PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE YEARS ENDED 31 DECEMBER 2018 AND 2017

Address: No.582, Kuo-Hwa Rd., Miaoli 360, Taiwan, R.O.C. Telephone: 886-37-330-099

The reader is advised that parent company only financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

安永聯合會計師事務所

40341 台中市民權路239號7樓 7F. No. 239, Minquan Road Taichung City, Taiwan, R.O.C.

Tel: 886 4 2305 5500 Fax: 886 4 2305 5577 www.ey.com/taiwan

Independent Auditors' Report

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 2018 and 2017, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2018 and 2017, 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 2018 and 2017. and its financial performance and cash flows for the years ended 31 December 2018 and 2017, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2018 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.

$\overline{2}$

1. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

The amount of inventories of the Company and its subsidiaries was significant to the financial statements. As the fluctuation in market demand and the fast-changing technology could cause losses of obsolete and slow-moving inventories, the assessment of the inventory write-downs require significant management judgement. We therefore determined this a key audit mater.

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

2. Impairment of accounts receivable

As of 31 December 2018, gross accounts receivable and loss allowance by the Company amounted to NT\$1,078,454 thousand and NT\$1,166 thousand, respectively. Net accounts receivable accounted for 11% of total assets, which was considered material in the statements. Since the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, it is necessary to divide account receivables into groups in the process of measurement and analyze the application of related assumptions, including appropriate aging intervals, their respective loss rate, and consideration of the forward-looking information. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit mater.

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

Other Matter-Making Reference to the Audits of Component Auditors

We did not audit the financial statements of certain subsidiaries, associates and joint ventures accounted for under the equity methed. Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. These subsidiaries, associates and joint ventures under equity method amounted to NT\$704,258 thousand and NT\$680,836 thousand, both representing 7% of the total assets as of 31 December 2018 and 2017, respectively. The related shares of profits from the subsidiaries, associates and joint ventures under the equity method amounted to NT\$106,116 thousand and NT\$211,558 thousand, representing 6% and 15% of the income before tax for the years ended 31 December 2018 and 2017, respectively, and the related shares of other comprehensive income (loss) from the subsidiaries, associates and joint ventures under the equity method amounted to NT\$(1,727) thousand and NT\$13,934 thousand, representing $(6)$ % and $(24)$ % of the comprehensive income (loss) for the years ended 31 December 2018 and 2017, 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.

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.
1. 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.
1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
1. 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.
1. 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.

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 2018 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

Lin, Hung Kang

Ernst & Young, Taiwan

14 March 2019

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

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

		As of 31 December
Assets	Notes	2018	2017
Current assets
Cash and cash equivalents	4,6(1)	\$788,605	\$1,304,836
Financial assets at fair value through profit or loss, current	4,6(2)	166,623	56,690
Notes receivable, net		12,999	8,504
Accounts receivable, net	4,6(3)	1,076,956	1,046,967
Accounts receivable-related parties, net	4,6(3),7	332	9,926
Other receivables	7	130,595	87,529
Inventories	4,6(4)	623,774	563,277
Other current assets		40,673	59,320
Total current assets		2,840,557	3,137,049
Non-current assets
Financial assets at fair value through other comprehensive	4,6(5)	235,449
income, noncurrent
Available-for-sale financial assets, noncurrent	4,6(6)		132,170
Financial assets measured at cost, noncurrent	4,6(7)		318,167
Investments accounted for under the equity method	4,6(8)	6,439,454	5,740,523
Property, plant and equipment	4,6(9)	518,658	277,238
Deferred tax assets	4,6(21)	67,223	46,702
Other non-current assets	4,6(10)	24,773	155,386
Total non-current assets		7,285,557	6,670,186

Total assets

$$10,126,114$ $$9,807,235$

. . . . . . . .

(Continued)

$\bar{7}$

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS(Continued) 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

		As of 31 December
Liabilities and Equity	Notes	2018	$\overline{2017}$
Current liabilities
Short-term loans	4,6(11)	\$1,490,262	\$1,512,872
Financial liabilities at fair value through profit or loss, current	4,6(12)		44,427
Contract liabilities, current	4,6(16)	89,471
Notes payable			881
Accounts payable		588,473	503,930
Accounts payable-related parties	7	301,028	441,541
Other payables	7	288,845	245,587
Current tax liabilities		93,863	100,179
Current portion of bonds payable	4,6(13)	404,554
Other current liabilities		19,906	164,999
Total current liabilities		3,276,402	3,014,416
Non-current liabilities
Financial liabilities at fair value through profit or loss, noncurrent	4,6(11)		300
Bonds payable	4.6(13)		483,621
Deferred tax liabilities	4,6(21)	188,557	134,963
Net defined benefit obligation, noncurrent	4,6(14)	88,510	89,296
Other non-current liabilities-others		2	2
Total non-current liabilities		277,069	708,182
Total liabilities		3,553,471	3,722,598

Equity
Capital
Common stock	6(15)	2,257,273	2,254,162
Certificates of bond-to-stock conversion		9,681
Subtotal		2,266,954	2,254,162
Additional Paid-in Capital	6(15)	904,086	830,265
Retained earnings
Legal reserve		966,802	844,155
Special reserve		233,441	181,024
Unappropriated earnings		2,543,293	2,208,472
Subtotal		3,743,536	3,233,651
Other components of equity
Exchange differences on translation of foreign operations		(333,087)	(251, 893)
Unrealized gains or losses measured at fair value through other		(8, 846)
comprehensive income
Unrealized gains or losses on available-for-sale financial assets			18,452
Subtotal	4	(341.933)	(233, 441)
Total equity		6,572,643	6,084,637
Total liabilities and equity		$\overline{510,126,114}$	\$9,807,235

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended 31 December 2018 and 2017

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

		For the years ended 31 December
	Notes	2018	2017
Operating revenues	4,6(16),7	\$5,035,927	\$4,812,279
Operating costs	6(4,18),7	(3,750,712)	(3,594,518)
Gross profit-net		1,285,215	1,217,761
Operating expenses	6(18),7
Sales and marketing expenses		(298, 962)	(252, 276)
General and administrative expenses		(331, 699)	(255, 614)
Research and development expenses		(182, 695)	(179, 171)
Expected credit loss	6(17)	(696)
Subtotal		(814, 052)	(687,061)
Operating income		471,163	530,700
Non-operating income and expenses	6(19)
Other income		92,851	144,744
Other gains and losses		162,518	(84, 011)
Finance costs		(18.116)	(15, 847)
Share of profit or loss of subsidiaries, associates and joint ventures	4,6(8)	937,250	792,145
Subtotal		1,174,503	837,031
Income from continuing operations before income tax		1,645,666	1,367,731
Income tax expense	4,6(21)	(232, 189)	(141, 260)
Net income		1,413,477	1,226,471
Other comprehensive income	6(20)
Items that may not be reclassified subsequently to profit or loss
Remeasurements of defined benefit plans		(1,170)	(6,019)
Unrealized gains on equity instruments measured at fair value		110,611
through other comprehensive income
Unrealized gains on equity instruments method at fair value through other comprehensive income of associates and joint ventures		(2,107)
Income tax related to items that may not be reclassified subsequently		1,624	1,023
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		(103, 951)	(113, 473)
Unrealized gains on available-for-sale financial assets			28,973
Share of other comprehensive income of associates and joint ventures			13,964
Share of other comprehensive income of subsidiaries, associates and joint ventures			(30)
Income tax related to items that may be reclassified subsequently		22,757	18,149
Total other comprehensive loss, net of tax		27,764	(57, 413)
Total comprehensive income		\$1,441,241	\$1,169,058
Earnings per share (NTD)
Earnings per share-basic	4,6(22)	\$6.26	\$5.44
Earnings per share-diluted		\$6.10	\$5.36

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

$\sim$

		Capital		Retained earnings			Other components of equity
	Common stock	Certificates of Bond-to- Stock Conversion	Additional Paid-in Capital	Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) on Equity Instruments Measured at Fair Value through Other Comprehensive Income	Unrealized Gains or Losses on Available-For- Sale Financial Assets	Total Equity
Balance as of 1 January 2017	\$2,246,068	\$8,094	\$858,462	\$728,416	\$134,446	\$1,938,270	\$(156, 539)	$S -$	\$(24, 485)	\$5,732,732
Appropriation and distribution of 2016 retained earnings
Legal reserve				115,739		(115, 739)
Special reserve					46,578	(46, 578)
Cash dividends						(788, 956)				(788, 956)
Other changes in additional paid-in capital Embedded conversion options derrived from convertible bonds Share of changes in net assets of associates and joint ventures accounted for using the equity method Additional paid-in capital at cash dividends			14,652 2.235 (45,084)							14,652 2,235 (45,084)
Net income in 2017						1,226,471
Other comprehensive income (loss), net of tax in 2017						(4,996)	(95, 354)			1,226,471
Total comprehensive income (loss)		$\ddot{\phantom{0}}$		$\overline{\phantom{a}}$	$\bullet$	1,221,475	(95.354)	$\overline{a}$	42,937 42,937	(57, 413) 1,169,058
Bonds converted to stock	8,094	(8,094)
Balance as of 31 December 2017	\$2,254,162	$S -$	\$830,265	\$844,155	\$181,024	\$2,208,472	\$(251, 893)	$S -$	\$18,452	\$6,084,637
Balance as of 1 January 2018	\$2,254,162	$s -$	\$830,265	\$844,155	\$181,024	\$2,208,472	\$(251,893)	$S -$	\$18,452	\$6,084,637
Impact of retroactive applications						825		(120, 557)	(18, 452)	(138, 184)
Adjusted balance as of 1 Janurary 2018	2,254,162		830,265	844, 155	181,024	2,209,297	(251, 893)	(120, 557)	$\ddot{\phantom{a}}$	5,946,453
Appropriation and distribution of 2017 retained earnings
Legal reserve				122,647		(122, 647)
Special reserve					52,417	(52, 417)
Cash dividends						(901, 664)				(901, 664)
Other changes in additional paid-in capital
From differences between equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries			(87)							(87)
Net income in 2018						1,413,477				1,413,477
Other comprehensive income (loss), net of tax in 2018						454	(81, 194)	108,504		27,764
Total comprehensive income (loss)	$\overline{a}$			$\overline{a}$	$\sim$	1,413,931	(81, 194)	108,504	$\bullet$	1,441,241
Disposal of financial assets at fair value through other comprehensive income Bonds converted to stock						(3, 207)		3,207
Balance as of 31 December 2018	3,111	9,681	73,908							86,700
	\$2,257,273	\$9,681	\$904,086	\$966,802	\$233,441	\$2,543,293	\$(333,087)	\$(8, 846)	$S -$	\$6,572,643

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended 31 December 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended 31 December
	2018	2017
Cash flows from operating activities:
Net income before tax	\$1,645,666	\$1,367,731
Adjustments to reconcile net income before tax to net cash provided by operating activities:
Income and expense adjustments:
Depreciation	21,193	18,987
Amortization	3,748	5,648
Interest expense	18,116	15,847
Interest income	(3,299)	(3,225)
Dividends income	(16, 607)	(14, 882)
Expected credit losses	696
Share of profit of associates and joint ventures	(937, 250)	(792, 145)
Gain on disposal of property, plant and equipment		(48)
Loss on disposal of investments		4,110
(Gain) Loss of financial assets/liabilities at fair value through profit or loss	(83, 585)	27,166
Changes in operating assets and liabilities:
Acquisition of for trading financial asset		(836)
Proceeds from disposal of financial asset for trading		1,565
(Increase) Decrease in notes receivable	(4, 495)	8,689
(Increase) Decrease in accounts receivable	(21,091)	59,350
Increase in other receivables	(43, 012)	(847)
Increase in inventories, net	(60, 497)	(203, 214)
Decrease (Increase) in other current assets	18,647	(35, 171)
Increase in other noncurrent assets	(114, 133)	(147, 107)
(Decrease) Increase in notes payable	(881)	818
(Decrease) Increase in accounts payable	(55, 970)	43,767
Increase (Decrease) in other payables	43,216	(67, 681)
Increase in contract liability	89,471
(Decrease) Increase in other current liabilities	(145,093)	90,385
Decrease in accrued pension liabilities	(1,956)	(77)
Cash generated from operations	352,884	378,830
Interest received	3,245	3,298
Dividend received	16,607	14,882
Interest paid	(10, 420)	(9, 584)
Income tax paid	(181, 050)	(204, 798)
Net cash provided by operating activities	181,266	182,628

(Continued)

$\mathcal{A}^{\mathcal{A}}$

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued)

For the years ended 31 December 2018 and 2017

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended 31 December
	2018	2017
Cash flows from investing activities:
Acquisition of property, plant and equipment	\$(21,615)	\$(7,052)
Proceeds from disposal of property, plant and equipment		48
Proceeds from disposal of investments accounted for under the equity method		3,975
Decrease in investments accounted for under the equity method	35,004	40,000
Acquisition of investments accounted for under the equity method	(243, 693)	(169, 294)
Acquisition of financial assets at fair value through other comprehensive income	(646)
Proceeds from disposal of financial assets at fair value through other comprehensive incon	189,004
Decrease in financial assets at fair value through other comprehensive income	7,199
Acquisition of financial assets at fair value through profit or loss	(71,096)
Decrease in financial assets measured at cost		12,713
Proceeds from disposal of available-for-sale financial assets		430
Acqusition of financial assets measured at cost		(190, 443)
Disposal of financial assets measured at cost		279
Dividends received from investee company	8,310	14,050
Dividends received from subsidiaries	324,143	458,487
Net cash provided by investing activities	226,610	163,193
Cash flows from financing activities:
(Decrease) Increase in short-term loans	(22, 610)	42,803
Proceeds from bonds issued		500,000
Cash dividends	(901, 664)	(834,040)
Net cash used in financing activities	(924, 274)	(291, 237)
Effect of exchange rate changes on cash and cash equivalents	167
Net (decrease) increase in cash and cash equivalents	(516, 231)	54,584
Cash and cash equivalents at beginning of period	1,304,836	1,250,252
Cash and cash equivalents at end of period	\$788,605	\$1,304,836

SINBON ELECTRONICS CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS For the Years Ended 31 December 2018 and 2017 (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 14 March 2019.

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 endorsed by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after 1 January 2018. The nature and the impact of each new standard and amendment that has a material effect on the Company is described below:

(a) $IFRS$ 15 "Revenue from Contracts with Customers" (including Amendments to IFRS 15 "Clarifications to IFRS 15 Revenue from Contracts with Customers")

IFRS 15 replaces IAS 11 Construction Contracts, IAS 18 Revenue and related interpretations. In accordance with the transition provision in IFRS 15, the Company elected to recognize the cumulative effect of initially applying IFRS 15 at the date of initial application (1 January 2018). The Company also elected to apply this standard retrospectively only to contracts that are not completed contracts at the date of initial application.

