assets:

31 December 2020 31 December 2019

Renewable
Energy
Business
Unit
$5,659,129
$3,401,270		 Industrial
Business
Unit
$11,544,321
$8,485,345		 Medical
Business
Unit
$3,549,290
$2,772,381		 Automotive
Business
Unit
$3,657,574
$2,651,618		 iComponent
Solution
Business Unit
$10,221,304
$8,239,615		 Reconciliation
and Eliminated
(Note)
$(10,948,575)
$(8,365,262)		 Total
$23,683,043
$17,184,967

Segment liabilities:

31 December 2020

31 December 2019

Renewable
Energy
Business
Unit
$3,334,093
$1,748,314		 Industrial
Business
Unit
$5,288,722
$3,428,509		 Medical
Business
Unit
$1,626,013
$1,120,182		 Automotive
Business
Unit
$1,675,620
$1,071,388		 iComponent
Solution
Business Unit
$4,682,617
$3,329,221		 Reconciliation
and Eliminated
(Note)
$(2,692,155)
$(1,309,860)		 Total
$13,914,910
$9,387,754

(2) 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
2020 2019
$12,507,187
3,750,432
1,317,872
4,222,051
$10,105,185

3,344,293

1,028,200

3,408,492
$21,797,542
$17,886,170

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
2020 2019
$2,306,281
2,174,450
74,400
40,884
$1,859,210

1,629,786

60,804

66,285
$4,596,015
$3,616,085
  • (3) 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 2020 and 2019.

  • 199 -

Attachment 1: Financing provided to others for the year ended 31 December 2020

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		 SB Hungary Other
receivables		 Y $105,341 $105,169 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $915,479 $3,661,915
1 BJSB BJSB Tongan Other
receivables		 Y $43,788 $43,592 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $93,459 $93,459
2 JYSB TCSB Other
receivables		 Y $70,937 $70,619 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $329,771 $1,319,084
3 KSEM JSEM Other
receivables		 Y $5,254 $5,231 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $5,541 $5,541
1 BJSB JSEM Other
receivables		 Y $43,592 $43,592 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $93,459 $93,459

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 10% of the lender's net worth of the financial which were reviewed by independent accountants as of 31 December 2020.

The Company: $9,154,788*10%=$915,479

JYSB: $3,297,711*10%=$329,771

Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial which were reviewed by independent accountants as of 31 December 2020.

BJSB: $233,648*40%=$93,459

KSEM ： $13,853*40%=$5,541

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 2020.

The Company: $9,154,788*40%=$3,661,915

JYSB ： $3,297,711*40%=$1,319,084

BJSB: $233,648*40%=$93,459

KSEM ： $13,853*40%=$5,541

Note 4: For short-term financing.

-200-

Attachment 2: Endorsement/Guarantee provided to others as of 31 December 2020

(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 Releationshi
p
(Note 2)
0 The Company SINBON USA 2 $3,661,915 $15,127 $14,254 $8,552 none 0.16% $9,154,788 Y N N
0 The Company SZSB 2 $3,661,915 $15,165 $14,254 $ - none 0.16% $9,154,788 Y N Y
0 The Company SHSB 2 $3,661,915 $45,495 $42,762 $ - none 0.47% $9,154,788 Y N Y
0 The Company TCSB 2 $3,661,915 $404,229 $270,826 $95,902 none 2.96% $9,154,788 Y N Y
0 The Company JYSB 2 $3,661,915 $409,455 $384,858 $156,931 none 4.20% $9,154,788 Y N Y
0 The Company JSEM 2 $3,661,915 $379,125 $ - $ - none 0.00% $9,154,788 Y N Y
0 The Company BJSB TongAn 2 $3,661,915 $619,921 $ - $ - none 0.00% $9,154,788 Y N Y
0 The Company T-CONN 2 $2,746,436 $75,825 $ - $ - none 0.00% $9,154,788 Y N N
0 The Company T-CONN Zhongshan 2 $3,661,915 $318,465 $ - $ - none 0.00% $9,154,788 Y N Y
0 The Company Radbon 2 $2,746,436 $150,000 $150,000 $125,000 none 1.64% $9,154,788 Y N N
0 The Company C&C 2 $3,661,915 $272,970 $256,572 $128,286 none 2.80% $9,154,788 Y N N
0 The Company SB Hungary 2 $3,661,915 $322,435 $311,273 $300,432 none 3.40% $9,154,788 Y N N
1 T-CONN T-CONN Zhongshan 2 $211,426 $192,313 $99,778 $ - none 18.88% $528,565 N N Y

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

  • The Company is coded "0".

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

  • Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:

  • A company with which it does business.

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

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

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

  • 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.

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

  • 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 overseas subsidiary is 40% of the net worth of the financial report audited by the certified public accountants as of 31 December 2020. $9,154,788*40%=$3,661,915

  • Limit of guarantee/endorsement amount for domestic subsidiaries is 30% of the net worth of the financial report of the company reviewed by the certified public accountants as of 31 December 2020. $9,154,788*30%=$2,746,436

  • Limit of guarantee/endorsement amount for T-CONN Zhongshan is 40% of the net worth of the financial of T-CONN which were not reviewed by the certified public accountants as of 31 December 2020. $528,565*40%=$211,426

  • 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 2020.

  • 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 2020. (Excluding subsidiaries, associates and joint ventures)

Holding
Company		 Type and name of securities Relationship
(Note 1)		 Financial statement account as of 31 December 2020 as of 31 December 2020 as of 31 December 2020 as of 31 December 2020 as of 31 December 2020 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 $117,519 11.10% $117,519 -
The Company Top Taiwan Venture Capital Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 6,000,000 shares 57,764 7.50% 57,764 -
The Company Dynahz Technologies - Financial assets measured at fair value through other
comprehensive income- noncurrent		 2,771,670 shares 35,850 16.67% 35,850 -
Kwan-Ze Chengding Venture Capital Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 5,000,000 shares 39,138 3.70% 39,138 -
The Company Gongwin Biopharm Holdings Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 96,000 shares 23,328 0.25% 23,328 -
The Company Top Taiwan VII Venture Capital Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 1,132,653 shares 13,785 2.40% 13,785 -
Kwan-Ze Actmax Technologies Inc. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 - 5,018 19.00% 5,018 -
The Company VAN MOOF Global Holding BV - Financial assets measured at fair value through other
comprehensive income- noncurrent		 780,000 shares 2,778 0.50% 2,778 -
T-CONN VAN MOOF Global Holding BV - Financial assets measured at fair value through other
comprehensive income- noncurrent		 780,000 shares 2,778 0.50% 2,778 -
SINBON USA
L.L.C		 HOTWIRE Development LLC - Financial assets measured at fair value through other
comprehensive income- noncurrent		 697,500 shares 886 5.00% 886 -
The Company Japan SINBON Electronics Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 75 shares (111) 15.00% (111) -
The Company Bandrich, Inc. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 330,000 shares 332 1.62% 332 -
The Company Nextronics Engineering Corp. - Financial asset measured at fair value through profit or
loss–current		 3,009,000 shares 123,821 9.86% 123,821 -
The Company Cayman Lan-Cheng Fund - Financial asset measured at fair value through profit or
loss–current		 30,000 shares 69,372 17.14% 69,372 -
The Company Nextronics Engineering Corp.
Privateplacement unsecured conversion bonds		 - Financial asset measured at fair value through profit or
loss–current		 600,000 shares 57,204 - 57,204 -
The Company Trutankless, Inc. - Financial asset measured at fair value through profit or
loss–current		 200,000 shares 1,140 0.26% 1,140 -
Kwan-Ze Nextronics Engineering Corp. - Financial asset measured at fair value through profit or
loss–current		 3,000 shares 123 0.01% 123 -
Total $550,725

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

Note 2: The financial assets do not have quoted prices in an active market and their fair value cannot be reliably measured

Note 2: Financial assets do not have quoted prices in an active market and their fair value cannot be reliably measured

-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 2020.

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 $1,641,726 25.49% Trading condition is the same
as other supplier		 N/A N/A $(424,291) -29.64%
HKSB JYSB Associates Purchase $1,512,354 47.50% Trading condition is the same
as other supplier		 N/A N/A $(170,748) -22.95%
JYSB The Company Subsidiary Purchase $174,297 3.34% Trading condition is the same
as other supplier		 N/A N/A $(38,347) -2.18%
SZSB HKSB Associates Purchase $249,809 82.54% Trading condition is the same
as other supplier		 N/A N/A $(60,656) -92.81%
T-CONN T-CONN Zhongshan Associates Purchase $394,150 54.00% Trading condition is the same
as other supplier		 N/A N/A $(61,051) -19.00%
BJSB TongAn JSEM Associates Purchase $388,470 17.45% Trading condition is the same
as other supplier		 N/A N/A $(69,443) -8.81%
JSEM JYSB Associates Purchase $173,649 9.48% Trading condition is the same
as other supplier		 N/A N/A $(199,521) -14.92%
JYSB SINBON USA Associates Purchase $179,445 3.44% Trading condition is the same
as other supplier		 N/A N/A $(9,164) -0.52%
JYSB HKSB Associates Purchase $188,499 3.61% Trading condition is the same
as other supplier		 N/A N/A $(55,486) -3.16%
JSEM BJSB TongAn Associates Purchase $242,144 13.23% Trading condition is the same
as other supplier		 N/A N/A $(278,221) -20.80%

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 2020.

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 $424,291 9.26 $ - - $40,954 $ -
JYSB HKSB Associates $170,748 14.12 $ - - $63,087 $ -
JYSB JSEM Associates $199,521 0.82 $ - - $14,568 $ -
BJSB TongAn JSEM Associates $278,221 0.80 $ - - $12,850 $ -
The Company T-CONN Associates $592,343 1.69 $ - - $24,881 $ -

-203-

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 $1,641,726 (Note 4) 7.53%
1 JYSB The Company 2 Sales $1,641,726 (Note 4) 7.53%
2 HKSB JYSB 3 Purchase $1,512,354 (Note 4) 6.94%
1 JYSB HKSB 3 Sales $1,512,354 (Note 4) 6.94%
1 JYSB The Company 2 Purchase $174,297 (Note 4) 0.80%
0 The Company JYSB 1 Sales $174,297 (Note 4) 0.80%
4 SZSB HKSB 3 Purchase $249,809 (Note 4) 1.15%
2 HKSB SZSB 3 Sales $249,809 (Note 4) 1.15%
3 T-CONN T-CONN Zhongshan 3 Purchase $394,150 (Note 4) 1.81%
5 T-CONN Zhongshan T-CONN 3 Sales $394,150 (Note 4) 1.81%
6 BJSB TongAn JSEM 3 Purchase $388,470 (Note 4) 1.78%
7 JSEM BJSB TongAn 3 Sales $388,470 (Note 4) 1.78%
7 JSEM JYSB 3 Purchase $173,649 (Note 4) 0.80%
1 JYSB JSEM 3 Sales $173,649 (Note 4) 0.80%
1 JYSB SINBON USA 3 Purchase $179,445 (Note 4) 0.82%
8 SINBON USA JYSB 3 Sales $179,445 (Note 4) 0.82%
1 JYSB HKSB 3 Purchase $188,499 (Note 4) 0.86%
2 HKSB JYSB 3 Sales $188,499 (Note 4) 0.86%
7 JSEM BJSB TongAn 3 Purchase $242,144 (Note 4) 1.11%
6 BJSB TongAn JSEM 3 Sales $242,144 (Note 4) 1.11%

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.