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

The Company's principal activities consist of the sale of goods and rendering of services. The impacts arising from the adoption of IFRS 15 on the Company are summarized as follows:

A. Please refer to Note 4 for the accounting policies before or after 1 January 2018.
B. Before 1 January 2018, revenue from sale of goods was recognized when goods have been delivered to the buyer. Starting from 1 January 2018, in accordance with IFRS 15, the Company recognized revenue when (or as) the Company satisfies a performance obligation by transferring a promised good to a customer. IFRS 15 has no impact on the Company's revenue recognition from sale of goods. However, for some contracts, if the Company has the right to transfer the goods to customers but does not has a right to an amount of consideration that is unconditional, these contracts should be presented as contract assets, which is different from the accounting treatment of recognizing trade receivables before the date of initial application. In addition, loss allowance for contract assets was assessed in accordance with IFRS 9. To compare with the requirements of IAS 18, the abovementioned differences have no impact on the Company as at 31 December 2018.
C. Before 1 January 2018, revenue from rendering of services was recognized by reference to the stage of completion which was measured by reference to the proportion that contract cost incurred for work performed to date bear to the estimated total contract costs. Starting from 1 January 2018, in accordance with IFRS 15, the Company recognized revenue when (or as) the Company satisfies a performance obligation by transferring a promised service to a customer and also by reference to the stage of completion. IFRS 15 has no significant impact on the Company's revenue recognition from rendering of services.
D. For some rendering of services contracts, part of the consideration was received from customers upon signing the contract, then the Company has the obligation to provide the services subsequently. Before 1 January 2018, the Company recognized the consideration received in advance from customers under other current liabilities (Advanced Receipts). Starting from 1 January 2018, in accordance with IFRS 15, it should be recognized as contract liabilities. The amount reclassified from other current liabilities to contracts liabilities of the Company as at the date of initial application was NT\$133,277 thousand. In addition, compared with the requirements of IAS 18, other current liabilities decreased by NT\$89,471 thousand and the contract liabilities increased by NT\$89,471 thousand as at 31 December 2018.
E. Please refer to Notes 4, 5 and 6 for additional disclosure notes required by IFRS 15.

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

(2) IFRS 9"Financial Instruments"

IFRS 9 replaces IAS 39 Financial Instruments: Recognition and Measurement. In accordance with the transition provision in IFRS 9, the Company elected not to restate prior periods at the date of initial application (1 January 2018). The adoption of IFRS 9 has the following impacts on the Company:

A. The Company adopted IFRS 9 on 1 January 2018 and it adopted IAS 39 before 1 January 2018. Please refer to Note 4 for more details on accounting policies.
B. In accordance with the transition provision in IFRS 9, the assessment of the business model and classification of financial assets into the appropriate categories are based on the facts and circumstances that existed as at 1 January 2018. The classifications of financial assets and its carrying amounts as at 1 January 2018 are as follows:

IAS 39		IFRS 9
Measurement categories	Carrying amounts	Measurement categories	Carrying amounts
Fair value through profit or loss	\$56,690	Fair value through profit or loss	\$56,690
Fair value through other		Fair value through other	323,319
comprehensive income		comprehensive income
Available-for-sale financial	450,337
assets - noncurrent (including
NT\$318,167 thousand
measured at cost)
Subtotal	507,027	Subtotal	380,009
At amortized cost		At amortized cost (including cash	2,457,755
Loans and receivables	2,457,755	and cash equivalents, notes
(including cash and cash)		receivables, trade receivables and
equivalents, notes receivables,		other receivables)
trade receivables and other
receivables)
Total	\$2,964,782	Total	\$2,837,764

C. The transition adjustments from IAS 39 to IFRS 9 for the classifications of financial assets and financial liabilities as at 1 January 2018 are as follows:

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

IAS 39		IFRS 9			Retained	Other components
Class of financial instruments	Carrying amounts	Class of financial instruments	Carrying amounts	Difference	earnings Adjustment	of equity Adjustment
Financial assets at fair value through profit or loss (Note 1)
Held-for-trading	\$56,690	Measured at fair value through profit or loss	\$56,690	$\mathsf{\$}$ -	$\mathsf{\$}$ -	$\mathsf{\$}$ .
Fair value through other
comprehensive income Available-for-sale financial assets - noncurrent (including	450,337	Measured at fair value through other comprehensive	323,319	127,018	(825)	127,843
investments measured at cost with initial investment cost of NT\$318,167 thousand, reported as a separate line item)		income (equity instruments)
(Note 2) Subtotal	507,027	Subtotal	380,009	127,018	(825)	127,843

Loans and receivables (Note 3)		Financial assets measured at amortized costs
Cash and cash equivalents (exclude cash on hand)	1,304,829	Cash and cash equivalents (exclude cash on hand)	1,304,829
Notes receivables	8,504	Notes receivables	8,504
Trade receivables	1,056,893	Trade receivables	1,056,893
Other receivables	87,529	Other receivables	87,529
Subtotal	2,457,755	Subtotal	2,457,755
Total	\$2,964,782	Total	\$2,837,764	\$127,018	\$(825)	\$127,843

Notes:

(1) In accordance with IAS 39, financial assets classified as held for trading which are measured at fair value through profit or loss might include investments in funds and stocks of listed companies. In accordance with IFRS 9, as the cash flow characteristics for funds are not solely payments of principal and interest on the principal amounts outstanding and the Company assessed the facts and circumstances existed as at 1 January 2018, and determined they were held-for-trading; therefore, they were classified as financial assets mandatorily measured at fair value through profit or loss.

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

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

(2) In accordance with of IAS 39, the Company's available-for-sale financial assets include stocks of listed companies and stocks of unlisted companies. Adjustment details are described as follows:

a. Stocks (including listed and unlisted companies)

The Company assessed the facts and circumstances existed as at 1 January 2018, and determined these stocks were not held-for-trading; therefore, the Company elected to designate them as financial assets measured at fair value through other comprehensive income. As at 1 January 2018, the Company reclassified available-for-sale financial assets (including measured at cost) to financial assets measured at fair value through other comprehensive income in the amount of NT\$323,319 thousand. Other related adjustments are described as follows:

(a) The stocks of unlisted companies previously measured at cost in accordance with IAS 39 had an original cost of NT\$825 thousand, which was fully impaired. However, in accordance with IFRS 9, stocks of unlisted companies must be measured at fair value and shall not recognize impairment. The fair value of the stocks of unlisted companies was NT\$191,149 thousand as at 1 January 2018. Accordingly, the Company adjusted the carrying amount of financial assets measured at fair value through other comprehensive income of NT\$191,149 thousand and also adjusted the retained earnings and other equity by NT\$825 thousand and NT\$127,843 thousand, respectively.
(b)As at 1 January 2018, the Company reclassified the stocks of listed companies of NT\$132,170 thousand measured at fair value from available-for-sale financial assets to financial assets measured at fair value through other comprehensive income. This adjustment did not result in any differences in the carrying amounts of assets, but reclassified within equity accounts.
(3) In accordance with IAS 39, the cash flow characteristics for held-to-maturity investments and loans and receivables are solely payments of principal and interest on the principal amount outstanding. The assessment of the business model is based on the facts and circumstances that existed as at 1 January 2018. These financial assets were measured at amortized cost as they were held within a business model whose objective was to hold financial assets in order to collect contractual cash flows. Besides, in accordance with IFRS 9, there was no adjustment arising from the assessment of impairment losses for the aforementioned assets as at 1 January 2018. Therefore, there is no impact on the carrying amount as at 1 January 2018.
D. Please refer to Notes 4, 5, 6 and 12 for the related disclosures required by IFRS 7 and IFRS 9.

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

(3) IFRIC 22 "Foreign Currency Transactions and Advance Consideration"

The interpretation clarifies that when applying paragraphs 21 and 22 of IAS 21 "The Effects of Changes in Foreign Exchange Rates", in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the entity initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration.

The Company originally recorded their foreign currency sales transactions based on the exchange rate on the date of revenue recognition and converted into its functional currency. The exchange difference was recognized when the foreign currency advance payment was written off. The Company elected to apply this interpretation prospectively on 1 January 2018. This change in accounting principle did not significantly impact the Company's recognition and measurement.

(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:

		Effective Date
Items	New, Revised or Amended Standards and Interpretations	Issued by IASB
a	IFRS 16 "Leases"	1 January 2019
b	IFRIC 23 "Uncertainty Over Income Tax Treatments"	1 January 2019
c	IAS 28 "Investments in Associates and Joint Ventures" - Amendments to IAS28	1 January 2019
đ	Prepayment Features with Negative Compensation (Amendments to IFRS9)	1 January 2019
e	Improvements to International Financial Reporting Standards (2015 – 2017
	cycle)	1 January 2019
¢	Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)	1 January 2019

(a) IFRS $16$ "Leases"

The new standard requires lessees to account for all leases under one single accounting model (except for short-term or low-value asset lease exemptions), which is for lessees to recognize right-of-use assets and lease liabilities on the balance sheet and the depreciation expense and interest expense associated with those leases in the consolidated statements of comprehensive income. Besides, lessors' classification remains unchanged as operating or finance leases, but additional disclosure information is required.

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

(b) IFRIC 23 "Uncertainty Over Income Tax Treatments"

The interpretation clarifies application of recognition and measurement requirements in IAS 12 "Income Taxes" when there is uncertainty over income tax treatments.

The amendments clarify that an entity applies IFRS 9 to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture before it applies IAS 28, and in applying IFRS 9. does not take account of any adjustments that arise from applying IAS 28.

(d) Prepayment Features with Negative Compensation (Amendments to IFRS 9)

The amendment allows financial assets with prepayment features that permit or require a party to a contract either to pay or receive reasonable compensation for the early termination of the contract, to be measured at amortized cost or at fair value through other comprehensive income.

(e) Improvements to International Financial Reporting Standards (2015-2017 $cycle)$ :

IFRS 3 "Business Combinations"

The amendments clarify that an entity that has joint control of a joint operation shall remeasure its previously held interest in a joint operation when it obtains control of the business.

IFRS 11 "Joint Arrangements"

The amendments clarify that an entity that participates in, but does not have joint control of, a joint operation does not remeasure its previously held interest in a joint operation when it obtains joint control of the business.

IAS 12 "Income Taxes"

The amendments clarify that an entity shall recognize the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events.

IAS 23 "Borrowing Costs"

The amendments clarify that an entity should treats as part of general borrowings any borrowing made specifically to obtain an asset when the asset is ready for its intended use or sale.

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

(f) Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)

The amendments clarify that when a change in a defined benefit plan is made (such as amendment, curtailment or settlement, etc.), the entity should use the updated assumptions to remeasure its net defined benefit liability or asset.

The abovementioned standards and interpretations issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after January 2019. Apart from item (a) explained below, the remaining standards and interpretations have no material impact on the Company.

$(1)$ IFRS 16 "Leases"

IFRS 16 "Leases" replaces IAS 17 "Leases". IFRIC 4 "Determining whether an Arrangement contains a Lease", SIC-15 "Operating Leases -Incentives" and SIC-27 "Evaluating the Substance of Transactions Involving the Legal Form of a Lease". The impact arising from the adoption of IFRS 16 on the Company are summarized as follows:

A. For the definition of a lease, the Company elects not to reassess whether a contract is, or contains, a lease at the date of initial application (1 January 2019) in accordance with the transition provision in IFRS 16. Instead, the Company is permitted to apply IFRS 16 to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 but not to apply IFRS 16 to contracts that were not previously identified as containing a lease applying IAS 17 and IFRIC 4.

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

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

(a) Leases classified as operating leases

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

i. its carrying amount as if IFRS 16 had been applied since the commencement date, but discounted using the lessee's incremental borrowing rate on 1 January 2019; or
ii. an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the balance sheet immediately before 1 January 2019.

The Company expects the right-of-use asset will increase by NT\$22,354 thousand and the lease liability will increase by NT\$22,354 thousand on 1 January 2019.

(b) Leases classified as finance leases

None.

B. The additional disclosures of lessee and lessor required by IFRS 16 will be disclosed in the relevant notes.

(3) Standards or interpretations issued, revised or amended, by IASB but not yet endorsed by FSC are listed below:

Items	New, Revised or Amended Standards and Interpretations	Effective Date Issued by IASB
a	IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in	To be determined
	Associates and Joint Ventures" - Sale or Contribution of Assets between an	by IASB
	Investor and its Associate or Joint Ventures
b	IFRS 17 "Insurance Contracts"	1 January 2021
c.	Definition of a Business (Amendments to IFRS 3)	1 January 2020
d	Definition of Materiality (Amendments to IAS 1 and 8)	January 2020

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 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
(3) a risk adjustment for non-financial risk

NOTES TO PARENT COMPANY ONLY 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.

The amendments clarify the definition of a business in IFRS 3 Business Combinations. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or as an asset acquisition.

IFRS 3 continues to adopt a market participant's perspective to determine whether an acquired set of activities and assets is a business. The amendments clarify the minimum requirements for a business; add guidance to help entities assess whether an acquired process is substantive; and narrow the definitions of a business and of outputs; etc.

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

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

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company's financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Company is evaluating the impact of the standards and interpretations have no material impact on the Company.

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

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 2018 and 2017 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.

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.

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

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

(a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
(b) Foreign currency items within the scope of IFRS 9 Financial Instruments (Before 1 January 2018: IAS 39 Financial Instruments: Recognition and Measurement) are accounted for based on the accounting policy for financial instruments
(c) Exchange differences arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

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

(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:

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

(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.

(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.

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

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.

(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 (Before 1 January 2018: IAS 39 Financial Instruments: Recognition and Measurement) are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

(1) Financial instruments: Recognition and Measurement

The accounting policy from 1 January 2018 is as follows:

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

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

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.

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

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 other comprehensive income

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

A. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
B. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

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

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
i. Purchased or originated credit-impaired financial assets. For those financial assets, the 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.

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

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.

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.

The accounting policy before 1 January 2018 is as follows:

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

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

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

Financial assets at fair value through profit or loss

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

$\mathbf{i}$ 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 asset at fair value through profit or loss; or a financial asset may be designated as at fair value through profit or loss when doing so results in more relevant information. because either:

i. it eliminates or significantly reduces a measurement or recognition inconsistency; or
ii. a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Company is provided internally on that basis to the key management personnel.

Financial assets at fair value through profit or loss are measured at fair value with changes in fair value recognized in profit or loss. Dividends or interests on financial assets at fair value through profit or loss are recognized in profit or loss (including those received during the period of initial investment).

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

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

Available-for-sale financial assets

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

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

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

Held-to-maturity financial assets

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

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

Loans and receivables

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

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

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

(2) Impairment of financial assets

The accounting policy from 1 January 2018 is as follows:

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.

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.

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.