-204-

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2020 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2020: (Excluding investment in Mainland China)

Investor Investee company
(Note1)		 Address Main businesses and products Initial Investment Initial Investment Investment as of 31 December 2020 Investment as of 31 December 2020 Investment as of 31 December 2020 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% $808,212 $584,818 $584,818 Subsidiary
The Company Kwan-Ze New Taipei City, Taiwan Holding company $235,600 $235,600 25,200,000 shares 100.00% $642,709 $108,131 $108,131 Subsidiary
The Company Top Taiwan IV
Venture Capital Co.,
Ltd		 Taipei City, Taiwan Holding company $ - $22,400 - - $ - $117 $23 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% $4,256,603 $667,597 $667,597 Subsidiary
The Company Argosy Technologies
Co., Ltd.		 Hsinchu City,
Taiwan		 Produce and sells a variety of electronic
components, computers and peripheral
equipment		 $51,768 $30,648 3,174,598 shares 3.52% $129,014 $611,709 $21,807 Investee under the
equity method
The Company SINBON
USA
LLC		 4265 Gibson Dr., Tipp City , OH 45371,
USA		 Logistic center. USD5,159,000
$161,943		 USD5,159,000
$161,943		 - 100.00% $47,766 $(32,716) $(32,716) Subsidiary
The Company SINBON Europe
GmbH		 Pfarrkirchen, Germany Logistic center. EUR5,209,000
$185,241		 EUR5,209,000
$185,241		 - 100.00% $1,379 $(35,175) $(35,175) Subsidiary
The Company Radbon Avionics Inc. Miaoli County, Taiwan Manufacturing and selling signal cables
and cabin wiring.		 $33,000 $33,000 3,630,000 shares 55.00% $55,847 $33,868 $18,629 Subsidiary
The Company T-CONN Precision New Taipei City, Taiwan Manufacturing and selling a wide variety
of connectors, wires and cables.		 $166,066 $166,066 17,135,277 shares 61.18% $320,970 $177,188 $107,384 Subsidiary
The Company SB Hungary Hungary Selling,Producting and Processing a wide
variety of connectors and cables.		 EUR11,364,000
$394,296		 EUR1,080,000
$38,364		 - 100.00% $162,747 $(69,718) $(25,813) Subsidiary
T-CONN Precision S P L Mauritius Logistic center. $3,039 $3,039 - 100.00% $�9,190 USD(149,000)
$(4,408)		 $(4,363) Subsidiary
BJSB Tongan TWEM 1F., No. 15, Ln. 588, Guohua Rd., Miaoli
City, Miaoli County 36055, Taiwan
(R.O.C.)		 Produce and sells a wide variety of
connectors and cables.		 RMB2,308,000
$10,000		 $ - - 100.00% RMB1,462,000
$6,374		 RMB(846,000)
$3,627		 $ - Subsidiary
SINBON USA LLC SINBON Circuits &
Cables LLC		 815 South Brown School Road Vandalia,
OH 45377, USA		 Selling a wide variety of connectors and
cables.		 USD2,704,000 USD2,704,000 - 51.00% USD966,000
$27,543		 USD(1,435,000)
$(42,447)		 $ - Subsidiary
SINBON USA
L.L.C		 Worldwide
Wire Harnesses
Co.,Ltd.		 Samoa Logistic center. USD75,000 USD75,000 - 50.00% USD(32,000)
$(907)		 USD(114,000)
$(3,376)		 $ - Subsidiary

-205-

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2020 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2020: (Excluding investment in Mainland China)

Investor Investee company
(Note1)		 Address Main businesses and products Initial Investment Initial Investment Investment as of 31 December 2020 Investment as of 31 December 2020 Investment as of 31 December 2020 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 )
Kwan-Ze Argocy Research Inc. Hsinchu City,
Taiwan		 Produce and sells a variety of electronic
components, computers and peripheral
equipment		 $201,451 $147,175 15,214,152 shares 16.89% $586,361 $611,709 $ - Investee under the
equity method
Worldwide
Wire Harnesses
Co., Ltd.		 STT U.S.A Tennessee Logistic center. USD140,000
$4,542		 USD140,000
$4,542		 - 100.00% USD(314,000)
$(8,943)		 USD(114,000)
$(3,376)		 $ - 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% $16,442 $5 $ - Investee under the
equitymethod
Argocy Research
Inc.		 Ari International
(Singapore)Pte.,Ltd.
(AIS)		 Singapore Holding company $32,697 $32,697 - 100.00% $2,621 $(313) $ - Investee under the
equity method
Argocy Research
Inc.		 Global Saber
Electronics Co., Ltd.		 Mauritius Selling a wide variety of connectors and
cables.		 $ - $ - - 100.00% $107,403 $33,980 $ - Investee under the
equity method
Argocy Research
Inc.		 ROTEC LIMITED British Virgin Islands Holding company $268,479 $268,479 8,550 shares 77.38% $505,642 $46,994 $ - 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% $147,811 $46,994 $ - Investee under the
equity method
SINBON Europe
GmbH		 SINBON Electronic Germany Holding company $ - EUR5,184,000
$181,113		 - - $ - EUR(1,013,000)
$(33,507)		 $ - -
SINBON Electronic ET Germany Germany Logistic center. $ - EUR1,245,000
$44,225		 - - $ - EUR(558,000)
$(18,455)		 $ - -

Note 1: （ 1 ） "Investee company", "Address", "Main businesses and products", "Initial Investment" and "Investment as of 31 December 2020" shall be filled in appropriate fields according to the Company's reinvestment and the re-investment of the subsidiaries the Company directly or indirectly controls 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 nine-month period ended 31 December 2020.

  • （ 3 ） "Investment income (loss) recognized" requires only the investment income (loss) from the direct investees of the the Company and the investment income (loss) from investees valued under the equity method, and ensure that when recognizing the subsidiary's investment income (loss), the subsidiaries' re-investment income (loss) is included.

-206-

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 2020		 Investment Flows Investment Flows Accumulated Outflow
of Investment from
Taiwan as of
31 December 2020		 Net income (loss)
of investee
company		 Percentage of
Ownership		 Investment income
(loss) recognized		 Carrying Value as of
31 December 2020		 Accumulated Inward
Remittance of
Earnings
as of
31 December 2020
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		 RMB1,041,000
$4,464		 85.53% RMB890,000
$3,818
Note 1		 RMB53,599,000
$233,646		 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		 USD19,645,000
$581,167		 100% USD19,645,000
$581,167
Note 1		 USD115,677,000
$3,297,711		 USD32,323,000
$989,011
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		 USD360,000
$10,644		 100% USD360,000
$10,644
Note 1		 USD5,553,000
$158,313		 USD2,887,000
$87,821
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		 USD545,000
$16,136		 100% USD545,000
$16,136
Note 1		 USD9,458,000
$269,629		 RMB26,100,000
$116,078
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		 USD2,139,000
$63,266		 100% USD2,139,000
$63,266
Note 1		 USD21,604,000
$615,884		 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% $ - $ - $ -
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% $ - $ - $ -
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		 $ - - $ - $ - $ -

-207-

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 2020		 Investment Flows Investment Flows Accumulated Outflow
of Investment from
Taiwan as of
31 December 2020		 Net income (loss)
of investee
company		 Percentage of
Ownership		 Investment income
(loss) recognized		 Carrying Value as of
31 December 2020		 Accumulated Inward
Remittance of
Earnings
as of
31 December 2020
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.		 USD 8,700,000 Indirectly investment in
Mainland China through
companies registered in a third
region.		 USD 3,686,000
$117,529		 $ - $ - USD 3,686,000
$117,529		 $55,528 61.18% $34,250
Note 2		 $145,792 $ -
BJSB TongAn Manufacturing and selling a
wide variety of connectors,
wires and cables.		 RMB152,000,000 Indirectly investment in
Mainland China through
remittance from a third region.		 USD 3,000,000
$89,134		 $ - $ - USD 3,000,000
$89,134		 $631,889 85.53% $584,688
Note 1		 $1,988,100 USD21,105,000
$637,809
USD 52,087,000
USD 53,420,000
N/A(Note3)
Accumulated Investment in Mainland China as of
31 December 2020
Investment Amounts Authorized by
Investment Commission, MOEA
Upper Limit on Investment
Accumulated Investment in Mainland China as of
31 December 2020		 Investment Amounts Authorized by
Investment Commission, MOEA		 Upper Limit on Investment
USD 52,087,000 USD 53,420,000 N/A(Note3)

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

Note 2: The financial statements were audited by other independent accountants.

Note 3: According to Order No. Jing-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.

-208-

6.5. Parent Company Only Financial Statements for the Years Ended December 31, 2020 and 2019 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 2020 and 2019, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2020 and 2019, 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 2020 and 2019, and its financial performance and cash flows for the years ended 31 December 2020 and 2019, 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 2020 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; 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-Supervisory-Securities -Auditing-1090360805 issued by the Financial Supervisory Commission on 25 February 2020, 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 2020 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 matter.

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 realizable 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 2020, gross accounts receivable and loss allowance by the Company amounted to NT$1,595,767 thousand and NT$1,166 thousand, respectively. Net accounts receivable accounted for 10% of total assets. 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 and their respective loss rate. 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 matter.

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

As explained in Note 6(6), we did not audit the financial statements of certain subsidiaries, associates and joint ventures accounted for under the equity method. 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$1,872,100 thousand and NT$1,332,652 thousand, both representing 12% of the total assets as of 31 December 2020 and 2019, respectively. The related shares of profits from the subsidiaries, associates and joint ventures under the equity method amounted to NT$799,383 thousand and NT$509,650 thousand, representing 33% and 26% of the income before tax for the years ended 31 December 2020 and 2019, respectively, and the related shares of other comprehensive income (loss) from the subsidiaries, associates and joint ventures under the equity method amounted to NT$63,134 thousand and NT$27,268 thousand, representing 63% and (21)% of the comprehensive income (loss) for the years ended 31 December 2020 and 2019, 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 2020 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

19 March 2021

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 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Notes As of 31 December As of 31 December
2020 2019
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)		 $1,188,125
251,537
8,653
959,819
634,782
593,893
1,766,177
105,388		 $984,384
165,790
10,225
1,018,539
36,591
113,459
734,705
42,407
5,508,374 3,106,100
251,245
8,413,347
673,018
207,289
124,315
99,479		 242,104
7,021,825
526,522
62,346
126,042
136,430
9,768,693 8,115,269

(continued)

$15,277,067

$11,221,369

Total assets

-214-

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2020 and 2019

(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
Financial liabilities at fair value through profit or loss-noncurrent
Bonds payable
Long-term loans
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
2020 2019
4,6(9)
4,6(10)
4,6(14)
7
7
4
4,6(16)
4,6(11)
4,6(10)
4,6(11)
4,6(20)
4,6(16)
4,6(12)
6(13)
6(13)
4		 $1,458,588
22,112
581,495
391
965,448
455,087
459,751
154,380
38,549
-
23,028		 $1,741,166
7,910
144,118
2,013
620,100
304,538
379,318
146,943
18,673
7,141
31,007
4,158,829 3,402,927
2,470
1,256,981
300,000
161,976
169,056
72,965
2		 -
-
-
180,858
43,743
76,432
2
1,963,450 301,035
6,122,279 3,703,962
2,327,775
-		 2,325,237
1,457
2,327,775 2,326,694
1,885,096 1,228,781
1,280,774
481,223
3,579,649		 1,108,150
341,933
2,993,072
5,341,646 4,443,155
(501,613)
101,884		 (522,918)
41,695
(399,729) (481,223)
9,154,788 7,517,407
$15,277,067 $11,221,369

(The accompanying notes are an integral part of the parent company only financial statements)

-215-

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 2020 and 2019

(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
Share of other comprehensive income (loss) of subsidiaries, associates
and joint ventures which will not be reclassified subsequently to profit or loss
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
Share of other comprehensive income (loss) of subsidiaries, associates
and joint ventures which may be reclassified subsequently to profit or loss
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 will not be reclassified subsequently to profit or loss		 Notes For theyears ended 31 December For theyears ended 31 December
2020 2019
4,6(14),7
6(4.18),7
6(18),7
6(15)
6(18),7
4,6(6)
4,6(20)
6(19)
4,6(21)		 $5,570,753
(4,220,171)		 $4,899,284
(3,640,365)
1,350,582 1,258,919
(405,564)
(412,450)
(207,626)
-		 (355,630)
(398,010)
(192,029)
-
(1,025,640) (945,669)
324,942 313,250
159,284
(21,966)
(15,351)
1,999,372		 137,386
14,103
(12,822)
1,541,902
2,121,339 1,680,569
2,446,281
(332,413)		 1,993,819
(275,308)
2,113,868 1,718,511
526
18,743
59,367
(104)
19,213
5,199
(3,107)		 9,663
12,992
37,549
(1,933)
(227,407)
(7,881)
45,457
99,837 (131,560)
$2,213,705 $1,586,951
$9.08 $7.47
$9.07 $7.38

(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 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

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
Other changes in additional paid-in capital
Embedded conversion options derrived from convertible
Share of changes in net assets of associates and joint ventures accounted
for using the equity method
From differences between equity purchase price and carrying amount
arising from actual acquisition or disposal of subsidiaries
Changes in ownership interests in subsidiaries
Net income in 2020
Other comprehensive income (loss), net of tax in 2020
Total comprehensive income (loss)
Proceeds from disposal of equity instruments at fair value through
other comprehensive income of associates and joint ventures
Proceeds from disposal of equity instruments at fair value through
other comprehensive income
Bonds converted to stock
Balance as of 1 January 2019
Balance as of 31 December 2019
Balance as of 1 January 2020
Balance as of 31 December 2020
Appropriation and distribution of 2018 retained earnings
Legal reserve
Special reserve
Cash dividends
Appropriation and distribution of 2019 retained earnings
Legal reserve
Special reserve
Cash dividends		 Capital Capital Additional
Paid-in
Capital		 Retained earnings Retained earnings Other components of equity Other 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
$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
$2,325,237 $1,457 $1,228,781
143,735
136,974
6,457
363,080		 $1,108,150
172,624		 $341,933
139,290		 $2,993,072
(172,624)
(139,290)
(1,233,720)
2,113,868
422		 $(522,918)
21,305		 $41,695
78,110		 $7,517,407
-
-
(1,233,720)
143,735
136,974
6,457
363,080
2,113,868
99,837
- - - - - 2,114,290 21,305 78,110 2,213,705
2,538 (1,457) 6,069 1,571
16,350		 (1,571)
(16,350)		 -
-
7,150
$2,327,775 $- $1,885,096 $1,280,774 $481,223 $3,579,649 $(501,613) $101,884 $9,154,788