The accounting policy before 1 January 2018 is as follows:

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

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

Other loss events include:

i. significant financial difficulty of the issuer or obligor
ii. a breach of contract, such as a default or delinquency in interest or principal payments
iii. it becoming probable that the borrower will enter bankruptcy or other financial reorganization
iv. the disappearance of an active market for that financial asset because of financial difficulties

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

For held-to-maturity financial assets and loans and receivables measured at amortized cost, the Company first assesses individually whether objective evidence of impairment exists individually for financial asset that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exits for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows. The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. Interest income is accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.

Receivables together with the associated allowance are written off when there is no realistic prospect of future recovery. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to profit or loss.

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

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

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

(3) Derecognition of financial assets

A financial asset is derecognized when:

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

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.

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

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 (before 1 January 2018: IAS 39 Financial Instruments: Recognition and Measurement.

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

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

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments (before 1 January 2018: IAS 39 Financial Instruments: Recognition and Measurement) are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

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

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

i. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term
ii. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking
iii. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

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

i. it eliminates or significantly reduces a measurement or recognition inconsistency; or
ii. a group of financial assets, financial liabilities or both is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the 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.

Before 1 January 2018, if the financial liabilities at fair value through profit or loss do not have quoted prices in an active market and their fair value cannot be reliably measured, then they are classified as financial liabilities measured at cost on balance sheet and carried at cost as at the reporting date.

Financial liabilities at amortized cost

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

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

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

Derecognition of financial liabilities

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

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

(5) Offsetting of financial instruments

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

(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.

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

Before 1 January 2018, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognized in profit or loss. These embedded derivatives are separated from the host contract and accounted for as a derivative. The aforementioned policy are applicable to host contracts as financial liabilities or non-financial assets since 1 January 2018.

(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

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.

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

(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 on a first in, first out basis

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

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

Starting from 1 January 2018, rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

(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.

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

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.

Under the equity method, the investment in the associate is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the 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.

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.

$\ddot{\phantom{0}}$

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

The financial statements of the associate or joint venture are prepared for the same reporting period as the 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 2018: 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:

(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.

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

(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.

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

Items	Useful Lives
Buildings	$5 \sim 50$ years
Machinery and equipment	$3 \sim 15$ years
Transportation equipment	$5 \sim 10$ years
Office equipment	$3 \sim 10$ years
Other equipment	$2{\sim}15$ years
Leasehold improvements	Lower of leasehold vears 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.

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

$(13)$ Leases

Company as a lessee

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

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

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

(14) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

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

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:

	Computer software
Useful lives	$1 \sim 15$ years
Amortization method used	Amortized on a straight-line basis over the
	estimated useful life

Internally generated or acquired

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.

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.

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

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(16) Provisions

Provisions are recognized when the 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.

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.

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

Sales returns and allowances

Starting from 1 January 2018, sales returns and allowances are accounted in accordance with IFRS 15. Before 1 January 2018, a provision has been recognized for sales returns and allowances based on past experience and other known factors.

(17) Revenue recognition

The accounting policy from 1 January 2018 is as follows:

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.

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.

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

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.

The accounting policy before 1 January 2018 is as follows:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable. The following specific recognition criteria must also be met before revenue is recognized:

Sale of goods

Revenue from the sale of goods is recognized when all the following conditions have been satisfied:

(a) the significant risks and rewards of ownership of the goods have passed to the buyer
(b) neither continuing managerial involvement nor effective control over the goods sold have been retained
(c) the amount of revenue can be measured reliably
(d) it is probable that the economic benefits associated with the transaction will flow to the entity
(e) the costs incurred in respect of the transaction can be measured reliably

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

Rendering of services

Revenue from construction for solar photovoltaic power generation system is recognized by reference to the stage of completion. Stage of completion is measured by reference to the proportion that contract cost incurred for work performed to date bear to the estimated total contract costs. Where the contract outcome cannot be measured reliably, revenue is recognized only to the extent that the expenses incurred are eligible to be recovered.

Interest income

For all financial assets measured at amortized cost (including loans and receivables and held-to-maturity financial assets) and available-for-sale financial assets, interest income is recorded using the effective interest rate method and recognized in profit or loss.

Dividends

Revenue is recognized when the Company's right to receive the payment is established.

(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.

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.

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

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.

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.

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.

$5₁$ Significant accounting judgments, estimates and assumptions

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

Estimates and assumptions

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

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.

كالمداد والمتحدد والمستنقذ المتحدث والمتحدث والمتحدث

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

Starting from 1 January 2018:

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.

Before1 January 2018:

The Company considers the estimation of future cash flows when there is objective evidence showing indications of impairment. The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. However, as the impact from the discounting of short-term receivables is not material, the impairment of short-term receivables is measured as the difference between the asset's carrying amount and the estimated undiscounted future 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.

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

6. Contents of significant accounts

(1) Cash and cash equivalents

		As of 31 December
	2018	2017
Cash on hand	\$22	\$7
Demand deposits	696,858	1,147,852
Time deposits	91,725	156,977
Total	\$788,605	\$1,304,836

$\bar{z}$

(2) Financial assets at fair value through profit or $loss$ – current

	As of 31 December
	2018	2017(Note)
Financial assets mandatorily at fair value through profit or loss:
Funds	\$154,072
Cross currency swap	9,873
Stocks	2,596
Embedded derivative-bond	82
Total	\$166,623
	As of 31 December
	$2018$ (Note)	2017
Held for trading:
Non-derivative financial assets
Fund		\$52,909
Stocks		3,781
Total		\$56,690

Note: The Company adopted IFRS 9 on 1 January 2018. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 9.

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

$\bar{a}$

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

	As of 31 December
	2018	2017
Trade receivables	\$1,078,122	\$1,047,437
Less: loss allowance	(1,166)	(470)
subtotal	1,076,956	1,046,967
Accounts receivable – related parties	332	9,926
Total	\$1,077,288	\$1,056,893

. . . . . . . . . . . . . . . . . . . .

(3) Accounts receivables and accounts receivable - related parties

Trade receivables were not pledged.

Trade receivables are generally on 60-120 day terms. The Company adopted IFRS 9 for impairment assessment on 1 January 2018. Please refer to Note 6(17) for more details on impairment of trade receivables. The Company adopted IAS 39 for impairment assessment before 1 January 2018. The movements in the provision for impairment of trade receivables and trade receivables-related parties for the year ended 31 December 2017 are as follows: (Please refer to Note 12 for more details on credit risk management.)

	Individually	Collectively
	impaired	impaired	Total
As of 1 January 2017	\$ -	\$442	\$442
Write-off for uncollectable accounts	-	$\blacksquare$
Charge (reversal) for the current period	$\blacksquare$	28	28
As of 31 December 2017		\$470	\$470

There was no impairment loss of individually accounts receivable for the year ended 31 December 2017.

Ageing analysis of trade receivables as follows:

As of	Neither past due nor			Past due but not impaired
31 December	impaired				$\leq$ 30 days 31~60 days 61~90 days 91~120 days >=121 days	Total
2017	\$1,046,414	\$8,011	\$2,325		\$143	$$ - $1,056,893$

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

(4) Inventories

	As of 31 December
	2018	2017
Raw materials	\$159,485	\$159,759
Work in progress	19,440	21,186
Finished goods	268,622	256,324
Merchandise	176,227	126,008
Total	\$623,774	\$563,277

The inventory cost recognized as expenses for the years ended 31 December 2018 and 2017 were NT\$3,750,712 thousand and NT\$3,594,518 thousand, respectively. The price (recovery) reduction of inventories related to cost of goods sold were NT\$(1,712) thousand and NT\$2,731 thousand.

Gain from price recovery of inventories was due to the sale of obsolete products and the net realized value recovery for the year ended 31 December 2017.

Inventories were not pledged.

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

	As of 31 December
	2018	$2017$ (Note)

Equity instrument investments measured at fair
value through other comprehensive income -
Non-current
Emerging companies stocks	\$15,698
Unlisted companies stocks	219,751
Total	\$235,449

Note: The Company adopted IFRS 9 on 1 January 2018. The Company elected not to restate period periods in accordance with the transition provision in IFRS 9.

$\bar{.}$

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

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

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

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

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

Due to the transfer of equity structure, the Company transfer all of HOTWIRE Development LLC's shares which were reported under equity instrument investments measured at fair value through other comprehensive income to Sinbon USA L.L.C. on 31 December 2018.

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

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

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

	As of 31 December
	$2018$ (Note)	2017
INPAQ Technology Co., Ltd.		\$168,381
Gongwin Biopharm Holdings Co., Ltd.		18,296
Less: unrealized loss on available -for-sale		(46, 516)
financial assets
Less: accumulated impairment- available-for-sale		(7,991)
financial assets
Total		\$132,170

Note: The Company adopted IFRS 9 on 1 January 2018. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 9.

On 8 February 2017, Gongwin Biopharm Holdings Co., Ltd. was listed on the TPEx Emerging Stock Market. The Company investment was previously measured at cost but later changed to fair value while the investment was recognized as available-for-sale financial assets-noncurrent in accordance with IAS 39 adopted before 1 January 2018. The Company disposed of 5,000 shares on 23 February 2017. A cash consideration of NT\$430 thousand was received and the Company has recognized gain on disposal of investment amounting to NT\$41 thousand.

The Company adopted IAS 39 before 1 January 2018 and classified certain financial assets as available-for-sale financial assets. Available-for-sale financial assets were not pledged.

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

	As of 31 December
	2018(Note)	2017
Financial assets at fair value through profit or loss
Chengding Venture Capital Co., Ltd.		\$150,000
Top Taiwan Venture Capital Co., Ltd.		60,000
HOTWIRE Development LLC		32,653
Top Taiwan VII Venture Capital Co., Ltd.		24.934
General Research of Electronics Inc.		23.184
Top Taiwan III Venture Capital Co., Ltd.		8.130
Top Taiwan II Venture Capital Co., Ltd.		7,750
Dynahz Technologies Co., Ltd.		6,150
Bandrich, Inc.		4,125
Japan Sinbon Electronics Co., Ltd.		2,066
Subtotal		318,992
Less: accumulated impairment		(825)
Total		\$318,167

(7) Financial assets measured at $cost$ – noncurrent

Note: The Company adopted IFRS 9 on 1 January 2018. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 9.

The Company adopted IAS 39 before 1 January 2018. The above investments in the equity instruments of unlisted entities are measured at cost as the fair value of these investments are not reliably measurable due to the fact that the variability in the range of reasonable fair value measurements is significant for that investment and that the probabilities of the various estimates within the range cannot be reasonably assessed and used when measuring fair value.

The return of paid-in capital for capital reduction from Top Taiwan II Venture Capital Co., Ltd., Top Taiwan III Venture Capital Co., Ltd. and Top Taiwan VII Venture Capital Co., Ltd. for the year ended 31 December 2018 were NT\$1,000 thousand, NT\$5,285 thousand and NT\$6,428 thousand, respectively.

On 24 May 2017, the Company disposed of the shares of Sinbon Czech a.s. and a cash consideration of NT\$279 thousand was received.

The Company invested NT\$150,000 thousand in Chengding Venture Capital Co., Ltd. on 30 October 2017.

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

On 31 March 2017, the Company invested NT\$40,443 thousand in Cayman Lan-Chen Fund. Considering its investment strategy, the Company decided to reclassify the fund adopting IAS 39 prior to 1 July 2018 to financial assets held for trading on 31 December 2017.

Financial assets measured at cost were not pledged.

(8) Investments accounted for using the equity method

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

			As of 31 December
	2018		2017
Investees	Amount	%	Amount	$\%$
Investments in subsidiaries:
Sinbon International Enterprise Co., Ltd. (SB(BVI))	\$3,663,702	100.00	\$3,159,164	100.00
Beijing Sinbon Tongan Electronics Co., Ltd. (BJSB Tongan)	1,294,388	100.00	1,093,652	100.00
Hong Kong Sinbon Electronics Co., Ltd. (HKSB)	477,520	100.00	508,558	100.00
Kwan-Ze Corporation Ltd. (Kwan-Ze)	348,679	100.00	335,588	100.00
Beijing Sinbon Electronics Co., Ltd. (BJSB)	226,114	100.00	226,582	100.00
Sinbon Europe GmbH (EuropeSB)	110,496	100.00	164,557	100.00
T-CONN Precision Co., Ltd. (T-CONN)	153,467	62.52	68,107	64.48
Sinbon USA L.L.C. (Sinbon USA)	61,182	100.00	65,492	100.00
Radbon Avionics Inc. (Radbon)	30,527	55.00	8,157	90.00
Super Elite Ltd. (SEL)	108	64.48	15,259	64.48
Worldwide Wire Harnesses Co., Ltd. (SST)			6,495	50.00
Subtotal	6,366,183		5,651,611
Investments in associates:
Argocy Research Inc.	49,210	3.59	46,996	3.59
Top Taiwan IV Venture Capital Co., Ltd.	24,061	20.00	41,916	20.00
Subtotal	73,271		88,912
Total	\$6,439,454		\$5,740,523

On 28 December 2018, the Company invested additional NT\$34,648 thousand in Sinbon USA LLC due to the transfer of equity structure.

Worldwide Wire Harnesse Co., Ltd. was originally held by the Company. It is now held by Sinbon USA due to the transfer of equity structure for the year ended 31 December 2018.

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

On 21 September 2018 and 9 November 2018, T-CONN raised capital. The Company invested additional NT\$44,685 thousand and NT\$15,609, respectively; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 64.48% to 62.25%.

On 25 April 2018 and 15 Octobor 2018, The Company invested additional NT\$59,216 thousand and NT\$92,757 thousand in Sinbon International Enterprise Co., Ltd., respectively.

Since 5 September 2018, after signing the transfer agreement, the shareholders' rights and obligations of BJSB have been transferred to BJSB Tongan. On 2 January 2019, the change of registration was completed and approved by SAIC. BJSB was originally held by the Company. It is now held by BJSB Tongan.

On 18 January 2018, the Company acquired additional 300 thousand shares of Radbon hence raising its ownership to 100%. On 27 June 2018, Radbon raised cash capital with 3,000 shares; however, the Company did not acquire shares according to the shareholding percentage. Therefore, its ownership dropped from 100% to 55%.

The return of paid-in capital for capital reduction from Top Taiwan IV Venture Capital Co., Ltd., Radbon Avionics Inc. and Super Elite Ltd. for the years ended 31 December 2018 were NT\$17,600 thousand, NT\$1,775 thousand and NT\$15,629 thousand, respectively.

In purpose of developing Europe market, the Company invested NT\$123,498 in Sinbon Europe GmbH on 12 July 2017.

On 30 September 2017, the Company disposed of 55% interest in its subsidiary - JPSB and lost control of the entity. The cash consideration was NT\$3,975 thousand and the Company has recognized loss on disposal of investment amounting to NT\$(4,151) thousand. Therefore, its ownership dropped to 15%. The Company investment was previously measured at equity method but later changed to cost while the investment was recognized as financial assets measured at cost.

T-CONN Precision Co., Ltd. and Super Elite Ltd. were originally held by the Company. T-CONN is now held by SEL due to the transfer of equity structure of SEL for the years ended 31 December 2017.

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

In order to expand the prodoction in US, the Company invested additional NT\$30,940 thousand in Sinbon USA LLC on 12 Octobor 2017.

For the year ended 31 December 2017, the Company invested additional NT\$14,856 thousand in Sinbon International Enterprise Co., Ltd.

The return of paid-in capital for capital reduction from Top Taiwan IV Venture Capital Co., Ltd. for the years ended 31 December 2017 was NT\$40,000 thousand.

(1) For the years ended December 31, 2018 and 2017, 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:

	For the years ended 31 December
	2018		2017
	Exchange differences			Exchange differences
	Investment income	on translation of Foreign	Investment income	on translation of Foreign
Investees	$(\text{loss})$	operations	(loss)	operations
Investments in subsidiaries: Sinbon International Enterprise Co., Ltd. (SB(BVI))	\$465,726	\$(84,294)	\$321,943	\$(49,386)
Beijing Sinbon Tongan Electronics Co., Ltd. (BJSB Tongan)	378,553	(23, 897)	241,128	(7,094)
Hong Kong Sinbon Electronics Co., Ltd. (HKSB)	71,274	14,651	176,249	(39, 786)
Kwan-Ze Corporation Ltd. (Kwan-Ze)	53,981	(2,168)	45,375	(625)
Japan Sinbon Electronics Co., Ltd. (JPSB)			2,858	433
Worldwide Wire Harnesses Co., Ltd. (SST)	(4, 797)	297	15	(528)
Sinbon USA L.L.C. (Sinbon USA)	(9, 860)	(328)	(13, 801)	(4, 859)
Beijing Sinbon Electronics Co., Ltd. (BJSB)	4,925	(5,393)	8,908	(6,979)
Super Elite Ltd. (SEL)	(5)	483	(30)	(6,130)
Radbon Avionics Inc. (Radbon)	(6,761)		(8, 196)
T-CONN Precision Co., Ltd. (T-CONN)	24,233	400	25,836	(30)
Sinbon Europe GmbH (EuropeSB)	(50, 628)	(3, 433)	(17, 643)	1,607
Subtotal	926,641	(103, 682)	782,642	(113, 377)
Investments in associates:
Argocy Research Inc.	4		887
Top Taiwan IV Venture Capital Co., Ltd.	10,605	(437)	8,616	(126)
Subtotal	10,609	(437)	9,503	(126)
Total	\$937,250	\$(104,119)	\$792,145	\$(113,503)

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\$88,204 thousand, NT\$94,094 thousand as of 31 December 2018 and 2017.

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:

	For the years ended 31 December 2018 2017


Profit from continuing operations	\$10,609	\$9,503
Other comprehensive income (post-tax)	(2,107)	13,964
Total comprehensive income	\$8,502	\$23,467

The associates had no contingent liabilities or capital commitments as of 31 December 2018 and 2017.

Our audit, insofar as it related to the investments accounted for under the equity method amounting to NT\$704,258 thousand and NT\$680,836 thousand as of 31 December 2018 and 2017; the related shares of investment income from the associates and joint ventures amounted to NT\$106,116 thousand and NT\$211,558 thousand for the years ended 31 December 2018 and 2017, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT\$(1,727) thousand and NT\$13,934 thousand for the years ended 31 December 2018 and 2017, respectively; are based solely on the reports of other independent accountants.

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

(9) Property, plant and equipment

			Machinery	Office	Transportation	Other	Leasehold
	Land	Buildings	equipment	equipment	equipment	equipment	improvements	Total
Cost:
As of 1 January 2018	\$150,430	\$212,443	\$90,264	\$26,092	\$1,145	\$3,917	\$6,635	\$490,926
Additions		5,685	8,585	2,204		4,617	524	21,615
Disposals		(4, 826)	(2,059)	(164)		(87)		(7, 136)
Other changes		194,868	39,744	1,501		4,885		240,998
As of 31 December 2018	\$150,430	\$408,170	\$136,534	\$29,633	\$1,145	\$13,332	\$7,159	\$746,403
As of 1 January 2017	\$150,430	\$210,353	\$95,098	\$24,490	\$1,145	\$3,917	\$5,394	\$490,827
Additions		2,090	2,129	2,071			762	7,052
Disposals			(7,305)	(469)				(7, 774)
Other changes			342				479	821
As of 31 December 2017	\$150,430	\$212,443	\$90,264	\$26,092	\$1,145	\$3,917	\$6,635	\$490,926
Depreciation and impairment:
As of 1 January 2018	$\hat{\mathbf{s}}$ .	\$105,400	\$80,126	\$18,482	\$684	\$3,396	\$5,600	\$213,688
Depreciation		9,387	6,620	3,523	191	1,004	468	21,193
Disposals		(4, 826)	(2,059)	(164)		(87)		(7, 136)
As of 31 December 2018	$\hat{\mathbf{s}}$ -	\$109,961	\$84,687	\$21,841	\$875	\$4,313	\$6,068	\$227,745
As of 1 January 2017	$\hat{\mathbf{s}}$ .	\$97,607	\$80,718	\$15,721	\$493	\$2,668	\$5,268	\$202,475
Depreciation		7,793	6,713	3,230	191	728	332	18,987
Disposals			(7, 305)	(469)				(7, 774)
As of 31 December 2017	$\mathsf{\$}$ .	\$105,400	\$80,126	\$18,482	\$684	\$3,396	\$5,600	\$213,688
Net carrying amount as of:
31 December 2018	\$150,430	\$298,209	\$51,847	\$7,792	\$270	\$9,019	\$1,091	\$518,658
31 December 2017	\$150,430	\$107,043	\$10,138	\$7,610	\$461	\$521	\$1,035	\$277,238

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.

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

	As of 31 December
	2018	2017
Prepayment for equipment	\$16,683	\$145,910
Refundable deposits	4,935	4,386
Long-term prepaid rent	2,401	4.336
Other long-term investment	600	600
Other assets	154	154
Total	\$24,773	\$155,386

(10) Other non-current assets

No other non-current assets were pledged.

(11) Short-term loans

		As of 31 December
	2018	2017
Unsecured bank loans	\$1,490,262	\$1,512,872

	As of 31 December
	2018	2017
Interest rates applied	$0.60\% - 0.80\%$	0.40%-0.95%

The Company's unused short-term lines of credits amounted to NT\$373,927 thousand and NT\$473,632 thousand as of 31 December 2018 and 2017, respectively.

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

	As of 31 December
	2018	2017
Held for trading:
Derivatives not designated as hedging
Instruments
Cross currency swap	$\mathbf{\$}$ -	\$44,427
Embedded derivatives-bond		300
Total	$S -$	\$44,727

Current	\$-	\$44,427
Non-current		300
Total	\$ -	\$44,727

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

(13) Bonds payable

	As of 31 December
	2018	2017
Liability component:
Principal amount	\$411,600	\$500,000
Discounts on bonds payable	(7,046)	(16, 379)
Subtotal	404,554	483,621
Less: current portion	(404, 554)
Net	\$ -	\$483,621
Embedded derivative	\$(82)	\$300
Equity component	\$12,061	\$14,652

$\lambda \lambda \lambda =$

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 $\sim$ 8 June 2020

Redemption clauses:

(1) The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (9 September 2017) and prior to 40 days before the maturity date (29 April 2020), at the principal amount of the bonds with an interest calculated at the rate of 0% per annum (early redemption conversion price) if the closing price of the Company's ordinary shares on the Taiwan Stock Exchange (TWSE) for a period of 30 consecutive trading days, is at least 130% of the conversion price.
(2) The Company may redeem the bonds, in whole or in part, after 3 months of the issuance (9 September 2017) and prior to 40 days before the maturity date (29 April 2020), at the early redemption conversion price if at least 90% in principal amount of the bonds has already been exchanged, redeemed, purchased or cancelled.

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

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

Reversal clauses:

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

Terms of Exchange:

a. Underlying Securities: Common shares of the Company
b. Exchange Period: The bonds are exchangeable at any time on or after 9 September 2017 and prior to 8 June 2020 into common shares of the Company.
c. Exchange Price and Adjustment: The exchange price was originally NT\$76.6 per share. The exchange price will be subject to adjustments upon the occurrence of certain events set out in the indenture.

In accordance with IFRS 9, said financial instrument is classified as an embedded derivative so the exercise price of the embedded put option is allocated to the liability component and equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. The difference between the equity component and the book value was recognized in profit or loss. The difference between the liability component and the book value was recognized in "Share" premium-warrants". The financial assets (liabilities) of convertible bonds are measured at amortized cost, fair value through profit or loss amounted to NT\$82 thousand and NT\$(300) thousand as of 31 December 2018 and 2017.

The convertible bonds that have already been converted were NT\$88,400 thousand and NT\$0 thousand as at 31 December 2018 and 2017.

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

(14) 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 2018 and 2017 were NT\$20,605 thousand and NT\$19,198 thousand, respectively.

Defined benefits plan

The Company adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contribute an amount equivalent to 2% of the employees' total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Company will make up the difference in one appropriation before the end of March the following year.

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

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under discretionary accounts, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT\$4,560 thousand to its defined benefit plan during the 12 months beginning after 31 December 2018.

The weighted average duration of the defined benefits obligation was 15 years as of 31 December 2018.

Pension costs recognized in profit or loss are as follows:

	For the years ended 31 December

	2018	2017
Current service costs	\$1,340	\$1,577
Net interest on the net defined benefit liabilities	1.185	1,311
Total	\$2,525	\$2,888

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

	As of
	31 Dec. 2018 31 Dec. 2017		1 Jan. 2017
Defined benefit obligation	\$144,516	\$147,616	\$147,969
Plan assets at fair value	(56,006)	(58,320)	(64, 615)
Net defined benefit liabilities, noncurrent	\$88,510	\$89,296	\$83,354

للأرباء والمتوسط ورباد

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

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

$\bar{\omega}$

ستفاد المنادر

		As of
			Net defined
	Defined benefit	Plan assets at	benefit
	obligation	fair value	liabilities
As of 1 January 2017	\$147,969	\$(64,615)	\$83,354
Current service cost	1,577		1,577
Interest expense (income)	2,368	(1,057)	1,311
Subtotal	151,914	(65, 672)	86,242
Remeasurements of the defined benefit liabilities
/assets:
Actuarial gains and losses arising from changes in	4,660		4,660
demographic assumptions
Experience adjustments	971		971
Remeasurements of the defined benefit assets		388	388
Subtotal	5,631	388	6,019

Payments of benefit obligation	(9,929)	9,929
Contributions by employer		(2,965)	(2,965)
As of 31 December 2017	147,616	(58, 320)	89,296
Current period service costs	1,340		1,340
Interest expense (income) Subtotal	1,992	(807)	1,185
Remeasurements of the defined benefit liabilities	150,948	(59, 127)	91,821
/assets:
Actuarial gains and losses arising from changes in	4,248		4,248
demographic assumptions
Experience adjustments	(1,300)		(1,300)
Remeasurements of the defined benefit assets		(1,778)	(1,778)
Subtotal	2,948	(1,778)	1,170
Payments of benefit obligation	(9,380)	9,380
Contributions by employer		(4, 481)	(4, 481)
As of 31 December 2018	\$144,516	\$(56,006)	\$88,510

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

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

	As of 31 December
	2018	2017
Discount rate	1.10%	1.35%
Expected rate of salary increases	3.00%	3.00%

Sensitivity analysis for significant assumption are shown below:

	For the years ended 31 December
		2018		2017
	Defined	Defined	Defined	Defined
	benefit	benefit	benefit	benefit
	obligation	obligation	obligation	obligation
	increase	decrease	increase	decrease
Discount rate increase by 0.50%	$\mathbb{S}$ -	\$8,320	\$ -	\$9,123
Discount rate decrease by 0.50%	9,065		9.958
Future salary increase by 1.00%	18,380	$\bullet$	20,263
Future salary decrease by 1.00%		15,837		17,391

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

$(15)$ Equity

a sa sila

(a) Common stock

The Company's authorized capital was NT\$4,500,000 thousand as of 31 December 2018 and 2017. The paid-in capital was NT\$2,257,273 thousand and NT\$2,254,162 thousand, divided into 225,727 and 225,416 thousand shares with par value of NT\$ 10 each, respectively. Each share has one voting right and a right to receive dividends.

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

The investors requested to convert the Company's convertible bonds into common stocks by issuing new common shares from 1 January 2018 to 31 December 2018 amount to NT\$12,792 thousand in a total of 1,279 thousand shares and had been completed the registration process for 311 thousand shares as of 31 December 2018. The rest has not yet been completed. Therefore, the accumulated book value of certificates of bond - to - stock conversion is NT\$9,681 thousand in a total of 968 thousand shares.

As of 1 January 2017, the accumulated book value of certificates of bond - to - stock conversion that had completed the registration process amounted to NT\$8,094 thousand in a total of 809 thousand shares as of 31 March 2017.

As of 31 December 2018 2017 Additional paid-in capital \$890,036 \$813,537 Treasury share transactions 5,749 5,749 Share of changes in net assets of $(1,690)$ $(1,690)$ associates and joint ventures accounted for using the equity method From share of changes in net assets of $(2,775)$ $(2,688)$ associates Premium from merger 705 705 Stok options 12,061 14,652 Total \$904,086 \$830,265
(b) Capital surplus

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.

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

$\frac{1}{2}$ . . . . . . . . . . . . . . . . . . .

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

a. Payment of all taxes and dues;
b. Offset prior years' operation losses;
c. Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve;
d. Set aside or reverse special reserve in accordance with law and regulations; and
e. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders' meeting.

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

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

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

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

On a public company's first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserve. Following a company's adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an amount equal to "other net deductions from shareholders' equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders' equity. For any subsequent reversal of other net deductions from shareholders' equity, the amount reversed may be distributed.

The Company did not reverse any special reserve as a result of using, disposing of or reclassifying related assets in 31 December 2018 and 2017.

Details of the 2018 and 2017 earnings distribution and dividends per share as approved and resolved by the Board of Directors' meeting and shareholders' meeting on 14 March 2019 and 8 June 2018, respectively, are as follows:

		Appropriation of earnings	Dividend per share (NT\$)
	2018	2017	2018	2017
Common stock -cash dividend	\$1,026,622	\$901,664	\$4.5	\$4
Legal reserve	141,348	122,647
Special reserve	108,492	52,417
Total	\$1,276,462	\$1,076,728

Please refer to Note 6(18) for further details on employees' compensation and remuneration to directors and supervisors.