(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 2020 and 2019

(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
Share of profit of subsidiaries,associates and joint ventures
Gain on disposal of property, plant and equipment
Gain on disposal of investments
(Gain) Loss of financial assets/liabilities at fair value through loss or profit
Changes in operating assets and liabilities:
Decrease in notes receivable
(Increase) Decrease in accounts receivable
(Increase) Decrease in other receivables
Increase in inventories, net
Increase in other current assets
(Decrease) Increase in notes payable
Increase in accounts payable
Increase in other payables
Increase in contract liability
(Decrease) Increase in other current liabilities
Decrease in accrued pension liabilities
Cash (used in) generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash (used in) provided by operating activities		 For theyears ended 31 December For theyears ended 31 December
2020
$2,446,281
71,921
5,524
15,351
(1,813)
(19,171)
(1,999,372)
-
-
(12,183)
1,572
(539,471)
(73,495)
(1,031,472)
(62,981)
(1,622)
495,897
80,231
437,377
(7,979)
(2,941)
(198,346)
1,926
19,171
(13,516)
(345,342)
(536,107)		 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)
2,013
35,137
90,724
54,647
11,101
(2,415)
610,271
4,039
28,333
(11,063)
(245,222)
386,358

(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 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

For theyears ended 31 December For theyears ended 31 December
2020 2019
Cash flows from investing activities:
Acquisition of property, plant and equipment $(47,123) $(19,215)
Proceeds from disposal of property, plant and equipment - 88
Decrease in investments accounted for under the equity method - 8,400
Acquisition of investments accounted for under the equity method (195,939) (83,144)
Acquisition of financial assets at fair value through other comprehensive income (33,629) -
Proceeds from disposal of financial assets at fair value through other comprehensive income 28,029 -
Decrease in financial assets at fair value through other comprehensive income 3,061 6,337
Acquisition of financial assets at fair value through profit or loss (60,000) -
Increase in other noncurrent assets (112,947) (137,592)
Dividends received from subsidiaries,associates and joint ventures 999,188 826,805
Net cash provided by investing activities 580,640 601,679
Cash flows from financing activities:
Cash payments for the principal portion of lease liability (27,334) (16,436)
(Decrease) Increase in short-term loans (282,578) 250,904
Proceeds from bonds issued 1,402,864 -
Proceeds from long-term loans 300,000 -
Cash dividends (1,233,720) (1,026,622)
Net cash provided by (used in) financing activities 159,232 (792,154)
Effect of exchange rate changes on cash and cash equivalents (24) (104)
Net increase in cash and cash equivalents 203,741 195,779
Cash and cash equivalents at beginning of period 984,384 788,605
Cash and cash equivalents at end of period $1,188,125 $984,384

(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 2020 and 2019

(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 19 March 2021.

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 2020. Apart from the nature and impact of the new standard and amendment is described below, the remaining new standards and amendments had no material impact on the Company.

  • (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 Interest Rate Benchmark Reform - Phase 2 (Amendments
to IFRS 9,IAS 39,IFRS 7,IFRS 4 and IFRS 16)		 1 January 2021
  • 220 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (a) Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)

The final phase amendments mainly relate to the effects of the interest rate benchmark reform on the companies’ financial statements:

  • A. A company will not have to derecognise or adjust the carrying amount of financial instruments for changes to contractual cash flows as required by the reform, but will instead update the effective interest rate to reflect the change to the alternative benchmark rate;

  • B. A company will not have to discontinue its hedge accounting solely because it makes changes required by the reform, if the hedge meets other hedge accounting criteria; and

  • C. A company will be required to disclose information about new risks arising from the reform and how it manages the transition to alternative benchmark rates.

The abovementioned amendments that are applicable for annual periods beginning on or after 1 January 2021 have no material impact on the Company.

  • (3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and 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 January2023
c Classification of Liabilities as Current or Non-current –
Amendments to IAS 1		 1 January 2023
d Narrow-scope
amendments
of
IFRS,
including
Amendments to IFRS 3, Amendments to IAS 16,
Amendments to IAS 37 and the Annual Improvements		 1 January 2022
e Disclosure Initiative - Accounting Policies – Amendments
to IAS 1		 1 January 2023
f Definition of Accounting Estimates – Amendments to IAS
8		 1 January 2023
  • 221 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(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.

(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 Company 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

  • 222 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

The carrying amount of a Company 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.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

  • (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.

  • (d) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements

  • A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3)

The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.

  • 223 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

  • C. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.

  • D. Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

  • 224 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (e) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

  • (f) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

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. The new or amended 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 2020 and 2019 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.

  • 225 -

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.

  • 226 -

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.

  • 227 -

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.

  • 228 -

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.

  • 229 -

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

  • 230 -

SINBON ELECTRONICS CO., LTD.

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.

  • 231 -

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.

  • 232 -

SINBON ELECTRONICS CO., LTD.

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, 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.

  • 233 -

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.

  • 234 -

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:

  • 235 -

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.

  • 236 -

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

  • 237 -

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.

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

  • 238 -

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.

  • 239 -

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 2020: 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:

  • 240 -

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.

  • 241 -

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 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.

  • 242 -

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD.

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

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;

  • (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.

  • 243 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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.

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.

  • 244 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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.

(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.

  • 245 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 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.

  • 246 -

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.

  • 247 -

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.

  • 248 -

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.

  • 249 -

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.

  • 250 -

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.

  • 251 -

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:

  • 252 -

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.

  • 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 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 and petty cash
Demand deposits
Time deposits
Total
 As of 31 December
2020 2019
$22
1,188,103
-		 $23
954,109
30,252
$1,188,125 $984,384
  • 254 -

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
Corporate bonds
Total		 As of 31 December As of 31 December
2020 2019
$124,961
69,372
57,204		 $97,144
68,646
-
$251,537 $165,790

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
2020 2019
$960,985
(1,166)		 $1,019,705
(1,166)
959,819
634,782		 1,018,539

36,591
$1,594,601 $1,055,130

Accounts receivables were not pledged.

Accounts receivables are generally on 60-120 day terms. The total carrying amount for the years ended 31 December 2020 and 2019 were NT$1,595,767 thousand and NT$1,056,296 thousand, respectively. Please refer to Note 6(15) for more details on loss allowance and Note 12 for details on credit risk management.

  • 255 -

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
2020
2019
$623,935
$170,802
149,270
62,529
728,678
337,888
264,294
163,486
$1,766,177
$734,705
2020
$623,935
149,270
728,678
264,294
$1,766,177

The inventory cost recognized as operating costs for the years ended 31 December 2020 and 2019 were NT$4,220,171 thousand and NT$3,640,365 thousand, respectively. The price reduction of inventories related to cost of goods sold were NT$17,635 thousand and NT$9,513 thousand.

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
2020 2019
$23,328
227,917
$18,797

223,307
$251,245 $242,104

On 7 October 2020, the Company invested NT$913 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$28,029 thousand, and the cumulative disposal gain of NT$16,350 thousand was transferred from other components of equity to retained earnings.

  • 256 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

On 25 May 2020, the Company invested NT$32,716 thousand in VAN MOOF Global Holding BV. which were reported under equity instrument investments measured at fair value through other comprehensive income during the period.

The return of paid-in capital for capital reduction from Top Taiwan VII Venture Capital Co., Ltd. was NT$3,061 thousand on 27 November 2020.

On 29 April 2020, Top Taiwan II Venture Capital Co., Ltd. and Top Taiwan III Venture Capital Co., Ltd. were closed down and the return of paid-in capital following liquidation were NT$6,450 thousand and NT$5,691 thousand recorded in other receivables.

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.

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

The Company’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the years ended 31 December 2020 and 2019 are as follow:

Related to investments held at the
end of the reporting period
Related to investments derecognized
during the period
Dividends recognized during the
period		 For theyears ended 31 December For theyears ended 31 December
2020 2019
$19,171
-		 $15,662
-
$19,171 $15,662
  • 257 -

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 Energy 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)
SINBON Hungary Kft. (SB Hungary)
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
2020
Amount
%
$4,256,603
100.00
1,988,100
85.53
808,212
100.00
642,709
100.00
320,970
61.18
47,766
100.00
1,379
100.00
55,847
55.00
162,747
100.00
8,284,333
129,014
3.52
-
-
129,014
$8,413,347		 2019
Amount
$4,256,603
1,988,100
808,212
642,709
320,970
47,766
1,379
55,847
162,747
8,284,333
129,014
-
129,014
$8,413,347		 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		 %
100.00
100.00
100.00
100.00
61.18
100.00
100.00
55.00
-
3.59
20.00

On 24 September 2020, BJSB TongAn renamed Beijing SINBON TongAn Energy Co.,Ltd.

In January and December 2020, BJSB TongAn raised capital. However, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 100% to 85.53% and recognized capital surplus in the amount of NT$362,018 thousand.

  • 258 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued) (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On the fourth quarter of 2020, the Company invested additional NT$174,819 thousand in SINBON Hungary Kft.

The Company disposed of the 51% ownership in SINBON Holding GmbH and SINBON Germany GmbH indirectly held through SINBON Europe GmbH on 1 July 2020, and acquired 49% of SINBON Hungary Kft.. The Company directly held shares of SINBON Hungary Kft. after an organization restructuring. So the Company’s shareholding percentage in SINBON Hungary Kft. through SINBON Europe GmbH changed from indirectly holding of 51% to direct holding of 100%.

On 25 August 2020, Argocy Research Inc. raised capital. The Company invested additional NT$21,120 thousand; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 3.59% to 3.52% and recognized capital surplus in the amount of NT$23,807 thousand.

On 20 May 2020, Top Taiwan IV Venture Capital Co., Ltd. was closed down and the return of paid-in capital following liquidation was NT$5,571 thousand recorded in other receivables.

On 10 January 2019, in order to expand its productivity in USA, the Company invested additional NT$33,882 thousand in SINBON USA LLC.

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.

  • 259 -

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 2020 and 2019, 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 Renewable Energy Co., Ltd.(BJSB
TongAn)
Hong Kong SINBON Electronics Co., Ltd. (HKSB)
Kwan-Ze Corporation Ltd. (Kwan-Ze)
SINBON USA L.L.C. (SINBON USA)
Super Elite Ltd. (SEL)
Radbon Avionics Inc. (Radbon)
T-CONN Precision Co., Ltd. (T-CONN)
SINBON Europe GmbH (EuropeSB)
SINBON Hungary Kft. (SB Hungary)
Subtotal
Investments in associates:
Top Taiwan IV Venture Capital Co., Ltd.
Argocy Research Inc.
Subtotal
Total		 For theyears ended 31 December
2020
2019
Investment
income
(loss)
Exchange
differences
on
translation
of Foreign
operations
Investment
income
(loss)
Exchange
differences
on
translation
of Foreign
operations
$667,597
$33,966
$575,888
$(156,582)
584,687
22,495
511,991
(69,496)
584,818
(34,603)
393,627
(8,475)
108,131
3,485
81,795
(4,952)
(32,716)
(3,320)
(8,457)
(1,797)
-
-
(16)
(11,505)
18,629
-
6,691
-
107,384
1,037
39,630
(1,932)
(35,175)
3,875
(64,915)
(2,438)
(25,813)
(3,180)
-
-
1,977,542
23,755
1,536,234
(257,177)
23
-
(10,065)
-
21,807
677
15,733
(997)
21,830
677
5,668
(997)
$1,999,372
$24,432
$1,541,902
$(258,174)		 For theyears ended 31 December
2020
2019
Investment
income
(loss)
Exchange
differences
on
translation
of Foreign
operations
Investment
income
(loss)
Exchange
differences
on
translation
of Foreign
operations
$667,597
$33,966
$575,888
$(156,582)
584,687
22,495
511,991
(69,496)
584,818
(34,603)
393,627
(8,475)
108,131
3,485
81,795
(4,952)
(32,716)
(3,320)
(8,457)
(1,797)
-
-
(16)
(11,505)
18,629
-
6,691
-
107,384
1,037
39,630
(1,932)
(35,175)
3,875
(64,915)
(2,438)
(25,813)
(3,180)
-
-
1,977,542
23,755
1,536,234
(257,177)
23
-
(10,065)
-
21,807
677
15,733
(997)
21,830
677
5,668
(997)
$1,999,372
$24,432
$1,541,902
$(258,174)
2020
Investment
income
(loss)
Exchange
differences
on
translation
of Foreign
operations
$667,597
$33,966
584,687
22,495
584,818
(34,603)
108,131
3,485
(32,716)
(3,320)
-
-
18,629
-
107,384
1,037
(35,175)
3,875
(25,813)
(3,180)
1,977,542
23,755
23
-
21,807
677
21,830
677
$1,999,372
$24,432
Investment
income
(loss)
$667,597
584,687
584,818
108,131
(32,716)
-
18,629
107,384
(35,175)
(25,813)
1,977,542
23
21,807
21,830
$1,999,372
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
  • 260 -

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$349,206 thousand and NT$199,084 thousand as of 31 December 2020 and 2019.

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
2020
$21,830
13,933
$35,763		 2019
$5,668
27,268
$32,936

The associates had no contingent liabilities or capital commitments as of 31 December 2020 and 2019.

Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT$1,872,100 thousand and NT$1,332,652 thousand as of 31 December 2020 and 2019; the related shares of investment income from the associates and joint ventures amounted to NT$799,383 thousand and NT$509,650 thousand for the years ended 31 December 2020 and 2019, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$63,134 thousand and NT$27,268 thousand for the years ended 31 December 2020 and 2019, respectively; are based solely on the reports of other independent accountants.

  • 261 -

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

Cost: Land
$150,430
-
-
-
$150,430
$150,430
-
-
-
$150,430
$ -
-
-		 Buildings
$422,707
3,567
(3,510)
1,371
$424,135
$408,170
4,203
-
10,334
$422,707
$125,824
17,264
(3,510)		 Machinery
and
equipment

$145,651

21,873
(2,703)
3,338
$168,159
$136,534
8,143
(1,324)
2,298
$145,651
$94,096
15,343
(2,703)		 Office
equipment
$39,005
7,337
(1,121)
2,249
$47,470
$29,633
1,290
(990)
9,072
$39,005
$24,628
5,969
(1,121)		 Transportati
on
equipment
$2,244
-
-
-
$2,244
$1,145
1,099
-
-
$2,244
$1,176
299
-		 Other
equipmen
t
$19,191
2,181
(175)
137,416
$158,613
$13,332
4,480
-
1,379
$19,191
$7,430
4,844
(175)		 Leasehold
improvements		 Total
$786,387
47,123
(7,509)
144,374
$970,375
$746,403
19,215
(2,314)
23,083
$786,387
$259,865
45,001
(7,509)
$7,159
12,165
-
-
$19,324
$7,159
-
-
-
$7,159
$6,711
1,282
-
As of 1 January 2020
Additions
Disposals
Other changes
As of 31 December 2020
As of 1 January 2019
Additions
Disposals
Other changes
As of 31 December 2019
Depreciation and
impairment:
As of 1 January 2020
Depreciation
Disposals
As of 31 December 2020
As of 1 January 2019
Depreciation
Disposals
As of 31 December 2019
Net carrying amount
as at:
$ - $139,578 $106,736 $29,476 $1,475 $12,099 $7,993 $297,357
$ -
-
-
$ -
$150,430
$150,430		 $109,961
15,863
-
$125,824
$284,557
$296,883		 $84,687
10,733
(1,324)
$94,096
$61,423
$51,555		 $21,841
3,777
(990)
$24,628
$17,994
$14,377		 $875
301
-
$1,176
$769
$1,068		 $4,313
3,117
-
$7,430
$146,514
$11,761		 $6,068
643
-
$6,711
$11,331
$448		 $227,745
34,434
(2,314)
$259,865
$673,018
$526,522
31 December 2020
31 December 2019
  • 262 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Property, plant and equipment was not pledged.

There is no capitalization of interest due to purchase of property, plant and equipment

Components of building that have different useful lives are the main building structure and air conditioning, which are depreciated over 50 years and 25 years, respectively.

(8) Other non-current assets

Other non-current assets

Prepayment for equipment
Long-term prepaid rent
Refundable deposits
Other long-term investment
Other assets
Total		 As of 31 December
2020
2019
$72,576
$102,999
13,292
6,330
12,857
26,347
600
600
154
154
$99,479
$136,430
2019
$102,999
6,330
26,347
600
154
$136,430

No other non-current assets were pledged.

  • (9) Short-term loans
Short-term loans
Unsecured bank loans
Interest rates applied		 As of 31 December
2020
2019
$1,458,588
$1,741,166
As of 31 December		 2019
$1,741,166
2020
0.57%~0.70%		 2019
0.63%~0.72%

The Company’s unused short-term lines of credits amounted to NT$1,766,812 thousand and NT$302,332 thousand as of 31 December 2020 and 2019, respectively.

  • 263 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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

Held for trading:
Derivatives not designated as hedging
Instruments
Cross currency swaps
Embedded derivative-bonds
Foreign exchange option contracts
Total
Current
Non-current
Total
(11)
Bonds payable
Liability component
Principal amount
Discounts on bonds payable
Subtotal
Less: current portion
Net
Embedded derivative
Equity component		 As of31 December As of31 December
2020
2019
$22,084
$7,910
2,470
-
28
-
$24,582
$7,910
$22,112
$7,910
2,470
-
$24,582
$7,910
As of 31 December		 2019
$7,910
-
-
$7,910
$7,910
-
$7,910
2020 2019
$1,300,000
(43,019)
$7,200
(59)
1,256,981
-		 7,141
(7,141)
$1,256,981
$-
$2,470
$-
$143,735
$211

A. Issuance of convertible bonds:

On 15 December 2020, the Company issued the seventh 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:

  • 264 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Issue amount: NT$1,300,000 thousand

Period: 15 December 2020 ~ 15 December 2023

Redemption clauses:

  • a. The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (16 March 2021) and prior to 40 days before the maturity date (5 November 2023), 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 (16 March 2021)and prior to 40 days before the maturity date (5 November 2023), 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 (15 December 2022) of the issuance, at the principal amount of the bonds with an interest calculated at the rate of 0.5% per annum.

  • 265 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Terms of Exchange:

  • a. Underlying Securities: Common shares of the Company

  • b. Exchange Period: The bonds are exchangeable at any time on or after 16 March 2021 and prior to 15 December 2023 into common shares of the Company.

  • c. Exchange Price and Adjustment: The exchange price was originally NT$203 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 liabilities of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT$2,470 thousand as at 31 December 2020.

B. 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

  • 266 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY 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 2020) 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.

  • 267 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY 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 as at 31 December 2019, respectively.

The convertible bonds that have already been converted were NT$500,000 thousand and NT$492,800 thousand as at 31 December 2020 and 2019, respectively.

(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 2020 and 2019 were NT$27,793 thousand and NT$21,968 thousand, respectively.

  • 268 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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.

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 2020.

The weighted average duration of the defined benefits obligation was 12.4 years as of 31 December 2020.

  • 269 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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
2020 2019
$806
813		 $1,197
948
$1,619 $2,145

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		 31 Dec. 2020

$138,096
(65,131)
$72,965		 As of
31 Dec. 2019

$138,518
(62,086)
$76,432		 1 Jan.2019
$144,516
(56,006)
$88,510

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

As of 1 January 2019
Current service cost
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
Defined benefit
obligation
Plan assets at
fair value		 Net defined
benefit
liabilities
$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)
  • 270 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

As of 31 December 2019
Current period service costs
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 2020		 As of
Defined benefit
obligation
Plan assets at
fair value		 Net defined
benefit
liabilities
138,518
806
1,522		 (62,086)
-
(709)		 76,432
806
813
140,846
3,229
(1,963)
-		 (62,795)
-
-
(1,792)
78,051
3,229
(1,963)
(1,792)
1,266 (1,792) (526)
(4,016)
-		 4,016
(4,560)		 -
(4,560)
$138,096 $65,131 $72,965

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
2020 2019
0.85%
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
2020 2019
Defined
benefit
obligation
increase		 Defined
benefit
obligation
decrease
Defined
benefit
obligation
increase		 Defined
benefit
obligation
decrease
$ -
6,830
13,739
-		 $6,339
-
-
12,101		 $ -
7,408
14,967
-		 $6,849
-
-
13,082

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping

  • 271 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 2020 and 2019. The issued capital was NT$2,327,775 thousand and NT$2,325,237 thousand in a total of 232,778 thousand shares and 232,524 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 in the amount of NT$1,081 thousand in a total of 108 thousand shares from 1 January 2020 to 31 December 2020 and had completed the registration process as of 31 December 2020.

As of 1 January 2020, the accumulated book value of certificates of bond - to - stock conversion that had completed the registration process amounted to NT$1,457 thousand in a total of 146 thousand shares as of 31 March 2020.

(b) Capital surplus

Capital surplus
As of 31 December
2020 2019
Additional paid-in capital $1,247,563 $1,241,283
Treasury share transactions 5,749 5,749
Share of changes in net assets of 135,284 (1,690)
associates
and
joint
ventures
accounted for using the equity method
Difference between consideration received (11,020) (17,477)
and carrying amount of interests in
subsidiaries acquired/disposed of
Increase (decrease) through changes in 363,080 -
ownership interests in subsid
Premium from merger 705 705
Stok options 143,735 211
Total $1,885,096 $1,228,781
  • 272 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 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.

  • 273 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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. 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 2020 and 2019.

Details of the 2020 and 2019 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 19 March 2021 and 12 June 2020, respectively, are as follows:


Common stock -cash dividend
Legal reserve
Special reserve (reversal)
Total
 Appropriation of earnings Appropriation of earnings Dividendper share(NT$) Dividendper share(NT$)
2020 2019 2020 2019
$1,466,498
213,221
(81,494)		 $1,233,720
172,624
139,290		 $6.3 $5.3
$1,598,225 $1,545,634

Please refer to Note 6(16) for further details on employees’ compensation and remuneration to directors and supervisors.

  • 274 -

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
2020
$5,511,325
59,428
$5,570,753		 2019
$4,862,963
36,321
$4,899,284

Analysis of revenue from contracts with customers for the years ended 31 December 2020 and 2019 are as follows:

(1) Disaggregation of revenue

For the year ended 31 December 2020

iComponent
Industrial Medical Automotive Solution
Business Unit Business Unit Business Unit Business Unit Total
Sale of goods $2,196,032 $675,168 $695,766 $1,944,359 $5,511,325
Other 23,680 7,280 7,502 20,966 59,428
operating
revenues
Total $2,219,712 $682,448 $703,268 $1,965,325 $5,570,753
Timing of
revenue
recognition :
At a point $2,219,712 $682,448 $703,268 $1,965,325 $5,570,753
in time
Over time - - - - -
Total $2,219,712 $682,448 $703,268 $1,965,325 $5,570,753
  • 275 -

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 2019

Sale of goods
Other
operating
revenues
Total
Timing of
revenue
recognition :
At a point
in time
Over time
Total		 Industrial
Business Unit
$1,863,018
13,915
$1,876,933
$1,876,933
-
$1,876,933		 Medical
Business Unit
$608,696
4,546
$613,242
$613,242
-
$613,242		 Automotive
Business Unit
$582,182
4,348
$586,530
$586,530
-
$586,530		 iComponent
Solution
Business Unit
$1,809,067
13,512
$1,822,579
$1,822,579
-
$1,822,579		 Total
$4,862,963
36,321
$4,899,284
$4,899,284
-
$4,899,284

(2) Contract balances

Contract liabilities - current

Contract liabilities - current
Sales of goods 109.12.31 108.12.31 108.1.1
$581,495 $144,118 $89,471

For the years ended 31 December 2020 and 2019, contract liabilities increased as additional performance obligations are not satisfied.

  • (3) Transaction price allocated to unsatisfied performance obligations

None

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

None

  • 276 -

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)

The Company had no expected credit losses (gains) for the years ended 31 December 2020 and 31 December 2019.

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 2020 and 2019 are as follows:

31 December 2020


Gross carrying
amount
Loss ratio
Lifetime
expected
credit losses
Carrying amount		 Not yet
due(note)

$1,581,490
-%
-
$1,581,490		 Overdue >=121 days Total
<=30 days
31-60 days
 61-90 days

$ -
-%
-
$ -		 91-120 days

$ -
-%
-
$ -
$14,035
$7,729
-%
-%		 $1,166
30-100%		 $1,604,420
-
-		 (1,166) (1,166)
$14,035
$7,729		 $ - $1,603,254

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

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

  • 277 -

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 2020 and 2019 are as follows:

as follows:
As of 1 January 2020
Write off
Addition/(reversal) for the current period
As of 31 December 2020
As of 1 January 2019
Write off
Addition/(reversal) for the current period
As of 31 December 2019		 Note receivables
$ -
-
-
$-
-
-
-
$-		 Trade receivables
$1,166
-
-
$1,166
$1,166
-
-
$1,166

  • (16) Leases

  • (1) The Company is a lessee

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
2020 2019
$190,655
16,634		 $45,826
16,520
$207,289 $62,346
  • 278 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

During the years ended 31 December 2020 and 2019, The Company’s additions to right-of-use assets amounting to NT$172,255 thousand and NT$56,257 thousand, respectively.

(b) Lease liabilities

Lease liabilities
Lease liabilities
Current
Non-Current
Total		 As of 31 December
2020 2019
$38,549
169,056		 $18,673
43,743
$207,605 $62,416

Please refer to Note 6(18)(c) for the interest on lease liabilities recognized during the years ended 31 December 2020 and 2019 and refer to Note 12 (5) liquidity risk management for the maturity analysis for lease liabilities as at 31 December 2020 and 2019.

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
2020
$20,144
6,776		 2019
$10,361
5,884
$26,920 $16,245

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
2020
$9,842		 2019
$9,302
  • 279 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

D. Cash outflow related to lessee and lease activity

During the years ended 31 December 2020 and 2019, The Company’s total cash outflows for leases amounting to NT$37,176 thousand and NT$25,738 thousand.