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

$(16)$ Operating revenue

	For the years ended
	31 December
	2018	2017
Revenue from contracts with customers
Sale of goods	\$4,901,712	\$4,658,124
Rendering of service	116,286	139,858
Other operating revenue	17,929	14,297
Total	\$5,035,927	\$4,812,279

Note: The Company adopted IFRS 15 on 1 January 2018. The Company elected to apply the standard retrospectively by recognizing the cumulative effect of initially applying the standard at the date of initial application (1 January 2018).

The Company adopted IFRS 15 on 1 January 2018. Analysis of revenue from contracts with customers during the year is as follows:

(1) Disaggregation of revenue

For the year ended 31 December 2018

		Electronic
	Cable Segment	Segment	Total
Sale of goods	\$3,215,445	\$1,686,267	\$4,901,712
Rendering of services	89,276	27,010	116,286
Other operating revenues	17,169	760	17,929
Total	\$3,321,890	\$1,714,037	\$5,035,927

Timing of revenue recognition:
At a point in time	\$3,321,890	\$1,714,037	\$5,035,927
Over time
Total	\$3,321,890	\$1,714,037	\$5,035,927

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

(2) Contract balances

Contract liabilities - current

	Beginning	Ending
	balance	balance	Difference
Sales of goods	\$133,277	\$89,471	\$(43,806)

For the year ended 31 December 2018, contract liabilities decreased as performance obligations are partially satisfied.

(3) Transaction price allocated to unsatisfied performance obligations

As at 31 December 2018, the Company expected that all of the transaction price allocated to unsatisfied performance obligations will be recognized as revenue within one year.

(4) Assets recognized from costs to fulfil a contract

None

(17) Expected credit losses (gains)

	As of 31 December
	2018	2017
Operation expense- Expected credit (gains) losses
Trade receivables	\$696	$\blacksquare$

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 2018 is as follows:

. . . . . . . . . . . . . . . . . . .

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

	Not yet		Overdue
	due (note)		$\leq 30$ days 31-60 days		61-90 days 91-120 days	$>=121$ days	Total
Gross carrying
amount	\$1,062,470	\$26,653	\$1,164	$\mathsf{\$}$ -	\$ -	\$1,166	\$1,091,453
Loss ratio	$-\frac{9}{6}$	-%	$-$ %	-%	$-\frac{6}{2}$	30-100%
Lifetime
expected credit			$\blacksquare$		٠	(1,166)	(1,166)
losses
Carrying amount	\$1,062,470	\$26,653	\$1,164	$$ -$	$S -$	\$-	\$1,090,287

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

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

	Note receivables	Trade receivables
Beginning balance (in accordance with IAS 39)	Տ -	\$470
Transition adjustment to retained earnings
Beginning balance (in accordance with IFRS 9)		470
Write off	-
Addition/(reversal) for the current period		696
Ending balance		l,166

Summary statement of employee benefits, depreciation and amortization $(18)$ expenses by function for the years ended 31 December 2018 and 2017:

				For the years ended 31 December
Function		2018			2017
Nature	Operating	Operating		Operating	Operating
	costs	expenses	Total	costs	expenses	Total
Employee benefits expense
Salaries	\$84,646	\$386,666	\$471,312	\$80,349	\$335,379	\$415,728
Labor and health insurance	10,564	28,461	39,025	9,938	28,041	37,979
Pension	5,699	17,431	23,130	5,377	16,709	22,086
Remuneration to directors and		15,300	15,300		11,000	11,000
supervisors
Other employee benefits expense	10,051	15,679	25,730	9,512	15,216	24,728
Depreciation	8,950	12,243	21,193	7,076	11,911	18,987
Amortization	417	3,331	3,748	803	4.845	5.648

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

As of December 31, 2018 and 2017, the number of employees of the Company were 681 and 662; the number of directors who were not concurrently employees were 8 and 6, respectively.

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

Based on profit of 31 December 2018, the Company estimated the amounts of the employees' compensation and remuneration to directors and supervisors for the period ended of 31 December 2018 to be 1.44% and 0.92% of profit, respectively. The employees' compensation and remuneration to directors and supervisors for the period ended of 31 December 2018 amount to NT\$24,000 thousand and NT\$15,300 thousand respectively, recognized as employee benefits expense.

A resolution was passed at a Board of Directors meeting held on 14 March 2019 to distribute NT\$24,000 thousand and NT\$15,300 thousand in cash as employees' compensation and remuneration to directors and supervisors of 2018, respectively. Differences between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the years ended 31 December 2018 are recognized in profit or loss of the subsequent year in 2018.

employees' compensation and remuneration to directors and The supervisors for the year ended of 31 December 2017 amount to NT\$16,000 thousand and NT\$11,000 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 2017.

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

(19) Non-operating income and expenses

For the years ended 31 December 2018 2017 Sample income \$24,513 \$19,261 Dividend income 16,607 14,882 Interest income Financial assets measured at amortized 3,299 3,225 costs Rent income 1,372 660 Others 47,060 106,716 Total \$92,851 \$144,744
(a) Other income

(b) Other gains and losses

For the years ended 31 December
2018	2017
\$78,933	\$(52,783)
	(4,110)
	48
38,858	7,530
44.727	(34,696)
\$162,518	\$(84,011)

Note:

Balance in current period arose from financial assets mandatorily measured at fair value through profit or loss and balance in prior period arose from held for trading investment.
Balances in both periods arose from held for trading investment.

		For the years ended 31 December
	2018	2017
Interest on loans from bank	\$12,471	\$12,566
Interest on bonds payable	5,645	3,281
Total	\$18,116	\$15,847

$\alpha$ and $\alpha$ and $\alpha$

سنبرز والمتناسب المتعقب المستشفيات

المتفاعل

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

$(20)$ Components of other comprehensive income

For the year ended 31 December 2018

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Not to be reclassified to profit or loss in subsequent periods:
Remeasurements of defined benefit plans	\$(1,170)	$$ -$	\$(1,170)	\$1,624	\$454
Unrealized gains on equity instruments measured at fair value through other comprehensive income	110,611		110,611		110,611
Unrealized gains on equity instruments method at fair value through other comprehensive income of associates and joint venture	(2,107)		(2,107)		(2,107)
To be reclassified to profit or loss in subsequent periods:
Exchange differences resulting from translating the financial statements of foreign operations	(103, 951)		(103, 951)	22,757	(81, 194)
Total of other comprehensive income	\$3,383	$S -$	\$3,383	\$24,381	\$27,764

For the year ended 31 December 2017

	Arising during the period	Reclassification adjustments	Other comprehensive during the period income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Not to be reclassified to profit or loss in subsequent periods:
Remeasurements of defined benefit plans	\$(6,019)	$\mathbf{s}$ -	\$(6,019)	\$1,023	\$(4,996)
To be reclassified to profit or loss in subsequent periods:
Exchange differences resulting from translating the financial statements of foreign operations	(113, 473)		(113, 473)	18,149	(95, 324)
Unrealized gains (losses) from available-for-sale financial assets	28,973		28,973		28,973
Share of other comprehensive income of associates and joint ventures	13.964		13,964		13,964
Share of other comprehensive income of subsidiary, associates and joint ventures	(30)		(30)		(30)
Total of other comprehensive income	\$(76, 585)	$\mathbb{S}$ -	\$(76,585)	\$19,172	\$(57,413)

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

$(21)$ Income tax

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

The major components of income tax expense are as follows:

Income tax expense recognized in profit or loss

	For the years ended 31 December
	2018	2017
Current income tax expense :
Current income tax charge	\$193,571	\$171,294
Adjustments in respect of current income tax of prior periods	(18, 836)	(21,076)
Deferred tax expense:
Deferred tax expense relating to origination and reversal of temporary differences	37,448	(8,958)
Deferred tax expense (income) relating to changes in tax rate or the imposition of new taxes	20,006
Total income tax expense	\$232,189	\$141,260

Income tax relating to components of other comprehensive income

	For the years ended 31 December
	2018 2017
Deferred tax income:
Exchange differences on translation	\$(22,757)	\$(18,149)
of foreign operations
Remeasurements of defined benefit plans	(1,624)	(1,023)
Income tax relating to components of other
comprehensive income	\$(24.381)	\$(19,172)

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

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

$\mathbb{Z}$ and $\mathbb{Z}$ and $\mathbb{Z}$

المادسين والمتحدث المستوقف القادا

$\bar{1},\bar{2},\bar{1},\bar{2},\bar{3}$

	For the years ended
	31 December
	2018	2017
Accounting profit before tax from continuing operations	\$1,645,666	\$1,367,731
Tax at the domestic rates applicable to profits in the country concerned	\$329,133	\$232,514
Tax effect of revenues exempt from taxation	(10,952)	(10, 152)
Tax effect of expenses not deductible for tax purposes	1,698	1.550
Tax effect of deferred tax assets/liabilities	(103, 335)	(81, 523)
10 % surtax on undistributed retained earnings	14,475	19,947
Tax effect of different tax rates for entities in other tax regions	(18, 836)	(21,076)
Adjustments in respect of defered income tax of prior periods	20,006
Total income tax expense recognized in profit or loss	\$232,189	\$141,260

Deferred tax assets (liabilities) relate to the following:

For the year ended 31 December 2018

			Recognized in other
	Balance as of 1	Recognized in	comprehensive	Balance as of
	January	profit or loss	income	31 December
Temporary differences
Exchange differences on translation of foreign operations	\$14,891	$\mathbf{s}$ -	\$22,757	\$37,648
Unrealized foreign exchange gains or losses	(2,922)	2,627		(295)
Loss from price recovery (reduction) of inventories	2,840	159		2,999
Revaluations of financial liabilities at fair value through profit or loss	7,119	(15,380)		(8,261)
Investments accounted for using the equity method	(131,216)	(47, 733)		(178, 949)
Unrealized intragroup profits and losses	5,963	1,938		7,901
Remeasurements of defined benefit plans	7,877		1,624	9,501
Non-current liability - Defined benefit liability	7,303	897		8,200
Loss allowance	709	265		974
Convertible bonds	(825)	(227)		(1,052)
Deferred tax (income) / expense		\$(57, 454)	\$24,381
Net deferred tax assets (liabilities)	\$(88,261)			\$(121,334)
Reflected in balance sheet as follows:
Deferred tax assets	\$46,702			\$67,223
Deferred tax liabilities	\$134,963			\$188,557

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

			Recognized in other
	Balance as of 1	Recognized in	comprehensive	Balance as of
	January	profit or loss	income	31 December
Temporary differences
Exchange differences on translation of foreign operations	\$(3,258)	$S -$	\$18,149	\$14,891
Unrealized foreign exchange gains or losses	(112)	(2,810)		(2,922)
Loss from price recovery (reduction) of inventories	2,375	465		2,840
Revaluations of financial liabilities at fair value through profit or loss	2,019	5,100		7,119
Investments accounted for using the equity method	(135, 578)	4,362		(131,216)
Unrealized intragroup profits and losses	3,989	1,974		5,963
Remeasurements of defined benefit plans	6,854		1,023	7,877
Non-current liability - Defined benefit Liability	7,315	(12)		7,303
Allowance for doubtful accounts	402	307		709
Convertible bonds	(397)	(428)		(825)
Deferred tax (income)/ expense		\$8,958	\$19,172
Net deferred tax asstes (liabilities)	\$(116,391)			$$$ (88,261)
Reflected in balance sheet as follows:
Deferred tax assets	\$22,954			\$46,702
Deferred tax liabilities	\$139,345			\$134,963

For the year ended 31 December 2017

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 2018, the Company's income tax returns through 2016 have been assessed and approved by the tax authority.

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

$(22)$ 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.

	For the years ended
	31 December
	2018	2017
(a) Basic earnings per share
Net income	\$1,413,477	\$1,226,471
Weighted average number of ordinary shares	225,685	225,416
outstanding for basic earnings per share (in thousands)
Basic earnings per share (NT\$)	\$6.26	\$5.44
(b) Diluted earnings per share
Profit attributable to ordinary equity holders of the
Company	\$1,413,477	\$1,226,471
Add: Interest expense from convertible bonds	4,516	2,723
Profit attributable to ordinary equity holders of the	\$1,417,993	\$1,229,194
Company after dilution
Weighted average number of ordinary shares	225,685	225,416
outstanding for basic earnings per share (in
thousands)
Effect of dilution:
Employee compensation-stock (in thousands)	290	185
Convertible bonds (in thousands)	6,352	3,905
Weighted average number of ordinary shares outstanding after dilution (in thousands)	232,327	229,506
Diluted earnings per share (NT\$)	\$6.10	\$5.36

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

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

7. 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 related parties	Nature of relationship
Argosy Research Inc.	Associate
Hebang Electron (Suzhou) Co. (Notel)	Substantive related party
INPAQ Technology Co., Ltd. (Notel)	Associate
Circuits & Cables LLC	Associate
SINBON Germany GmbH	Subsidiary
Hong Kong Sinbon Electronics Co., Ltd.	Subsidiary
Tong Cheng Sinbon Electronics Co., Ltd.	Subsidiary
Jiangyin Sinbon Electronics Co., Ltd.	Subsidiary
Sinbon USA LLC	Subsidiary
Japan Sinbon Electronics Co., Ltd. (Note2)	Subsidiary
Radbon Avionics Inc.	Subsidiary
T-CONN Precision Co., Ltd.	Subsidiary
SINBON Hungary Kft.	Subsidiary
Digi O2 International Co., Ltd.	Subsidiary
Beijing Sinbon Tongan Electronics Co., Ltd.	Subsidiary

Note 1: On 30 June 2017, the Company stepped down as a board director of the company and became a nonrelated party.

Note 2: On 31 December 2017, the Company disposal 55% equity of Japan Sinbon Electronics Co., Ltd. Therefore, its ownership dropped to 15% and transfer to nonrelated party.

(a) Sales

		For the years ended
	31 December
	2018	2017
Subsidiaries	\$7,712	\$27,738

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 2018 and 2017 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

ساديات

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

(b) Purchases

	For the years ended
	31 December
	2018 2017
Subsidiaries	\$1,651,967	\$1,803,893
Associates	22	65
Substantive related parties	$\blacksquare$
Total	\$1,651,989	\$1,803,962

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

	As of 31 December
	2018	2017
Subsidiaries	\$5	\$472
Associates	327	9.454
Total	\$332	\$9,926

(d) Other receivables-related parties

	For the years ended
	31 December
	2018	2017
Subsidiaries	\$66,717	\$40,941

(e) Accounts payable-related parties

	For the years ended
	31 December
	2018	2017
Subsidiaries	\$301,005	\$441,541
Associates	23
Total	\$301,028	\$441,541

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

(f) Other payables For the years ended 31 December 2018 2017 Subsidiaries \$3,737 \$2,093 Associates 17 \$3,754 \$2,093 Total

(g) Expenses

	For the years ended 31 December
	2018	2017
Subsidiaries	\$17,885	\$2,405
Associates	699
Total	\$18,584	\$2,405

(h) Key management personnel compensation

	For the years ended 31 December
	2018	2017
Short-term employee benefits	\$84,293	\$78,739
Post-employment benefits	23,130	22,086
Total	\$107,423	\$100,825

8. Assets pledged as security

None.