  • (17)Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2020 and 2019:
Function
Nature		 For theyears ended 31 December For theyears ended 31 December For theyears ended 31 December For theyears ended 31 December
2020 2019
Operating
costs		 Operating
expenses		 Total Operating
costs		 Operating
expenses		 Total
Employee benefits expense
Salaries $184,880 $492,059 $676,939 $93,613 $453,884 $547,497
Labor and health insurance 20,312 39,427 59,739 11,646 31,827 43,473
Pension 9,444 19,968 29,412 6,092 18,021 24,113
Remuneration to directors and
supervisors		 - 20,000 20,000 - 17,350 17,350
Other employee benefits
expense		 18,024 19,246 37,270 10,776 17,091 27,867
Depreciation 34,334 37,587 71,921 22,721 27,958 50,679
Amortization 149 5,375 5,524 185 2,667 2,852

As of 31 December 2020 and 2019, the number of employees of the Company were 1,015 and 782; the number of directors who were not concurrently employees were 9 and 10, respectively.

For the years ended 31 December 2020 and 2019, the average of employees benefits expense of the Company were NT$799 thousand and NT$833 thousand, respectively.

For the years ended 31 December 2020 and 2019, the average of employees salaries of the Company were NT$673 thousand and NT$709 thousand, respectively.

The Company’s average salary expense adjustment for the year ended 31 December 2020 decreased by 5%.

  • 280 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

The Company’s policy for compensation of directors, managers and employees is as follows:

The remuneration standard of the Company’s managers shall be determined by the company’s human resources unit in accordance with the relevant provisions of personnel performance evaluation, personal performance and contribution to the company’s overall operations, and reference to the market level of the industry. After being reviewed by the Salary and Compensation Committee and approved by the Board of Directors, it will be implemented.

The Company's salary and remuneration policy is planned based on individual abilities and performance differentiation, and considering cost-effectiveness and risk control remuneration resources; and in order to attract, retain and motivate talents, relatively reasonable salary standards are formulated. The overall salary and remuneration package mainly include basic salary, bonuses, employee dividends, and benefits. Remuneration standard, basic salary is based on the market competition situation of the position held by the employee and the company's policy; bonus and employee dividend are paid in conjunction with the achievement of the employee's personal and departmental goals or the company's operating performance; the welfare part is in compliance with the law and regulations. The premise is to be revised at any time according to environmental needs, and the actual needs of employees are the main consideration, and welfare measures that employees can share are designed.

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.

  • 281 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Based on profit of 31 December 2020, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2020 to be 1.43% and 0.82% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended of 31 December 2020 amount to NT$35,000 thousand and NT$20,000 thousand respectively, recognized as employee benefits expense.

A resolution was passed at the Board of Directors meeting held on 19 March 2020 to distribute NT$35,000 thousand and NT$20,000 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2020, 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 2020 are recognized in profit or loss of the subsequent year in 2021.

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. 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 2019.

(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
2020
$19,171
38,360
3,928
1,813
96,012
$159,284		 2019
$28,333
19,883
2,230
4,038
82,902
$137,386
  • 282 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(b) Other gains and losses

Foreign exchange (losses) gains, net
Gains on disposal of investments
Gains on disposal of property, plant and
equipment
Gains (Losses) of financial asset at fair
value through profit or loss (Note1)
Losses of financial liabilities at fair value
through profit or loss (Note2)
Total		 For theyears ended 31 December For theyears ended 31 December
2020
$(34,149)
-
-
25,747
(13,564)
$(21,966)		 2019
$17,866
4,847
88
(788)
(7,910)
$14,103

Note:

  1. Balances were arising from financial assets mandatorily measured

at fair value through profit or loss.

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

(c) Finance costs

For the years ended 31 December

Interest on loans from bank
Interest on bonds payable
Interest on lease liabilities
Total		 2020
$13,718
969
664
$15,351		 2019
$10,812
1,769
241
$12,822
  • 283 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(19)Components of other comprehensive income

For the year ended 31 December 2020

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
Share of other comprehensive income (loss)
of subsidiaries, associates and joint
ventures which will not be reclassified
subsequently to profit or loss
To be reclassified to profit or loss in
subsequent periods:
Exchange differences resulting from
translating the financial statements of
foreign operations
Share of other comprehensive income (loss)
of subsidiaries, associates and joint
ventures which may be reclassified
subsequently to profit or loss
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
$526
18,743
59,367
19,213
5,199		 $ -
-
-
-
-		 $526
18,743
59,367
19,213
5,199		 $(104)
-
-
(3,107)
-		 $422
18,743
59,367
16,106
5,199
$103,048 $- $103,048 $(3,211) $99,837
  • 284 -

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD.

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

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
Share of other comprehensive income (loss)
of subsidiaries, associates and joint
ventures which will not be reclassified
subsequently to profit or loss
To be reclassified to profit or loss in
subsequent periods:
Exchange differences resulting from
translating the financial statements of
foreign operations
Share of other comprehensive income (loss)
of subsidiaries, associates and joint
ventures which may be reclassified
subsequently to profit or loss
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
12,992
37,549
(227,407)
(7,881)		 $ -
-
-
-
-		 $9,663
12,992
37,549
(227,407)
(7,881)		 $(1,933)
-
-
45,457
-		 $7,730
12,992
37,549
(181,950)
(7,881)
$(175,084) $- $(175,084) $43,524 $(131,560)

(20)Income tax

The major components of income tax expense are as follows:

  • 285 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Income tax expense recognized in profit or loss

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
Total income tax expense		 For the years ended
31 December
2020
$353,068
(289)
(20,366)
$332,413		 2019
$298,302
-
(22,994)
$275,308

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
2020
$3,107
104
$3,211		 2019
$(45,457)
1,933
$(43,524)

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

multiplied by applicable tax rates is as follows:
Accounting profit 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
Total income tax expense recognized in profit or loss		 For the years ended
31 December
2020 2019
$2,446,281 $1,993,819
$489,256
(36,540)
219
(126,047)
5,814
(289)		 $398,764
(16,696)
354
(112,166)
5,052
-
$332,413 $275,308
  • 286 -

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 (liabilities) relate to the following:

For the year ended 31 December 2020

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
$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		 Recognized in
profit or loss
$ -
(3,436)
3,526
(2,309)
21,319
1,378
-
16
-
(128)
$20,366		 Recognized in
other
comprehensive
income
$(3,107)
-
-
-
-
-
(104)
-
-
$(3,211)		 Balance as of
31 December
$79,998
923
8,427
(8,838)
(151,966)
18,434
7,464
8,095
974
(1,172)
$(37,661)
$124,315
$161,976
  • 287 -

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 2019

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

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 2020, the Company’s income tax returns through 2018 have been assessed and approved by the tax authority.

  • 288 -

SINBON ELECTRONICS CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(21)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$)
(b) Diluted earnings per share
Profit attributable to ordinary equity holders of the
Company
Add: Interest expense from convertible bonds
Profit attributable to ordinary equity holders of the
Company after dilution
Weighted average number of ordinary shares
outstanding for basic earnings per share (in
thousands)
Effect of dilution:
Employee compensation-stock (in thousands)
Convertible bonds (in thousands)
Weighted average number of ordinary shares
outstanding after dilution (in thousands)
Diluted earnings per share (NT$)		 For the years ended
31 December
2020
$2,113,868
232,766
$9.08
$2,113,868
8
$2,113,876
232,766
195
12
232,973
$9.07		 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

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

  • 289 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  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 Renewable Energy Co.,
Ltd.
Jiangsu ENMAGIC Energy Co., Ltd.

ENMAGIC Renewable Energy Co., Ltd.

SINBON Europe GmbH
 Nature of relationship
Associate
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
  • Note: On 10 January 2019, the Company acquired additional investment of SINBON Circuits & Cables LLC, its relationship from associate transfers to subsidiary.

Significant transactions with related parties

(a) Sales

ales
Subsidiaries
Associates
Total		 For the years ended
31 December
2020
$393,940
164,266
$558,206		 2019
$4,794
36,468
$41,262
  • 290 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 2020 and 2019 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

(b) Purchases

Purchases
Subsidiaries For the years ended
31 December
2020
$1,753,846		 2019
$1,068,961

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.

(c) Accounts receivable-related parties

Accounts receivable-related parties
Subsidiaries
Associates
Total		 As of 31 December
2020
2019
$634,782
$160
-
36,431
$634,782
$36,591
2020
$634,782
-
$634,782
  • (d) Other receivables
Other receivables
Subsidiaries As of 31 December
2020
$493,892		 2019
$75,358

(e) Accounts payable-related parties

Accounts payable-related parties
Subsidiaries As of 31 December
2020
$455,087		 2019
$304,538
  • 291 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (f) Other payables
Other payables
Subsidiaries
Associates
Total		 As of 31 December
2020
$11,148
12
$11,160		 2019
$7,570
125
$7,695
  • (g) Expenses
Expenses
Subsidiaries
Associates
Total
Other income
Subsidiaries
Associates
Total		 For the years ended
31 December
2020
2019
$22,240
$15,547
1,269
119
$23,509
$15,666
For the years ended
31 December		 2019
$15,547
119
$15,666
2020
$12,398
102
$12,500		 2019
$4,172
-
$4,172

  • (h) Other income

  • (i) Key management personnel compensation

Short-term employee benefits
Post-employment benefits
Total		 For the years ended
31 December		 For the years ended
31 December
2020
$100,242
29,412
$129,654		 2019
$102,338
24,113
$126,451

8. Assets pledged as security

None.

  • 292 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

9. Significant contingencies and unrecognized contract commitments

  • (a) The Company provided guarantees for subsidiaries’ financing to banks for the year ended 31 December 2020. Please refer to Note 13.1(2).

  • (b) As of 31 December 2020 and 2019, the Company was issued letters of guarantee by banks in the amount of NT$6,000 thousand and NT$2,000 thousand for importing goods, respectively.

  • (c) Amounts available under unused letters of credit are as follows:

Currency
USD		 Carryingamount Carryingamount
109.12.31
$300		 108.12.31
$ -

The amounts that are available under unused letters of credit above are unguaranteed.

  1. Significant disaster loss

None.

11. Significant subsequent events

None.

12. Others

  • (1)Categories of financial instruments

Financial assets

Financial assets
Financial assets at fair value through profit or loss:
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
2020
$251,537
251,245
3,385,250
$3,888,032		 2019
$165,790
242,104
2,163,175
$2,571,069
  • 293 -

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
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 liabilities
Subtotal
Financial liabilities at fair value through profit or loss:
Held for trading
Total		 As of 31 December
2020
$1,458,588
1,420,926
1,256,981
300,000
459,751
207,605
5,103,851
24,582
$5,128,433		 2019
$1,741,166
926,651
7,141
-
379,318
62,416
3,116,692
7,910
$3,124,602

Note:

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

  • (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.

  • 294 -

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.

  • 295 -

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 2020 and 2019 are as follows:

For the year ended 31 December 2020

Main Risk
Foreign currency risk
Interest rate risk		 Fluctuation
NTD/USD rate +/− 1%
Market rate +/− 10 basis points		 Sensitivity of
profit/loss
+/−$9,509
−/+$1,776		 Sensitivity of
equity
-
-

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
-
-
  • 296 -

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 2020 and 2019 by NT$12,496 thousand and NT$9,714 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$2,333 thousand and NT$1,880 thousand on the equity attributable to The Company for the years ended 31 December 2020 and 2019, 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.

(5) 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.

  • 297 -

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 2020 and 2019, amounts receivables from top ten customers represented 50% and 31% 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.

(6) 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.

  • 298 -

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

SINBON ELECTRONICS CO., LTD.

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

Non-derivative financial instruments

Less than 1year
As of 31 December 2020
Loans
$1,463,144
Notes and accounts payable
1,420,926
Convertible bonds
-
Lease liabilities
39,353
As of 31 December 2019
Loans
$1,743,041
Notes and accounts payable
926,651
Convertible bonds
7,213
Lease liabilities
18,981
Derivative financial instruments
Less than 1year
As of31 December2020
Cross currency swaps
Net settlement – outflow
$(22,084)
Foreign exchange option
contracts
Net settlement - outflow
$(28)
Less than 1year
As of31 December2019
Cross currency swaps
Net settlement - outflow
$(7,910)		 Less than 1year 2 to 3years
$301,740
-
1,313,033
67,461
$ -
-
-
26,902
2 to 3years
$ -
$ -
2 to 3years
$ -		 4 to 5years > 5years

$ -

-

-

61,748
$ -
-
-
-
> 5years
$ -
$ -
> 5years
$ -		 Total

$1,764,884

1,420,926

1,313,033

212,235

$1,743,041

926,651

7,213

62,895
Total
$(22,084)
$(28)
Total
$(7,910)
$ -
-
-
43,673
$ -
-
-
17,012
4 to 5years
$ -
$ -
4 to 5years
$ -

The table above contains the undiscounted net cash flows of derivative 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)

  • (6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2020:

As of 1 January 2020
Cash flow
Non-cash change
As of 31 December
2020		 Short-term
loans
$1,741,166
(282,578)
-
$1,458,588		 Lease
liabilities
$62,416
(27,334)
172,523
$207,605		 Long-term
loan(including
maturity within a
year)
$ -
300,000
-
$300,000		 Bonds payable
(including
maturity within a
year)
$7,141
1,402,864
(153,024)
$1,256,981		 Total liabilities
from financing
activities
$1,810,723
1,392,952
19,499
$3,223,174

Reconciliation of liabilities for the year ended 31 December 2019:

Bonds payable
Lease (including maturity Total liabilities from
Short-term loans liabilities within ayear) financingactivities
As of 1 January 2019 $1,490,262 $22,354 $404,554 $1,917,170
Cash flow 250,904 (16,436) - 234,468
Non-cash change - 56,498 (397,413) (340,915)
As of 31 December 2019 $1,741,166 $62,416 $7,141 $1,810,723

(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:

  • 300 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • 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).

  • 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).

  • 301 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (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 2020 and 2019 are as follows:

Cross currency swaps and foreign exchange option contracts

The Company entered into cross currency swaps and foreign exchange 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 and foreign exchange option contracts:

Items
As of 31 December 2020
Cross currency swaps
Foreign
exchange
option
contacts
Foreign
exchange
option
contacts
As of 31 December 2019
Cross currency swaps		 Amount(in thousands)
USD
24,000
Buy USD
100
Sell USD
200
USD
17,000		 Contract Period
3 January 2020 – 18 March2021
22 October 2020 – 22 January 2021
22 October 2020 – 22 January 2021
2 January 2019 – 13 March 2020
  • 302 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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:

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.

  • 303 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (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 2020

As of 31 December 2020
Financial assets:
Financial assets at fair value through profit or loss
Stocks
Funds
Corporate bonds
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
Foreign exchange option contracts
Embedded derivative-bonds
As at 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
$124,961
69,372
57,204
23,328
$ -
-
-
Level 1
$68,646
97,144
18,797
$ -		 Level 2
$ -
-
-
-
$22,084
28
2,470
Level 2
$ -
-
-
$7,910		 Level 3
$ -
-
-
227,917
$ -
-
-
Level 3
$ -
-
223,307
$ -		 Total
$124,961
69,372
57,204
251,245
$22,084
28
2,470
Total
$68,646
97,144
242,104
$7,910
  • 304 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2020 and 2019, 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 2020
Total gains and losses recognized for the year
ended 31 December 2020:
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
Acquisition
The return of paid-in capital following
liquidation (Note)
Ending balances as of 31 December 2020
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
$223,307
(12,904)
(3,061)
32,716
(12,141)
$227,917
$219,751
9,893
(6,337)
$223,307

Note: The return of paid-in capital following liquidation were recorded in other receivables.

  • 305 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 2020

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$22,792 thousand

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

  • 306 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

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 2020
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 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))
 Level 1 Level 2 Level 3 Total
$349,206
Level 1
$ -
Level 2
$ -
Level 3		 $349,206
Total
$199,084
$ -
$ -		 $199,084

(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		 As of 31 December 2020
Foreign
exchange
rate
NTD
0.28
$36,414
28.51
2,304,091
35.06
109,851		 As of 31 December 2019 31 December 2019
Foreign
currencies
$131,698
80,823
3,134		 Foreign
exchange
rate
0.28
28.51
35.06		 Foreign
currencies
$247,280
55,692
3,952		 Foreign
exchange
rate
0.28
30.11
33.75		 NTD
$68,525
1,676,678
133,370
  • 307 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

Financial liabilities
Monetaryitems:
JPY
USD
EUR		 As of 31 December 2020
Foreign
exchange
rate
NTD
0.28
315
28.51
1,353,179
35.06
20,955		 As of 31 December 2019 31 December 2019
Foreign
currencies
1,139
47,467
598		 Foreign
exchange
rate
0.28
28.51
35.06		 Foreign
currencies
545
35,434
659		 Foreign
exchange
rate
0.28
30.11
33.75		 NTD
151
1,066,765
22,250

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$(34,149) thousand and NT$17,866 thousand foreign exchange (losses) gains for the years ended 31 December 2020 and 2019, 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.

13. Other disclosure

  • (1) Information at significant transactions and information on investees:

  • (a) Financing provided to others for the year ended 31 December 2020: Please refer to Attachment 1.

  • 308 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (b) Endorsement/Guarantee provided to others for the year ended 31 December 2020: Please refer to Attachment 2.

  • (c) Securities held as of 31 December 2020: 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 2020: 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 2020: 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 2020: 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 2020: 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 2020: Please refer to Attachment 5.

  • (i) Names, locations, main businesses and products, original investment amount, investment as of 31 December 2020, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2020: Please refer to Attachment 7.

  • (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.

  • 309 -

SINBON ELECTRONICS CO., LTD.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

  • (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.

  • (3) Information of major shareholders

As of 31 December 2020

Shares
Main shareholder		 Number of
shares		 Percentage of
ownership (%)
Fubon Life Insurance Co.,Ltd. 13,500,167 5.79%

Note ：

  1. The main shareholder information in the table is calculated by the Taiwan Depository & Clearing Corporation on the last business day at the end of each quarter. The information included the total number of ordinary shares and special shares held by the shareholders who have completed the delivery without physical registration (including treasury shares) that reached 5%. The share capital stated in the Company's financial report and the number of shares actually delivered by the Company without physical registration may differ because the calculation bases were different.

  2. If the above information included the shareholder's shares transferred to the trust, it will be disclosed by the trustee who opened the trust account individually. As for shareholders who declared insider equity holding for more than 10% in accordance with the Securities Exchange Act, such shareholdings shall include their shareholdings plus their shares that have been delivered to the trust and shares of the trust that they have control of. Please refer to the information on insider equity declaration in the “Market Observation Post System” on the website of the TWSE

14. Segment information

The Company fully disclosed segment information in consolidated financial statements.

  • 310 -

Attachment 1: Financing provided to others for the year ended 31 December 2020

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		 SB Hungary Other
receivables		 Y $105,341 $105,169 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $915,479 $3,661,915
1 BJSB BJSB Tongan Other
receivables		 Y $43,788 $43,592 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $93,459 $93,459
2 JYSB TCSB Other
receivables		 Y $70,937 $70,619 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $329,771 $1,319,084
3 KSEM JSEM Other
receivables		 Y $5,254 $5,231 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $5,541 $5,541
1 BJSB JSEM Other
receivables		 Y $43,592 $43,592 $ - 0.00% Note 4 $ - Need for
operating		 $ - - $ - $93,459 $93,459

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 10% of the lender's net worth of the financial which were reviewed by independent accountants as of 31 December 2020.

The Company: $9,154,788*10%=$915,479

JYSB: $3,297,711*10%=$329,771

Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial which were reviewed by independent accountants as of 31 December 2020.

BJSB: $233,648*40%=$93,459

KSEM ： $13,853*40%=$5,541

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 2020.

The Company: $9,154,788*40%=$3,661,915

JYSB ： $3,297,711*40%=$1,319,084

BJSB: $233,648*40%=$93,459

KSEM ： $13,853*40%=$5,541

Note 4: For short-term financing.

-311-

Attachment 2: Endorsement/Guarantee provided to others as of 31 December 2020

(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 SINBON USA 2 $3,661,915 $15,127 $14,254 $8,552 none 0.16% $9,154,788 Y N N
0 The Company SZSB 2 $3,661,915 $15,165 $14,254 $ - none 0.16% $9,154,788 Y N Y
0 The Company SHSB 2 $3,661,915 $45,495 $42,762 $ - none 0.47% $9,154,788 Y N Y
0 The Company TCSB 2 $3,661,915 $404,229 $270,826 $95,902 none 2.96% $9,154,788 Y N Y
0 The Company JYSB 2 $3,661,915 $409,455 $384,858 $156,931 none 4.20% $9,154,788 Y N Y
0 The Company JSEM 2 $3,661,915 $379,125 $ - $ - none 0.00% $9,154,788 Y N Y
0 The Company BJSB TongAn 2 $3,661,915 $619,921 $ - $ - none 0.00% $9,154,788 Y N Y
0 The Company T-CONN 2 $2,746,436 $75,825 $ - $ - none 0.00% $9,154,788 Y N N
0 The Company T-CONN Zhongshan 2 $3,661,915 $318,465 $ - $ - none 0.00% $9,154,788 Y N Y
0 The Company Radbon 2 $2,746,436 $150,000 $150,000 $125,000 none 1.64% $9,154,788 Y N N
0 The Company C&C 2 $3,661,915 $272,970 $256,572 $128,286 none 2.80% $9,154,788 Y N N
0 The Company SB Hungary 2 $3,661,915 $322,435 $311,273 $300,432 none 3.40% $9,154,788 Y N N
1 T-CONN T-CONN Zhongshan 2 $211,426 $192,313 $99,778 $ - none 18.88% $528,565 N N Y

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

  • The Company is coded "0".

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

  • Note 2: According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:

  • A company with which it does business.

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

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

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

  • 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.

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

  • 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 overseas subsidiary is 40% of the net worth of the financial report audited by the certified public accountants as of 31 December 2020.

  • $9,154,788*40%=$3,661,915

  • Limit of guarantee/endorsement amount for domestic subsidiaries is 30% of the net worth of the financial report of the company reviewed by the certified public accountants as of 31 December 2020. $9,154,788*30%=$2,746,436

  • Limit of guarantee/endorsement amount for T-CONN Zhongshan is 40% of the net worth of the financial of T-CONN which were not reviewed by the certified public accountants as of 31 December 2020. $528,565*40%=$211,426

  • 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 2020.

  • 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.

-312-

Attachment 3: Securities held as of 31 December 2020. (Excluding subsidiaries, associates and joint ventures)

Holding
Company		 Type and name of securities Relationship
(Note 1)		 Financial statement account as of 31 December 2020 as of 31 December 2020 as of 31 December 2020 as of 31 December 2020 as of 31 December 2020 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 $117,519 11.10% $117,519 -
The Company Top Taiwan Venture Capital Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 6,000,000 shares 57,764 7.50% 57,764 -
The Company Dynahz Technologies - Financial assets measured at fair value through other
comprehensive income- noncurrent		 2,771,670 shares 35,850 16.67% 35,850 -
Kwan-Ze Chengding Venture Capital Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 5,000,000 shares 39,138 3.70% 39,138 -
The Company Gongwin Biopharm Holdings Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 96,000 shares 23,328 0.25% 23,328 -
The Company Top Taiwan VII Venture Capital Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 1,132,653 shares 13,785 2.40% 13,785 -
Kwan-Ze Actmax Technologies Inc. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 - 5,018 19.00% 5,018 -
The Company VAN MOOF Global Holding BV - Financial assets measured at fair value through other
comprehensive income- noncurrent		 780,000 shares 2,778 0.50% 2,778 -
T-CONN VAN MOOF Global Holding BV - Financial assets measured at fair value through other
comprehensive income- noncurrent		 780,000 shares 2,778 0.50% 2,778 -
SINBON USA
L.L.C		 HOTWIRE Development LLC - Financial assets measured at fair value through other
comprehensive income- noncurrent		 697,500 shares 886 5.00% 886 -
The Company Japan SINBON Electronics Co., Ltd. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 75 shares (111) 15.00% (111) -
The Company Bandrich, Inc. - Financial assets measured at fair value through other
comprehensive income- noncurrent		 330,000 shares 332 1.62% 332 -
The Company Nextronics Engineering Corp. - Financial asset measured at fair value through profit or
loss–current		 3,009,000 shares 123,821 9.86% 123,821 -
The Company Cayman Lan-Cheng Fund - Financial asset measured at fair value through profit or
loss–current		 30,000 shares 69,372 17.14% 69,372 -
The Company Nextronics Engineering Corp.
Private placement unsecured conversion
bonds		 - Financial asset measured at fair value through profit or
loss–current		 600,000 shares 57,204 - 57,204 -
The Company Trutankless, Inc. - Financial asset measured at fair value through profit or
loss–current		 200,000 shares 1,140 0.26% 1,140 -
Kwan-Ze Nextronics Engineering Corp. - Financial asset measured at fair value through profit or
loss–current		 3,000 shares 123 0.01% 123 -
Total $550,725

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

Note 2: The financial assets do not have quoted prices in an active market and their fair value cannot be reliably measured

-313-

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 2020.