9. Significant contingencies and unrecognized contract commitments

The Company provided guarantees for subsidiaries' financing to banks for the years ended 31 December 2018. Please refer to Note 13.(1)(b).

10. Significant disaster loss

None.

Significant subsequent events 11.

None.

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

12. Others

(1) Categories of financial instruments

. . . . . . . . . . . . . . . . . . . . . .

$\sim$ .

Financial assets

		As of 31 December
	2018	2017
Financial assets at fair value through profit or loss:
Mandatorily measured at Fair value through profit or loss	\$166,623	(Notel)
Held for trading	(Notel)	\$56,690
Financial assets at fair value through other comprehensive	235,449	(Notel)
income
Available-for-sale financial assets:
Financial assets at fair value	(Notel)	132,170
Financial assets at cost-noncurrent	(Notel)	318,167
Subtotal	(Notel)	450,337
Financial assets measured at amortized cost (Note 2)	2,009,465	(Notel)
Loans and receivables (Note 2)	(Notel)	2,457,755
Total	\$2,411,537	\$2,964,782

Financial liabilities

	As of 31 December
	2018	2017
Financial liabilities at amortized cost:
Short-term loans	\$1,490,262	\$1,512,872
Notes and accounts payable	889,501	946,352
Bonds payable (including current portion with maturity	404,554	483,621
less than 1 year)
Others payables	288,845	245,587
Subtotal	3,073,162	3,188,432
Financial liabilities at fair value through profit or loss:
Held for trading		44,727
Total	\$3,073,162	\$3,233,159

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

Note:

(1) The Company adopted IFRS 9 on 1 January 2018. The Company elected not to restate prior periods in accordance with the transition provision in IFRS 9.
(2) 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 Company identifies measures activates. The 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.

(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.

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

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.

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.

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

Pre-tax sensitivity analysis of changes in related risk factors for the years ended 31 December 2018 and 2017 are as follows:

For the year ended 31 December 2018

		Sensitivity of	Sensitivity of
Main Risk	Fluctuation	profit/loss	equity
Foreign currency risk	NTD/USD rate $+/- 1\%$	$+/-3.924$
Interest rate risk	Market rate $+/- 10$ basis points	$+/-1,480$

For the year ended 31 December 2017

		Sensitivity of	Sensitivity of
Main Risk	Fluctuation	profit/loss	equity
Foreign currency risk	NTD/USD rate $+/- 1\%$	$+/-5.198$	$\bullet$
Interest rate risk	Market rate $+/- 10$ basis points	$+/-1.549$	$\blacksquare$

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 held for trading financial assets or available-for-sale financial assets, 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 of the listed equity securities, mandatorily measured at could increase/decrease the Company's profit for the year ended 31 December 2017 by NT\$13,217 thousand.

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

At the reporting date, a change of 10% in the price of the listed equity securities, equity instrument measured at fair value through other comprehensive income could increase/decrease the Company's equity for the year ended 31 December 2018 by NT\$1,570 thousand.

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

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

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 2018 and 2017, amounts receivables from top ten customers represented 36% and 40% 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.

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

(5) Liquidity risk management

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of the Company's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

	Less than 1 year 2 to 3 years 4 to 5 years $>$ 5 years				Total
As of 31 December 2018
Loans	\$1,510,063	$\mathsf{\$}$ .	$S -$	$\hat{\mathbf{S}}$ -	\$1,510,063
Notes and accounts payable	889,501				889,501
Convertible bonds	408,610				408,610
As of 31 December 2017
Loans	\$1,524,174	$\mathsf{\$}$ -	$\mathsf{\$}$ -	$\hat{\mathbb{S}}$ -	\$1,524,174
Notes and accounts payable	946,352				946,352
Convertible bonds		505,013			505,013
	Derivative financial instruments
	Less than $1$ year $2$ to $3$ years $4$ to $5$ years			$>$ 5 years	Total
As of 31 December 2018
Cross currency swap
Inflows	\$853,959	$\mathbb{S}$ -	\$-	$\mathbb{S}$ -	\$853,959
Outflows	(851, 675)				(851, 675)
Net	\$2,284	$\mathbb{S}$ -	$\mathsf{\$}$ -	$\hat{\mathbb{S}}$ -	\$2,284
As of 31 December 2017
Cross currency swap
Inflows	\$1,750,269	$S -$	$\hat{\mathbb{S}}$ -	$S -$	\$1,750,269
Outflows	(1,629,072)				(1,629,072)
Net	\$121,197	$\mathsf{\$}$ -	$\mathsf{\$}$ -	$\mathbb{S}$ -	\$121,197

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

......................................

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 2018:

		Total liabilities from
	Short-term loans	financing activities
As of 1 January 2018	\$1,512,872	\$1,512,872
Cash flow	(22,610)	(22, 610)
Currency change
As of 31 December 2018	\$1,490,262	\$1,490,262

Reconciliation of liabilities for the year ended 31 December 2017:

Not applicable

سندان والمستحدة والأمر

(7) Fair values of financial instruments

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

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

a. The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.
b. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities, beneficiary certificates, bonds and futures etc.) at the reporting date.

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

c. Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
d. Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)
e. The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation).
(b) Fair value of financial instruments measured at amortized cost

The carrying amount of the Company's financial assets and liabilities measured at amortized cost approximate their fair value.

Please refer to Note 12.(9) for fair value measurement hierarchy forfinancial instruments of the Company.

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

(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 2018 and 2017 are as follows:

Cross currency swaps

The Company entered into cross currency swaps to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to cross currency swaps:

Items	Amount (in thousands)		Contract Period
As of 31 December 2018 Cross currency swaps	USD	28,000	2 January 2018 - 13 March 2019
As of 31 December 2017 Cross currency swaps	USD	53,000	14 January 2016 - 22 March 2018

Embedded derivatives

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

The counterparties for the aforementioned derivatives transactions are well 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.

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

(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 $1 - Q$ uoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

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

Level $3$ – Unobservable inputs for the asset or liability

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

(b) Fair value measurement hierarchy of the Company's assets and liabilities

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

As of 31 December 2018

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through profit or loss
Fund	\$154,072	\$ -	\$ -	\$154,072
Cross currency swaps		9,873		9,873
Stock	2,596			2,596
Embedded derivatives-bond		82		82
Financial assets at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	15,698		219,751	235,449

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

As at 31 December 2017

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through profit or loss
Fund	\$52,909	\$ -	$S -$	\$52,909
Stock	3,781			3,781
Available-for-sale financial assets:
Stock	132,170			132,170
Financial liabilities:
Financial liabilities at fair value through profit or
loss
Cross currency swap	\$ -	\$44,427	\$ -	\$44,427
Embedded derivative - bond		300		300

Transfers between Level 1 and Level 2 during the period

During the years ended 31 December 2018 and 2017, 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:

	Assets
	At fair value through other comprehensive income
	Stocks
Beginning balances as of 1 January 2018	\$191,149
Total gains and losses recognized for the year ended 31
December 2018:
Amount recognized in OCI (presented in	68.454
"Unrealized gains (losses) from equity instruments
investments measured at fair value through other
comprehensive income)
Disposal	(32, 653)
The return of paid-in capital for capital reduction	(7,199)
Ending balances as of 31 December 2018	\$219,751

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 2018

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets: At fair value through profit or loss
Stocks and others		Market approach Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value of the stocks (decrease) in the	10% increase (decrease) in the discount for lack of marketability would result in increase Company's profit or loss by NT\$21,975 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company's Financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company's accounting policies at each reporting date.

As at 31 December 2018

	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value
but for which the fair value is disclosed:
Investments accounted for using the	\$88,204	$S -$	$S -$	\$88,204
equity method (please refer to Note $6(8)$ )

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

As at 31 December 2017
	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value
but for which the fair value is disclosed:
Investments accounted for using the	\$94,094	$S -$	$S -$	\$94,094
equity method(please refer to Note $6(8)$ )

(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 Monetary items: JPY		As of 31 December 2018		As of 31 December 2017
		Foreign			Foreign
	Foreign	exchange		Foreign	exchange
USD RMB EUR JPY	currencies	rate	NTD	currencies	rate	NTD


	\$78,893	0.28	\$21,964	\$1,105,598	0.26	\$292,873
	50,847	30.73	1,562,677	57,918	29.85	1,728,735
	3,021	35.20	106,351	2,486	35.67	88,687
		4.48		8,338	4.58	38,218
Financial liabilities
Monetary items:
	1,306	0.28	364	3,489	0.26	924
USD	38,080	30.73	1,170,325	40,502	29.85	1,208,904
EUR	534	35.20	18,797	400	35.67	14.276

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\$78,933 thousand and NT\$(52,783) thousand foreign exchange gains(losses) for the years ended 31 December 2018 and 2017, respectively.

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

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

(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.

1. Other disclosure
(1) Information at significant transactions
- (a) Financing provided to others for the year ended 31 December 2018: None.
- (b) Endorsement/Guarantee provided to others for the year ended 31 December 2018: Please refer to Attachment 1.
- (c) Securities held as of 31 December 2018: Please refer to Attachment 2.
- (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 2018: 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 2018: 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 2018: 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 2018: Please refer to Attachment 3.

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

(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 2018: Please refer to Attachment 8.
(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 7, 8.
(2) Information on investees:
(a) Names, locations, main businesses and products, original investment amount, investment as of 31 December 2018, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2018: Please refer to Attachment 4.
(b) Information at significant transactions on investees
- A. Financing provided to others for the year ended 31 December 2018: Please refer to Attachment 5.
- B. Endorsement/Guarantee provided to others for the year ended 31 December 2018: None.
- as of 31 C. Securities held December 2018 (excluding) subsidiaries, associates and joint ventures) : Please refer to Attachment 6.
- 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 2018: None.

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

$E_{\rm{L}}$ 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 2018: 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 2018: 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 2018: Please refer to Attachment 7.
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 2018: Please refer to Attachment 8.
I. Financial instruments and derivative transactions: None.
(3) Information on investments in mainland China
(a) Investment in Mainland China: Please refer to Attachment 9.
(b) Significant transactions through third regions with the investees in Mainland China: Please refer to Note 13.
Segment information $14.$

The Company fully disclosed segment information in consolidated financial statements.

Attachment 1: Endorsement/Guarantee provided to others as of 31 December 2018

No.	Endorsor/	Receiving party		Limit of euarantee/endorsement amount for receiving	Maximum balance for	Ending	Actual amount	Amount of collateral	Percentage of accumulated guarantee amount to	Limit of total guarantee/ endorsement	Parent company's guarantee/ endorsement	Subsidiaries' guarantee/ endorsement	Guarantee/ endorsement amount to
[Note 1]	Guarantor	Company name	Releationship (Note 2)	party (Note 3)	the period	balance	provided	guarantee/ endorsement	net assets value from the latest financial statement	amount (Note4)	amount to subsidiaries (Note 5)	amount to parent company (Note 5)	company in Mainland China (Note 5)
	The Company	SHSB		\$2,629,057	\$46,452	\$46,100	£.	none	0.70%	\$6,572,643	Y	N	v
	The Company	SZSB	$\overline{2}$	\$2,629,057	\$15,484	\$15,366	\$-	none	0.23%	\$6,572,643	Y	N	v
	The Company	TCSB	$\mathbf{2}$	\$2,629,057	\$170,324	\$169,032	\$-	none	2.57%	\$6,572,643	Y	N	v
	The Company	EM	$\overline{2}$	\$2,629,057	\$201,292	\$199,764	$\mathbf{s}$ .	none	3.04%	\$6,572,643	$\mathbf{v}$	N
	The Company	JYSB	$\mathbf{2}$	\$2,629,057	\$371,616	\$368,796	$S -$	none	5.61%	\$6,572,643	Y	N	v
	The Company	BJSB Tongan	$\overline{2}$	\$2,629,057	\$735,321	\$444,291	$S -$	none	6.76%	\$6,572,643	Y	N
n	The Company	T-CONN Precision	$\overline{2}$	\$2,629,057	\$177,420	\$176.832	\$-	none	2.69%	\$6,572,643	v	N	N
	The Company	ET Hungary	$\overline{2}$	\$2,629,057	\$257,924	\$254,804	\$141,516	none	3.88%	\$6,572,643	v	N	N
0	The Company	T-CONN Zhongshan	$\mathbf{2}$	\$2,629,057	\$417,011	\$414,896	\$70,682	none	6.31%	\$6,572,643		N	v
-0	The Company	Radbon		\$2,629,057	\$50,000	\$50,000	\$30,000	none	0.76%	\$6,572,643	Y	N	N

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

The Company is coded "0".
The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

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

A company with which it does business.
A company in which the public company directly and indirectly holds more than 50 percent of the voting shares,
A company that directly and indirectly holds more than 50 percent of the voting shares in the public company.
A company in which the public company holds, directly or indirectly, 90 percent 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 guarantec/endorsement amount for receiving party is 40% of the net worth of the financial report reviewed by the certified public accountants as of 31 December 2018. \$6,572,643×40%=\$2,629,057

Note 4: Limit of total guarantee/ endorsement amount is 100% of the net worth of the financial report reviewed by the certified public accountants as of 31 December 2018.

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.

Attachment 2: Securities held as of 31 December 2018.