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 $1,641,726 25.49% Trading condition is the same
as other supplier		 N/A N/A $(424,291) -29.64%
HKSB JYSB Associates Purchase $1,512,354 47.50% Trading condition is the same
as other supplier		 N/A N/A $(170,748) -22.95%
JYSB The Company Subsidiary Purchase $174,297 3.34% Trading condition is the same
as other supplier		 N/A N/A $(38,347) -2.18%
SZSB HKSB Associates Purchase $249,809 82.54% Trading condition is the same
as other supplier		 N/A N/A $(60,656) -92.81%
T-CONN T-CONN Zhongshan Associates Purchase $394,150 54.00% Trading condition is the same
as other supplier		 N/A N/A $(61,051) -19.00%
BJSB TongAn JSEM Associates Purchase $388,470 17.45% Trading condition is the same
as other supplier		 N/A N/A $(69,443) -8.81%
JSEM JYSB Associates Purchase $173,649 9.48% Trading condition is the same
as other supplier		 N/A N/A $(199,521) -14.92%
JYSB SINBON USA Associates Purchase $179,445 3.44% Trading condition is the same
as other supplier		 N/A N/A $(9,164) -0.52%
JYSB HKSB Associates Purchase $188,499 3.61% Trading condition is the same
as other supplier		 N/A N/A $(55,486) -3.16%
JSEM BJSB TongAn Associates Purchase $242,144 13.23% Trading condition is the same
as other supplier		 N/A N/A $(278,221) -20.80%

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 2020.

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 $424,291 9.26 $ - - $40,954 $ -
JYSB HKSB Associates $170,748 14.12 $ - - $63,087 $ -
JYSB JSEM Associates $199,521 0.82 $ - - $14,568 $ -
BJSB TongAn JSEM Associates $278,221 0.80 $ - - $12,850 $ -
The Company T-CONN Associates $592,343 1.69 $ - - $24,881 $ -

-314-

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 $1,641,726 (Note 4) 7.53%
1 JYSB The Company 2 Sales $1,641,726 (Note 4) 7.53%
2 HKSB JYSB 3 Purchase $1,512,354 (Note 4) 6.94%
1 JYSB HKSB 3 Sales $1,512,354 (Note 4) 6.94%
1 JYSB The Company 2 Purchase $174,297 (Note 4) 0.80%
0 The Company JYSB 1 Sales $174,297 (Note 4) 0.80%
4 SZSB HKSB 3 Purchase $249,809 (Note 4) 1.15%
2 HKSB SZSB 3 Sales $249,809 (Note 4) 1.15%
3 T-CONN T-CONN Zhongshan 3 Purchase $394,150 (Note 4) 1.81%
5 T-CONN Zhongshan T-CONN 3 Sales $394,150 (Note 4) 1.81%
6 BJSB TongAn JSEM 3 Purchase $388,470 (Note 4) 1.78%
7 JSEM BJSB TongAn 3 Sales $388,470 (Note 4) 1.78%
7 JSEM JYSB 3 Purchase $173,649 (Note 4) 0.80%
1 JYSB JSEM 3 Sales $173,649 (Note 4) 0.80%
1 JYSB SINBON USA 3 Purchase $179,445 (Note 4) 0.82%
8 SINBON USA JYSB 3 Sales $179,445 (Note 4) 0.82%
1 JYSB HKSB 3 Purchase $188,499 (Note 4) 0.86%
2 HKSB JYSB 3 Sales $188,499 (Note 4) 0.86%
7 JSEM BJSB TongAn 3 Purchase $242,144 (Note 4) 1.11%
6 BJSB TongAn JSEM 3 Sales $242,144 (Note 4) 1.11%

  • 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.

-315-

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2020 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2020: (Excluding investment in Mainland China)

Investor Investee company
(Note1)		 Address Main businesses and products Initial Investment Initial Investment Investment as of 31 December 2020 Investment as of 31 December 2020 Investment as of 31 December 2020 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% $808,212 $584,818 $584,818 Subsidiary
The Company Kwan-Ze New Taipei City, Taiwan Holding company $235,600 $235,600 25,200,000 shares 100.00% $642,709 $108,131 $108,131 Subsidiary
The Company Top Taiwan IV
Venture Capital Co.,
Ltd		 Taipei City, Taiwan Holding company $ - $22,400 - - $ - $117 $23 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% $4,256,603 $667,597 $667,597 Subsidiary
The Company Argosy Technologies
Co., Ltd.		 Hsinchu City,
Taiwan		 Produce and sells a variety of electronic
components, computers and peripheral
equipment		 $51,768 $30,648 3,174,598 shares 3.52% $129,014 $611,709 $21,807 Investee under the
equity method
The Company SINBON
USA
LLC		 4265 Gibson Dr., Tipp City , OH 45371,
USA		 Logistic center. USD5,159,000
$161,943		 USD5,159,000
$161,943		 - 100.00% $47,766 $(32,716) $(32,716) Subsidiary
The Company SINBON Europe
GmbH		 Pfarrkirchen, Germany Logistic center. EUR5,209,000
$185,241		 EUR5,209,000
$185,241		 - 100.00% $1,379 $(35,175) $(35,175) Subsidiary
The Company Radbon Avionics Inc. Miaoli County, Taiwan Manufacturing and selling signal cables
and cabin wiring.		 $33,000 $33,000 3,630,000 shares 55.00% $55,847 $33,868 $18,629 Subsidiary
The Company T-CONN Precision New Taipei City, Taiwan Manufacturing and selling a wide
variety of connectors, wires and cables.		 $166,066 $166,066 17,135,277 shares 61.18% $320,970 $177,188 $107,384 Subsidiary
The Company SB Hungary Hungary Selling,Producting and Processing a
wide variety of connectors and cables.		 EUR11,364,000
$394,296		 EUR1,080,000
$38,364		 - 100.00% $162,747 $(69,718) $(25,813) Subsidiary
T-CONN Precision S P L Mauritius Logistic center. $3,039 $3,039 - 100.00% $�9,190 USD(149,000)
$(4,408)		 $(4,363) Subsidiary
BJSB Tongan TWEM 1F., No. 15, Ln. 588, Guohua Rd., Miaoli
City, Miaoli County 36055, Taiwan
(R.O.C.)		 Produce and sells a wide variety of
connectors and cables.		 RMB2,308,000
$10,000		 $ - - 100.00% RMB1,462,000
$6,374		 RMB(846,000)
$3,627		 $ - Subsidiary
SINBON USA LLC SINBON Circuits &
Cables LLC		 815 South Brown School Road Vandalia,
OH 45377, USA		 Selling a wide variety of connectors and
cables.		 USD2,704,000 USD2,704,000 - 51.00% USD966,000
$27,543		 USD(1,435,000)
$(42,447)		 $ - Subsidiary
SINBON USA
L.L.C		 Worldwide
Wire Harnesses
Co.,Ltd.		 Samoa Logistic center. USD75,000 USD75,000 - 50.00% USD(32,000)
$(907)		 USD(114,000)
$(3,376)		 $ - Subsidiary

-316-

Attachment 7: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2020 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2020: (Excluding investment in Mainland China)

Investor Investee company
(Note1)		 Address Main businesses and products Initial Investment Initial Investment Investment as of 31 December 2020 Investment as of 31 December 2020 Investment as of 31 December 2020 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 )
Kwan-Ze Argocy Research Inc. Hsinchu City,
Taiwan		 Produce and sells a variety of electronic
components, computers and peripheral
equipment		 $201,451 $147,175 15,214,152 shares 16.89% $586,361 $611,709 $ - Investee under the
equity method
Worldwide
Wire Harnesses
Co., Ltd.		 STT U.S.A Tennessee Logistic center. USD140,000
$4,542		 USD140,000
$4,542		 - 100.00% USD(314,000)
$(8,943)		 USD(114,000)
$(3,376)		 $ - 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% $16,442 $5 $ - Investee under the
equitymethod
Argocy Research Inc. Ari International
(Singapore)Pte.,Ltd.
(AIS)		 Singapore Holding company $32,697 $32,697 - 100.00% $2,621 $(313) $ - Investee under the
equity method
Argocy Research Inc. Global Saber
Electronics Co., Ltd.		 Mauritius Selling a wide variety of connectors and
cables.		 $ - $ - - 100.00% $107,403 $33,980 $ - Investee under the
equity method
Argocy Research Inc. ROTEC LIMITED British Virgin Islands Holding company $268,479 $268,479 8,550 shares 77.38% $505,642 $46,994 $ - 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% $147,811 $46,994 $ - Investee under the
equity method
SINBON Europe
GmbH		 SINBON Electronic Germany Holding company $ - EUR5,184,000
$181,113		 - - $ - EUR(1,013,000)
$(33,507)		 $ - -
SINBON Electronic ET Germany Germany Logistic center. $ - EUR1,245,000
$44,225		 - - $ - EUR(558,000)
$(18,455)		 $ - -

Note 1: （ 1 ） "Investee company", "Address", "Main businesses and products", "Initial Investment" and "Investment as of 31 December 2020" shall be filled in appropriate fields according to the Company's reinvestment and the re-investment of the subsidiaries the Company directly or indirectly controls 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 nine-month period ended 31 December 2020.

  • （ 3 ） "Investment income (loss) recognized" requires only the investment income (loss) from the direct investees of the the Company and the investment income (loss) from investees valued under the equity method, and ensure that when recognizing the subsidiary's investment income (loss), the subsidiaries' re-investment income (loss) is included.

-317-

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 2020		 Investment Flows Investment Flows Accumulated Outflow
of Investment from
Taiwan as of
31 December 2020		 Net income (loss)
of investee
company		 Percentage of
Ownership		 Investment income
(loss) recognized		 Carrying Value as of
31 December 2020		 Accumulated
Inward
Remittance of
Earnings
as of
31 December 2020
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		 RMB1,041,000
$4,464		 85.53% RMB890,000
$3,818
Note 1		 RMB53,599,000
$233,646		 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		 USD19,645,000
$581,167		 100% USD19,645,000
$581,167
Note 1		 USD115,677,000
$3,297,711		 USD32,323,000
$989,011
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		 USD360,000
$10,644		 100% USD360,000
$10,644
Note 1		 USD5,553,000
$158,313		 USD2,887,000
$87,821
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		 USD545,000
$16,136		 100% USD545,000
$16,136
Note 1		 USD9,458,000
$269,629		 RMB26,100,000
$116,078
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		 USD2,139,000
$63,266		 100% USD2,139,000
$63,266
Note 1		 USD21,604,000
$615,884		 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% $ - $ - $ -
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% $ - $ - $ -
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		 $ - - $ - $ - $ -

-318-

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 2020		 Investment Flows Investment Flows Accumulated Outflow
of Investment from
Taiwan as of
31 December 2020		 Net income (loss)
of investee
company		 Percentage of
Ownership		 Investment income
(loss) recognized		 Carrying Value as of
31 December 2020		 Accumulated
Inward
Remittance of
Earnings
as of
31 December 2020
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.		 USD 8,700,000 Indirectly investment in
Mainland China through
companies registered in a third
region.		 USD 3,686,000
$117,529		 $ - $ - USD 3,686,000
$117,529		 $55,528 61.18% $34,250
Note 2		 $145,792 $ -
BJSB TongAn Manufacturing and selling a
wide variety of connectors,
wires and cables.		 RMB152,000,000 Indirectly investment in
Mainland China through
remittance from a third region.		 USD 3,000,000
$89,134		 $ - $ - USD 3,000,000
$89,134		 $631,889 85.53% $584,688
Note 1		 $1,988,100 USD21,105,000
$637,809
USD 52,087,000
USD 53,420,000
N/A(Note3)
Accumulated Investment in Mainland China as of
31 December 2020
Investment Amounts Authorized by
Investment Commission, MOEA
Upper Limit on Investment
Accumulated Investment in Mainland China as of
31 December 2020		 Investment Amounts Authorized by
Investment Commission, MOEA		 Upper Limit on Investment
USD 52,087,000 USD 53,420,000 N/A(Note3)

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

Note 2: The financial statements were audited by other independent accountants.

Note 3: According to Order No. Jing-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.

-319-

  • 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

  • 320 -

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:

ancial situation: Major causes and impact of material changes of assets, liabilities,
d shareholder equity in the last two years and future responsive plans:		 ancial situation: Major causes and impact of material changes of assets, liabilities,
d shareholder equity in the last two years and future responsive plans:		 ancial situation: Major causes and impact of material changes of assets, liabilities,
d shareholder equity in the last two years and future responsive plans:		 ancial situation: Major causes and impact of material changes of assets, liabilities,
d shareholder equity in the last two years and future responsive plans:		 ancial situation: Major causes and impact of material changes of assets, liabilities,
d shareholder equity in the last two years and future responsive plans:
Expressed in Thousands of NTD
Year
Item
2019		 2020 Difference
Amount Percentage
Current assets 13,568,882
19,087,028
5,518,146		 40.67
Fixed assets 2,154,817
2,701,729
546,912		 25.38
Other assets 353,925
323,964
(29,961)		 (8.47)
Total assets 17,184,967
23,683,043
6,498,076		 37.81
Current liabilities 8,823,257
11,793,084
2,969,827		 33.66
Long-term liabilities 7,956
1,567,545
1,559,589		 19,602.68
Total liabilities 9,387,754
13,914,910
4,527,156		 48.22
Capital stock 2,326,694
2,327,775
1,081		 0.05
Capital surplus 1,228,781
1,885,096
656,315		 53.41
Retained earnings 4,443,155
5,341,646
898,491		 20.22
Total equities 7,797,213
9,768,133
1,970,920		 25.28
Note:
(1) Current assets increase was caused by accounts receivable and inventory growth.
(2) Long-term liabilities increase because of the convertible bonds.
(3) Capital surplus increased was caused bychanges in ownershipinterests in subsidiaries.