		Relationship	as of 31 December 2018 Financial statement account Percentage of Fair value Shares Book value ownership $(\%)$ Equity instrument investments measured at fair value through other 15,000,000 shares \$103,372 11.11% \$103,372 comprehensive income-Non-current Equity instrument investments measured at fair value through other 6,000,000 shares 57.359 7.50% 57,359 comprehensive income-Non-current Equity instrument investments measured at fair value through other 2,771,670 shares 32.470 16.67% 32,470 comprehensive income-Non-current Equity instrument investments measured at fair value through other 1.897,960 shares 18,684 3.06% 18,684 comprehensive income-Non-current Equity instrument investments measured at fair value through other 235,000 shares 15,698 0.25% 15,698 comprehensive income-Non-current Equity instrument investments measured at fair value through other 691,057 shares 4.287 4.07% 4,287 comprehensive income-Non-current Equity instrument investments measured at fair value through other 347,500 shares 2,235 5.00% 2,235 comprehensive income-Non-current Equity instrument investments measured at fair value through other 330,000 shares 549 1.62% 549 comprehensive income-Non-current
Holding Company	Type and name of securities	(Note 1)						Note
The Company	Chengding Venture Capital Co., Ltd.
The Company	Top Taiwan Venture Capital Co., Ltd.
The Company	Dynahz Technologies
The Company	Top Taiwan VII Venture Capital Co., Ltd.
The Company	Gongwin Biopharm Holdings Co., Ltd.
The Company	Top Taiwan III Venture Capital Co., Ltd.
The Company	Top Taiwan II Venture Capital Co., Ltd.
The Company	Bandrich, Inc.
The Company	Japen Sinbon Electronics Co., Ltd.		Equity instrument investments measured at fair value through other comprehensive income-Non-current	75 shares	795	15.00%	795
The Company	Nextronics Engineering Corp.	$\sim$	Financial asset measured at fair value through profit or loss-current	2,950 shares	77.438	9.94%	77,438
The Company	Cayman Lan-Cheng Fund		Financial asset measured at fair value through profit or loss-current	30 shares	76.634	17.14%	76,634
The Company	Trutankless, Inc.		Financial asset measured at fair value through profit or loss--current	162 shares	2,596		2.596
			Total		\$392,117

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

$\sim 10^{-1}$

$\sim 100$

$\sim$ $\sim$

			Intercompany Transactions			Details of non-arm's length transaction		Notes and accounts receivable (payable)
Related party Counterparty		Relationship	Purchases (Sales)	Amount	Percentage of total consolidated purchase (Sales)	Terms	Unit price	Terms	Carrying amount	Percentage of total consolidated receivables (payable)	Note
The Company	JYSB	Subsidiary	Purchase	\$1,595,777	42.37%	Trading condition is as same as other supplier	N/A	N/A	\$(287, 872)]	(32.23)%

Attachment 3: 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 2018

Attachment 4: Names, locations, main businesses and products, original investment amount, investment as of 31 December, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2018: (Excluding investment in Mainland China)

	Investee company				Initial Investment		Investment as of 31 December 2018				Note
Investor	(Notel)	Address	Main businesses and products	Ending balance	Beginning balance	Number of shares	Percentage of ownership $(Y_0)$	Book value	Net income (loss) of investee company	Investment income (loss) recognized	(Note 1)
The Company	HKSB	Hong Kong	Manufacturing and selling a wide variety of connectors, wires and	HKD95,606,000	HKD95,606,000
			cables.	\$401,262	\$401,262		100.00%	\$477,520	\$71,274	\$71,274	Subsidiary
The Company	Kwan-Ze	New Taipei City, Taiwan	Holding company	\$235,600		\$235,600 23,560,000 shares	100.00%	\$348,679	\$53,981	\$53,981	Subsidiary
The Company	Top Taiwan IV Venture Capital Co., Lid	Taipei City, Taiwan	Holding company	\$22,400	\$40,000	2,240,000 shares	20.00%	\$24,061	\$18	\$4	Investee under the equity method
The Company	SB BVI	British Virgin Islands	Holding company	USD45,021,000	USD40,021,000
				\$1,461,158	\$1,309,185	$\overline{a}$	100.00%	\$3,663,702	\$465,726	\$465,726	Subsidiary
The Company	Argosy Technologies Co., Ltd.	Hsinchu City. Taiwan	Produce and sells a variety of electronic components, computers and peripheral equipment	\$30,648	\$30,648	2,945,034 shares	3.59%	\$49,210	\$295,644	\$10,605	Investee under the equity method
The Company	Worldwide Wire Harnesses Co., Ltd.	Samoa	Logistic center.	$\mathbb{S}$ .	USD75,000 \$2,451				S(9, 595)	\$(4,797)	Subsidiary
The Company	SEL	Mauritius	Holding company	USD3,726,000	USD 4,233,000
				\$120,732	\$136,361		64.48%	\$108	S(8)	S(5)	Subsidiary
The Company	Sinbon USA LLC	216th street SW Suite D	Logistic center.	USD4,059,000	USD3,000,000.	٠	100.00%	\$61,182
		Lynneood WA 98036		\$128,061	\$93,412				\$(9, 860)	\$(9,860)	Subsidiary
The Company	Sinbon Europe GmbH	Pfarrkirchen, Germany	Logistic center.	EUR5,209,000	EUR5,209,000	$\blacksquare$	100.00%	\$110,496	\$(50, 628)
				\$185,241	\$185,241					S(50, 628)	Subsidiary
The Company	Radbon	Miaoli County, Taiwan	Manufacturing and selling signal cables and cabin wiring.	\$56,651	\$27,000	3,300,000 shares	55.00%	\$30,527	S(4, 494)	\$(6,761)	Subsidiary
The Company	T-CONN	New Taipei City, Taiwan	Manufacturing and selling a wide variety of connectors, wires and cables.	\$116,804		\$56,510 11,308,970 shares	62.52%	\$153,467	\$37,730	\$24,233	Subsidiary
T-CONN	SPL	Mauritius	Logistic center.	\$3,039	\$3,039		100.00%	\$23,738	\$6,595	$\mathsf{s}$ .	Subsidiary
Sinbon USA LLC	Circuits & Cables LLC (C&C)	815 South Brown School Road Vandalia, OH 45377 USA	Selling a wide variety of connectors and cables.	USD 1,604,000	USD 1,604,000		40.00%	\$32,181	USD(1,344,000) \$(40, 545)	\$(16, 213)	Investee under the equity method
Sinbon USA L.L.C	Worldwide Wire Harnesses Co., Ltd.	Samoa	Logistic center.	USD 75,000	$\mathsf{s}$ .		50.00%	\$1,799	\$(9, 595)	${\bf S}$	Subsidiary
Kwan-Ze	Digi 02	Miaoli Country, Taiwan	Selling a wide variety of connectors and cables.	$S -$	\$108,770	$\overline{a}$	$\overline{\phantom{0}}$	S	$S -$	$\mathsf{s}$ -	Subsidiary

December 2018: (Excluding investment in Mainland China)

										Note
(Notel)			Ending balance	Beginning balance	Number of shares	Percentage of ownership (%)	Book value	of investee company	income (loss) recognized	(Note 1)
Argocy Research Inc.	Hsinchu City, Taiwan	electronic components, computers and peripheral equipment				17.81%	\$248,651	\$295,644		Investee under the equity method
STT	U.S.A Tennessee	Logistic center.				50.00%	USD(133)	USD(318)	$S$ .	Subsidiary
Argocy Research Argosy Technology Inc.(USA)	U.S.A	Sell Multimedia related products, ODM and OED		\$30,347	900 shares	100.00%	$S -$	S		Investee under the equity method
Ari International B.V.	The Netherlands	Leasing operations and sell ODM and OED		\$22,314		100.00%	\$16,338	\$(76)	$S$ .	Investee under the equity method
Argocy Research (Singapore)Pte.,Ltd. (AIS)	Singapore	Holding company		\$32,697		100.00%	\$4,571	\$(344)		Investee under the equity method
NOVAC ARGOSY	Tokyo	Sell computer peripheral products		\$4,294		49.00%	$\mathbf{S}$ .	s	s.	Investee under the equity method
Global Saber Electronics Co., Ltd.	Mauritius	Selling a wide variety of connectors and cables.	$\mathbf{s}$ .	\$		100.00%	\$82,875	\$9,408		Investee under the equity method
ROTEC LIMITED	British Virgin Islands	Holding company		\$268,479	8,550 shares	77.38%	\$426,874	\$57,123		Investee under the equity method
ROTEC LIMITED	British Virgin Islands	Holding company		\$72,918	2,500 shares	22.62%	\$124,785	\$57,123		Investee under the equity method
Sinbon Electronic Holding GmbH	Germany	Holding company	\$181,113	EUR5,184,000 \$181,113		51.00%	EUR3,116,000 \$109,676	EUR(2,602,000)		Subsidiary
Sinbon Eleotronic ET Hungary	Hungary	wide variety of connectors and cables.	\$38,364	EUR1,080,000 \$38,364		100.00%	EUR911,000 \$32,078	EUR(2,365,000) \$(84, 206)		Subsidiary
Sinbon Eleotronic ET Germany	Germany	Logistic center.		EUR1 245,000 \$44,225		100.00%	EUR1,258,000 \$44,271	EUR(140,000) S(5,000)	\$-	Subsidiary
	Investee company Ari International	Address	Main businesses and products Produce and sells a variety of	\$147,175 USD140,000 \$4,542 \$30,347 \$22,314 \$32,697 \$4,294 \$268,479 \$72,918 EUR5, 184,000 Selling Producting and Processing a EUR1,080,000 EUR1,245,000 \$44,225	Initial Investment USD140,000 \$4,542	\$147,175 14,624,200 shares		Investment as of 31 December 2018	Net income (loss) S(4087)	Investment $S$ . \$(9,595) $S -$ $S -$ s- $s -$ s - $s$ - \$(92, 654) $S -$

1: (1) Information of "Investee company", "Address", "Main businesses and products", "Initial Investment and "Investment as of 31 December 2018" shall be filled in the table according to the Company's reinvestmet and the

to the subsidiaries' re-investment in corresponding order, and indicate the relationship in the Notes.

(2) Net income (loss) of investee shall be filled in "Net income (loss) of investee company".

(3) "Investment income (loss) recognized for the period" shall contain only investment income (loss) of all direct investees and investees under the equity method, and the investor shall confirm that its investment income investees includes the subsidiaries' re-investment.

Attachment 5: Financing provided to others for the year period ended 31 December 2018

No.	Lender (Note 1)	Counter-party	Financial statement account	Related Party	Maximum balance for the period	Ending balance	Actual amount provided	rate	Interest Nature of	Amount of sales to [financing (purchases from) counter-party	Reason for short-term financing	Allowance for doubtful accounts	Item	Collateral Value	Limit of financing amount for individual counter-party (Note2)	Limit of total financing amount (Note3)
	BJSB	[BJSB Tongan]	Other receivables		\$46,836	\$44,762	\$ -	0.00%	Note 4	\$ -	Need for operating	ა -	$\bullet$	ক্ত –	\$91,188	\$91,188
	Kwan-Ze	Radbon	Other receivables		\$15,000	\$15,000		0.00%	Note 4	\$-	Need for operating	- ה		- ئ	\$139,471	\$139,471

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

Note 2: BJSB's financing limit for BJSB Tongan was set at 40% of the lender's net worth of the financial report audited by the certified public accountants as of 31 December 2018.

\$227,971*40%=\$91,188

Kwan-Ze's financing limit for Radbon was set at 40% of the lender's net worth of the financial report audited by the certified public accountants as of 31 December 2018.

\$348,677*40%=\$139,471

Note 3: Total financing limit for individual counterparty was set at 40% of the lender's net worth of the financial report audited by the certified public accountants as of 31 December 2018.

BJSB: \$227,971*40%=\$91,188

Kwan-Ze: \$348,677*40%=\$139,471

Note 4: For short-term financing.

Investor					31 December 2018
	Name of securities	Relationship	Financial statement account	Shares	Carrying Amount	Percentage of ownership (%)	Net assets value
T-CONN	T-CONN Zhongshan	Investees for under the equity method	Investments accounted for under the equity method		S(993)	100.00%	\$(993)
T-CONN	SPL	Investees for under the equity method	Investments accounted for under the equity method		\$23,748	100.00%	\$23,748
SB BVI	SHSB	Investees for under the equity method	Investments accounted for under the equity method		USD6,285,000 \$193,142	100.00%	\$193,142
SB BVI	JYSB	Investees for under the equity method	Investments accounted for under the equity method		USD87,189,000 \$2,679,590	100.00%	\$2,679,590
SB BVI	SZSB	Investees for under the equity method	Investments accounted for under the equity method		USD10,077,000 \$309,706	100.00%	\$309,706
SB BVI	TCSB	Investees for under the equity method	Investments accounted for under the equity method		USD16,321,000 \$501,604	100.00%	\$501,604
Kwan-Ze	Argocy Research Inc.	Investees for under the equity method	Investments accounted for under the equity method	14,624,200 shares	\$248,651	17.81%	\$309,428
Sinbon Europe GmbH	Sinbon Holding GmbH	Investees for under the equity method	Investments accounted for under the equity method		EUR3,116,000 \$109,676	51.00%	\$109,676
Sinbon Holding GmbH	ET Hungary	Investees for under the equity method	Investments accounted for under the equity method		EUR911,000 \$32,078	100.00%	\$32,078
Sinbon Holding GmbH	ET Germany	Investees for under the equity method	Investments accounted for under the equity method		EUR1,258,000 \$44,271	100.00%	\$44,271
BJSB Tongan	Jiangsu EnMai Energy and Technology Co., Ltd.	Investees for under the equity method	Investments accounted for under the equity method	30,000,000 shares	RMB30,659,000 \$137,238	100.00%	\$137,238
SINBON USA L.L.C	Circuits & Cables LLC	Investees for under the equity method	Investments accounted for under the equity method		USD1,047,000 \$32,181	40.00%	\$(5,846)
SINBON USA L.L.C	WorldwideWire Harnesses	Investees for under the equity method	Investments accounted for under the equity method		USD59,000 \$1,799	50.00%	\$1,799
WorldwideWire Harnesses	STT	Investees for under the equity method	Investments accounted for under the equity method		USD(133,000) \$(4,087)	100.00%	\$(4,087)

Attachment 6: Securities held as of 31 December 2018 (Excluding subsidiaries, associates and joint ventures)

$\sim$

Attachment 7: 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 2018

					Intercompany Transactions		Details of non-arm's length transaction		Notes and accounts receivable (payable)
Related party	Counterparty	Relationship	Purchases (Sales)	Amount	Percentage of total consolidated purchase (Sales)	Terms	Unit price Terms		Carrying amount	Percentage of total consolidated receivables (payable)	Note
JYSB	The Company	Subsidiary	Sales	\$1,595,777	35.15%	Trading condition is as same as other supplier	N/A	N/A	\$(287, 872)]	27.81%

Attachment 8: Receivables from related parties with accounts exceeding the lower of NT\$100 million or 20 percent of the capital stock as of 31 December 2018

Related party	Counterparty	Relationship	Amount \$287,872 4.8	Average collection		Overdue account receivable-related parties	I Collection in subsequent I	Allowance for
				turnover	Amount	Processing method	period	doubtful debts
JYSB	The Company	Subsidiary					\$44,640	. פ