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
2019 2020 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		 (48,193 )
		 17,934,363

(48,193 )

17,886,170
-

17,886,170
(13,296,502)

4,589,668
(56,834)







 21,854,376

(56,834)

21,797,542
-

21,797,542
(16,211,545)

5,585,997
3,920,013

(8,641)


3,911,372



3,911,372

(2,915,043)


996,329
21.86

17.93


21.87


21.87

21.92


21.71
  • 321 -

==> picture [465 x 378] intentionally omitted <==

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

2019 2020 Increased)
Variable
(reduced)
Subtotal Total Subtotal Total proportion %
amount
Plus: Beginning realized a
gross profit
   
Net operating gross profit 4,589,668 5,585,997 996,329 21.71
Operating expense (2,696,910) (2,936,820) (239,910) 8.90
   
Net operating margin 1,892,758 2,649,177 756,419 39.96
Non-operating income
276,405 78,689 (197,716) (71.53)
and expense
   
Income from Continuing
Operation before Income 2,169,163 2,727,866 558,703 25.76
Tax
Income tax expense (491,312) (544,366) (53,054) 10.80
   
Income from Continuing
Operation after Income 1,677,851 2,183,500 505,649 30.14
Tax
Addition/reduction variable analysis:
Non-operating income and expense decreased as the increase of exchange loss affected by U.S. dollar
appreciation.
----- End of picture text -----

7.3. Cash flows

7.3.1. Analysis of cash flows in the last two years

Year
Item		 Year
Item
2019
2019
2019		 2020 2020 Increase (reduction)
proportion		 Increase (reduction)
proportion
Cash flow ratio 19.21% 4.64% -14.57%
Cash flow adequacyratio 81.73% 44.90% -36.83%
Cash reinvestment ratio 6.95% -5.19% -12.14%
Note: The variable of cash flow adequacyratio was caused byincreasingcash dividends.
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
4,450,375
747,130
1,929,252
3,268,253
-
-

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.

  • 322 -

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
2020		 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.		 － －
Beijing SINBON
TongAn Renewable
EnergyCo.,Ltd.
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.
Operations of that
company brought
profits.		 －
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.		 － －
SINBON Hungary
Kft		 394,296 Cultivation of
customers in Europe.		 Operation losses and
in the beginning stage.		 Continuous
cultivation of local
customers.

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 2020, the recognized loss from the exchange were NT$162,248 thousands. We have implemented currency hedging to prevent the impact of exchange rate volatility on profits and losses.

  • 323 -

  • (3) Impact on profits and losses of inflation and future countermeasures in recent years

No unfavourable impact was reported in 2020.

  • 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 2020, we did not engage in high-risk, high-leverage investments.

  • (2) In 2020, 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$9,154,788 thousands. By the end of 2020, the balance of endorsements and guarantees was NT$1,544,577 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 2020, we invested a total of NT$683,312 thousand for R&D, with 8% 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

  • 324 -

  • 7.6.10. Impact and risk of mass share transfer or conversion of directors, supervisors, or major shareholders holding over 10% of shares and countermeasures: None.

  • 7.6.11. Impact and risk of 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.

  • 325 -

8. Special Notes

8.1. Information of affiliates

  • 8.1.1. Consolidated business reports of affiliates

  • (1) Affiliates organization chart

==> picture [433 x 378] 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.
  • 326 -
Name Establishment
Date		 Paid-in Capital Address The major scope of business
orproducts
Shanghai SINBON
Electronics Co., Ltd.
(Sales Office)		 1996.3.21 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 Renewable
Energy Co., Ltd.		 2012.02.16 RMB$152 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
  • 327 -
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$66 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$291.101 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
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.
Enmagic
Renewable Energy
Co., Ltd.		 2020.02.26 NTD 10 million
1F., No. 15, Ln. 588,
Guohua Rd., Miaoli
City, Miaoli County,
Taiwan(R.O.C.)		 Production and sales of
comprehensive electronic
connectors and cables.

  • 328 -

  • (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 Held
Shares Percentage
Beijing SINBON
Electronics Co.,
Ltd. (Factory)		 Chairman
Director
Supervisor		 Joseph Wang
Jun-Qiang Wang and Wei-Ming Liang
Chi-Chou Chang		 - 85.53%
Hong Kong
SINBON
Electronics Co.,
Ltd. (Contact
Office)		 Director Joseph Wang, Wei-Ming Liang, Huang-Ji Lin,
Chi-Chou Chang		 - 100.00%
Shanghai SINBON
Electronics Co.,
Ltd. (Sales Office)		 Chairman
Director
Supervisor		 Joseph Wang
Wei-Ming Liang, Xiu-Sui Lin
Chi-Chou Chang		 - 100.00%
SINBON
International
Enterprise
CompanyLimited		 Chairman Joseph Wang - 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		 - 100.00%
Shenzhen SINBON
Electronics Co.,
Ltd (Sales Office)		 Chairman
Director
Supervisor		 Joseph Wang
Wei-Ming Liang, Xiu-Sui Lin
Chi-Chou Chang		 - 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 CompanyLimited)		 23,560,000 shares 100.00%
Tong Cheng
SINBON
Electronics Co.,
Ltd.(Factory)		 Chairman
Director
Supervisor		 Wei-Ming Liang
Chi-Chou Chang, Guo-Cai Song
Wen-Sen Huang		 - 100.00%
Beijing SINBON
TongAn
Renewable Energy
Co., Ltd.		 Chairman
Director
Supervisor		 Joseph Wang
Jun-Qiang Wang, Wei-Ming Liarng,
Xiao-Hong Jiang and Mei Dong
Chi-Chou Chang, Bao-Lin Ma and Yong Cui		 - 85.53%
  • 329 -
Name Title Name or Representative Shares Held Shares Held
Shares Percentage
Worldwide Wire
Harnesses Co.,
Ltd.		 Director Wei-Ming Liang
Zi-Wei Lin
LESLIE ROY WELCH		 - 50.00%
SINBON
Technologies
Tennessee Co.,
LLC.		 Director Wei-Ming Liang
Zi-Wei Lin
LESLIE ROY WELCH		 - 50.00%
SINBON USA LLC. Chairman Chun-Yu Chen - 100.00%
SINBON Circuits &
Cables LLC		 Chairman
Director
Director
Director
Director		 Michael J. Seibert
Cynthial J. Seibert
Chun-Yu Chen
Jia Wei
Winnie Chen		 - 51.00%
Radbon Avionics
Inc.		 Chairman
Director
Director
Supervisor		 Qi-Zhong Cheng
Kuo-Hong Wang and Te-Cheng Chiu
(All are representatives of SINBON
International Enterprise Company Limited)
Xiu-Zhen Hsu and Ding-Guo Wang
(representative of National Chung-Shan
Institute of Science and Technology)
ZhengNan Lo and Min-ChengLin		 3,630,000 shares 55.00%
T-CONN Precision
Corporation		 Chairman
Director
Director
Director
Supervisor		 Xin-Chi Yeh
Joseph Wang
Chi-Chou Chang
(these three people are all representatives
of SINBON Electronics)
Gao-Ling Chiu (representative of Wistron
Corporation)
Te-Cheng Chiu and Lai-Hung Chang
Chi-Chou Chang		 17,135,277 shares 58.86%
T-CONN Precision
(Zhongshan)
Corporation		 Chairman
Director
Director
Supervisor		 Xin-Chi Yeh
Joseph Wang
Shi-Jie Chen
Chi-Chou Changand Chun-Yu Chen		 - 58.86%
Super Progressive
Limited		 Chairman Xin-Chi Yeh - 58.86%
SINBON Europe
GmbH		 Chairman Wen-Sang Huang - 100%
SINBON
HungaryKft		 Chairman Barrie Ryan - 100%
Jiangsu ENMAGIC
Energy Co., Ltd.		 Chairman
Director
Supervisor		 Wei-Ming Liang
Chi-Chou Chang, Jun-Qiang Wang
Ying Yan		 - 85.53%
Kunshan
ENMAGIC Energy
Co.,Ltd.		 Director
Supervisor		 Jun-Qiang Wang
Chi-Chou Chang		 - 85.53%
  • 330 -
Name Title Name or Representative Shares Held Shares Held
Shares Percentage
Enmagic
Renewable Energy
Co.,Ltd.		 Chairman
Director
Supervisor		 Joseph Wang
Wei-Ming Liang and Jun-Qiang Wang
Chi-Chou Chang		 1,000,000 shares 85.53%

(5) Operational performance of affiliates (2020)

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
53,773,586.93
174,262.25
53,599,324.68
-		 (2,069,194.19) 1,041,274.14 -
Hong Kong SINBON
Electronics Co., Ltd.
(Contact Office)
(HKD)		 95,606,400
797,998,706
563,041,993
234,956,713
924,965,987
137,129,250
136,099,282
-
Shanghai SINBON
Electronics Co., Ltd.
(Sales Office)
(RMB/CNY)		 25,401,762.00
55,566,506.55
19,051,348.69
36,515,157.86
102,120,049.64
2,864,611.88
2,482,775.67		 -
SINBON
International
Enterprise
Company
Limited(USD)		 52,781,715
152,846,695
-
152,846,695
-
-
22,689,362
-
Jiangyin SINBON
Electronics Co., Ltd
(Factory)
(RMB/CNY)		 286,025,460 1,317,990,440.59 561,488,041.55 756,502,399.04 1,834,181,233.55 174,934,591.90
135,561,358.46
-
Shenzhen SINBON
Electronics Co., Ltd
(Sales Office)
(RMB/CNY)		 17,924,154.88
81,485,852.46
19,632,379.84
61,853,472.62
83,103,038.01
4,140,800.70
3,763,860.32
-
Kwan-Ze
Corporation Ltd..
(TWD)		 252,000,000
643,893,547
1,184,788
642,708,759
-
(103,360)
108,130,494
-
Tong Cheng
SINBON Electronics
Co., Ltd. (Factory)
(RMB/CNY)		 95,050,300
264,180,855.84		 122,895,630.41 141,285,225.43
171,216,604.40		 16,024,554.36
14,757,218.07
-
  • 331 -
Name Authorized
Capital		 Total Assets Total
Liabilities		 Total Equity Operating
Revenue		 Operating
Income		 Current P/L
(after tax)		 EPS
(after
tax)
Beijing SINBON
TongAn Renewable
Energy Co., Ltd.
(RMB/CNY)		 152,000,000
938,885,466.11		 405,516,890.07 533,368,576.04
832,038,790.59		 128,176,133.73
147,392,728.75
-
SINBON USA LLC.
(USD)		 5,158,541
3,348,551
1,626,065
1,722,486
9,029,853
(457,754)
(1,097,511)
-
Radbon Avionics
Inc.(TWD)		 66,000,000
279,467,333
177,927,740
101,539,593
231,448,416
42,972,142
33,867,976
-
T-CONN Precision
Corporation(TWD
in Thousands)		 280,101
942,090
381,832
560,258
996,023
157,881
177,188
-
T-CONN Precision
(Zhongshan)
Corporation
(RMB/CNY)		 65,371,248
111,954,417
75,008,974
36,945,443
148,713,852
16,021,328
14,174,769
-
Super Progressive
Limited(USD)		 100,000
341,568
11,733
329,835
41,835
(148,386)
(149,028)
-
Worldwide Wire
Harnesses Co., Ltd.
(USD)		 150,000
250,147
313,756
(63,609)
-
-
(114,120)
-
SINBON
Technologies
Tennessee Co., LLC.
(USD)		 167,002
926,267		 948,910 (22,643)
1,046,338		 (60,165)
(60,165)
-
SINBON Europe
GmbH(EUR)		 5,208,773
42,796
3,463
39,333
155,000
(138,492)
(1,043,358)
-
SINBON
HungaryKft(KFT)		 21,000
3,909,913
3,588,812
307,791
2,775,468
(355,011)
(726,547)
-
Jiangsu ENMAGIC
Energy Co., Ltd.
(RMB/CNY)		 30,000,000
420,304,816.38		 348,073,790.00
72,231,026.38
500,763,428.75		 49,654,772.12
36,269,822.48
-
Kunshan ENMAGIC
Energy Co., Ltd.
(RMB/CNY)		 3,000,000
3,182,740
4,726
3,178,014
174,558
106,113
100,807
-
SINBON Circuits &
Cables LLC(USD)		 1,727,070
5,005,417
6,402,494
(1,397,077)
9,514,504
(2,317,350)
(1,434,843)
-
Enmagic
Renewable Energy
Co.,Ltd.(TWD)		 10,000,000
54,688,218
48,314,449
6,373,769
40,980,629
(4,574,112)
(3,626,231)
-
  • 332 -

8.1.2. Consolidated financial statement of subsidiaries

Statement of Compliance

SINBON’s consolidated financial statement for 2020 (period: January 1, 2020 to December 31, 2020), 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 19, 2021

  • 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.

  • 333 -

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