Attachment 9: Investment in Mainland China

Investee company	Main Businesses and	Total Amount of	Method of Investment	Accumulated Outflow of Investment from		Investment Flows		Accumulated Outfloy of Investment from	Net income (loss)	Percentage	Investment	Carrying Value as of	Accumulated Inward Remittance of
	Products	Paid-in Capital		Taiwan as of 1 January 2018	Outflow	Inflow		Taiwan as of 31 December 2018	of investee company	of	income Ownership (loss) recognized	31 December 2018	Eamings as of 31 December 2018
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	$\mathbf{s}$		$S -$	USD 1,020,000	\$4,925	100.00%	\$4,925	\$226,114	USD11,030,000
			Indirectly investment in	\$30,719 USD 22,050,000				\$30,719			(Note 1)		\$351,623
JYSB	Manufacturing and selling a wide variety of connectors,	USD 31,780,000	Mainland China through	\$705,108	S-			USD 22,050,000	USD12,691,000		USD12,691.000	USD87,189,000	USD19,761,000
	wires and cables.		companies registered in a third region.				$S-$	\$705,108	\$382,791	100,00%	\$382,791 (Note 1)	\$2,679,590	\$608,088
			Indirectly investment in	USD 1,700,000				USD 1,700,000	USD480,000		USD480,000	USD6,285,000	USD1,587,000
SHSB	Selling a wide variety of connectors, wires and cables.	USD 3,280,000	Mainland China through companies registered in a third	\$55,358	\$.		$S -$	\$55,358	\$14,470	100.00%	\$14,470	\$193,142	\$48,389
			region.								$(N$ ote $l)$
	Selling a wide variety of		Indirectly investment in	USD 2,750,000				USD 2,750,000	USD1,171,000		USD1,171,000	USD10,077,000	RMB13,500,000
SZSB	connectors, wires and cables.	USD 2,810,000	Mainland China through companies registered in a third	\$83,385	s.		$S -$	\$83,385	\$35,319	100.00%	\$35,319	\$309,706	\$61,261
			гедоп.								(Note 1)
	Selling a wide variety of		Indirectly investment in Mainland China through	USD 3,000,000	USD 5,000,000			USD 8,000,000	USD1,294,000		USD1,294,000	USD16,321,000	USD196,000
TCSB	connectors, wires and cables,	USD 14,000,000	companies registered in a third region.	\$96,090	\$151,973		-S.	\$248,063	\$39,039	100,00%	\$39,039 (Note 1)	\$501,604	\$5,890
	Technology development of		Indirectly investment in						$\mathbf{s}$ .		\$.	$\hat{\mathbf{s}}$	$\mathsf{S}$
China Digital Library Corp.Ltd.	computer software, transfer of technology, advisory service	RMB 88,600,000	Mainland China through companies registered in a third region.	USD 750,000	s.		S	USD 750,000		4.85%	(Note 2)
Argosy (Beijing) Technologies Co	Selling a wide variety of connectors, wires and cables	RMB 5,000,000	Indirectly investment in Mainland China through companies registered in a third	USD 76,000	s.		S	USD 76,000	$\mathbf{s}$	12.00%	$\mathbf{s}$ .	S	$S -$
Ltd.			region
			Indirectly investment in	USD 1,900,000				USD 1,900,000	\$.		$\mathsf{s}$ .	S	$\mathsf{s}$ .
Wu Xi S&D	Manufacturing and selling new flat panel displays.	USD 4,000,000	Mainland China through companies registered in a third region.	\$61,823	s.		\$	\$61,823
Ning Bo Smart and	Manufacturing and selling a		Indirectly investment in Mainland China through	USD 1,140,000				USD 1,140,000	s.		$\mathbb{S}$ .	S	$S -$
Diligent Co., Ltd.	new Flat Panel Display.	USD 2,000,000	companies registered in a third region.	\$37,025	s.		$S -$	\$37,025
	Manufacturing and selling a		Indirectly investment in	USD 5,266,000				USD 5,266,000	$\mathbf{s}$ .		s.	$S -$	s.
JY Sinact	wide variety of electronic materials.	USD 9,500,000	Mainland China through companies registered in a third region.	\$164,599	ŝ.		S	\$164,599

Attachment 9: Investment in Mainland China

Investee company	Main Businesses and	Total Amount of	Method of Investment	Accumulated Outflow of Investment from		Investment Flows	Accumulated Outflow of Investment from	Net income (loss) Percentage		Investment	Carrying Value as of	Accumulated Inward Remittance of
	Products	Paid-in Capital		Taiwan as of I January 2018	Outflow	Inflow	Taiwan as of 31 December 2018	of investee company	of	income Ownership (loss) recognized	31 December 2018	Earnings as of 31 December 2018
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	USD 104,000	\$-1		USD 104,000	$S -$			s.	$s -$
			region.	\$3,302			\$3,302
Dong Guan CMK	Manufacturing and selling a wide variety of connectors,	USD 1,000,000	Indirectly investment in Mainland China through	USD 645,000	ς.		USD 645,000	$s -$			s.	$S -$
	wires and cables.		companies registered in a third region.	\$20,768]			\$20,768
T-CONN	Manufacturing and selling a		Indirectly investment in Mainland China through	USD 3,086,000			USD 3,086,000	\$9,883	62.52%	\$9,883	\$(993)	$S-$
Zhongshan	wide variety of connectors, wires and cables.	USD 7,100,000	companies registered in a third region.	\$99,007	\$-	S-l	\$99,007			(Note 3)
	Manufacturing and selling a		Indirectly investment in	USD 3,000,000			USD 3,000,000	\$378,553	100.00%	\$378,553	\$1,294,388
BJSB Tongan	wide variety of connectors, wires and cables.	USD 3,000,000	Mainland China through remittance from a third region.	\$89,134	\$.	\$-	\$89,134			(Note 1)		USD4,600,000 \$138,528

Accumulated Investment in Mainland China as of 31 December 2018	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
USD51,487,000	USD 53,420,000	N/A (Note 4)

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

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

Note 3: The financial statements certificated by other public accountant.

$\sim$

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

$\sim 10^{-1}$

$\mathcal{A}^{\mathcal{A}}$

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

FOR THE YEAR ENDED 31 DECEMBER 2018

ITEM	INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF ACCOUNTS RECEIVABLE	$\overline{2}$
STATEMENT OF OTHER RECEIVABLES	3
STATEMENT OF INVENTORIES	$\overline{4}$
STATEMENT OF OTHER CURRENT ASSETS	5
STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME, NONCURRENT	6
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD	7
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note $6(9)$
STATEMENT OF CHANGES IN ACCUMULATED DEPERCIATION OF PROPERTY, PLANT AND EQUIPMENT	Note $6(9)$
STATEMENT OF SHORT-TERM LOANS	8
STATEMENT OF ACCOUNTS PAYABLE	9
ISTATEMENT OF NET OPERATING REVENUES	10
ISTATEMENT OF OPERATING COSTS	11
STATEMENT OF MANUFACTURING EXPENSES	12
STATEMENT OF OPERATING EXPENSES	13
STATEMENT OF NON-OPERATING INCOME AND EXPENSES	Note $6(19)$

SINBON ELECTRONICS CO., LTD. 1. STATEMENT OF CASH AND CASH EQUIVALENTS 31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Item	Description	Amount
Cash on hand		\$22
Bank savings
Demand deposits-NTD		71,244
Demand deposits – foreign	USD 17,718 thosuand	625,614
currency	JPY 30,238 thosuand
	EUR 1,654 thosuand
	HKD 205 thosuand
	RMB 411 thosuand
	GBP 305 thosuand
Time deposits – foreign	USD 2,000 thosuand	91,725
currency	RMB 7,000 thosuand
Total		\$788,605

SINBON ELECTRONICS CO., LTD.

2. STATEMENT OF ACCOUNTS RECEIVABLE

31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Client Name	Description	Amount	Note
Third parties:
Client A		\$119,475
Client B		65,038
Client C		64.333
Others (Note)		829,276
Subtotal		1,078,122
Less $\cdot$ loss allowance		(1,166)
Subtotal (third parties)		1,076,956
Related parties:
Circuits & Cables LLC		327
Others (Note)		5
Subtotal (related parties)		332
Total		\$1,077,288

(Note) The amount of individual client in others does not exceed 5% of the account balance.

3. STATEMENT OF OTHER RECEIVABLES

31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Client Name	Description	Amount	Note
VAT and GST refund		\$21,324
Interest Receivable		114

Third parties $\colon$
Client A		20,396
Others (Note)		24,410
Subtotal		44,806
Less: loss allowance		(2,366)
Subtotal (Third parties)		42,440

Related parties:
Jiangyin Sinbon Electronics Co., Ltd.		44,783
Hong Kong Sinbon Electronics Co., Ltd.		20,775
Others (Note)		1,159
Subtotal (Related parties)		66,717
Total		\$130,595

(Note) The amount of individual client in others does not exceed 5% of the account balance.

$\ddot{\phantom{a}}$

4. STATEMENT OF INVENTORIES

31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Item	Cost	Fair value	Note
Raw materials	\$166,048	\$159,484	Please refer to
Work in process	21,756	21,510	Note 4. $(10)$ for
Finished goods	271,800	268,622	more details on
Merchandise	179,160	176,228	net realizable
Subtotal	638,764	\$625,844	value
Less $\cdot$ allowance for	(14,990)
inventory valuation and
obsolescence losses
Total	\$623,774

SINBON ELECTRONICS CO., LTD. 5. STATEMENT OF OTHER CURRENT ASSETS 31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

			ui Thousands Of NOW Tarwan Donars,
Item	Description	Amount	Note
Prepaid expenses	Rent expense, Insurance etc.	\$13,818
Prepayment for		13,554
purchases
Temporary payments		7,884
Payment on behalf of		1,394
others
Others		4,023
Total		\$40,673

SINBON ELECTRONICS CO., LTD. 6. STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME, NONCURRENT FOR THE YEAR ENDED 31 DECEMBER 2018

										(In Thousands of New Taiwan Dollars)
Name of Securities		As of 1 January 2018	Additions			Decrease	Adjustments		As of 31 December 2018	Accumulated	Collateral	Note
	Shares	Fair Value	Shares	Amount	Shares	Amount		Shares	Fair Value	impairment
Chengding Venture Capital Co., Ltd.		$\sqrt[3]{2}$	15,000,00	\$104,762	$\overline{\phantom{0}}$	$\hat{\mathbf{S}}$ –	\$(1,390)	15,000,0	\$103,372	N/A	None
Top Taiwan Venture Capital Co., Ltd.			6,000,000	11,816	$\overline{\phantom{0}}$		45,543	6,000,00	57,359	N/A	None
Dynahz Technologies		$\blacksquare$	2,771,670	36,195	$\overline{\phantom{0}}$		(3, 725)	2,771,67	32,470	N/A	None
Top Taiwan VII Venture Capital Co., Ltd.	$\blacksquare$		2,418,368	15,780	(520, 408)	(5,204)	8,108	1,897,96	18,684	N/A	None
Gongwin Biopharm Holdings Co., Ltd.	۰	$\blacksquare$	246,963	15,922	(11, 963)	(791)	567	235,000	15,698	N/A		(Note2)
Top Taiwan III Venture Capital Co., Ltd.		$\blacksquare$	813,008	4,216	(121, 951)	(1,220)	1,291	691,057	4,287	N/A	None	(Note3)
Top Taiwan II Venture Capital Co., Ltd.		$\blacksquare$	775,000	1,912	(427,500)	(775)	1,098	347,500	2,235	N/A	None	(Note4)
Bandrich, Inc.		$\overline{\phantom{0}}$	330,000	1,082	٠		(533)	330,000	549	N/A	None	(Note5)
Japan Sinbon Electronics Co., Ltd.		$\blacksquare$	75	13,521	$\overline{a}$		(12, 726)	75	795	N/A	None
INPAQ Technology Co., Ltd.	$\blacksquare$		4,182,231	116,894	(4,182,23)	(188, 213)	71,319		$\blacksquare$	N/A	None
General Research of Electronics Inc.	$\blacksquare$	$\blacksquare$	16,000		(16,000)					N/A	None	(Note6)
HOTWIRE Development LLC		$\blacksquare$	11,000	1,865	$\overline{\phantom{a}}$	(32, 653)	30,788	$\blacksquare$			None	(Note7)
Total				\$323,965		\$(228,856)				N/A	None	(Note8)
							\$140,340		\$235,449
				(Notel)

Note 1: In accordance with the requirement of IFRS 9, the beginning balance is measured at fair value at the date of initial application was NT\$323,319 thousand; Increasing invested NT\$646 thousand in Gongwin Biopharm Holdings Co., Ltd.

Note 2: The return of paid-in capital for capital reduction from Top Taiwan VII Venture Capital Co., Ltd. was NT\$5,204 thousand.

Note 3: Disposal of Gongwin Biopharm Holdings Co., Ltd., which the fair value of the investments was NT\$791 thousand.

Note 4: The return of paid-in capital for capital reduction from Top Taiwan III Venture Capital Co., Ltd. was NT\$1,220 thousand.

Note 5: The return of paid-in capital for capital reduction from Top Taiwan II Venture Capital Co., Ltd. was NT\$775 thousand.

Note 6: Disposal of INPAQ Technology Co., Ltd., which the fair value of the investments was NT\$188,213 thousand.

Note 7: Disposal of General Research of Electronics Inc. for 16,000 shares.

Note 8: Due to the transfer of equity structure, the Company transfer all of HOTWIRE Development LLC's shares to Sinbon USA L.L.C. in the amount of NT\$32,653 thousand.

SINBON ELECTRONICS CO., LTD. 7. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD FOR THE YEAR ENDED 31 DECEMBER 2018

$\sim$ $\sim$ $\sim$ $\sim$ $\sim$

													(In Thousands of New Taiwan Dollars)
	As of 1 January 2018		Additions		Decrease		Investment	Exchange	As of 31 December 2018		Fair value/ Net assets value
Name
	Shares	Fair Value	Shares	Amount	Shares	Amount	income (loss)	differences	Shares	%	Amount	Unit	Total	Collateral	Note
Sinbon International Enterprise Co., Ltd.	USD 47,781,715 \$3,159,164		US\$5,000,000 \$151,973			\$(28, 867)	\$465,726	\$ (84,294)	USD 52,781,715	100.00%	\$3,663,702	price	Amount \$3,663,702	None	(Note 1)
Beijing Sinbon Electronics Co., Ltd.	USD 4,451,200	226,582					4,925	(5,393)	USD 4,451,200	100.00%	226,114		226,114	None
Hong Kong Sinbon Electronics Co., Ltd.	HKD 95,606,400	508,558				(116,963)	71,274	14,651	HKD 95,606,400	100.00%	477.520		477,520	None	(Note 2)
Beijing Sinbon Tongan Electronics Co., Ltd.	US\$3,000,000	1,093,652				(153,920)	378,553	(23, 897)	US\$3,000,000	100.00%	1,294,388		1,294,388	None	(Note 3)
Kwan-Ze Corporation Ltd.	23,560,000 shares	335,588				(38, 722)	53,981	(2,168)	23,560,000 shares	100.00%	348,679		348,679	None	(Note 4)
Top Taiwan IV Venture Capital Co., Ltd.	4,000,000 shares	41,916			,760,000 shares	(17, 859)			2,240,000 shares	20.00%	24,061		24,061	None	(Note 5)
Sinbon Europe GmbH	EUR 5,208,773	164,557					(50, 628)	(3, 433)	EUR 147,411,769	100.00%	110,496		110,496	None
Super Elite Ltd.	USD 4,233,076	15,259			USD 507,454	(15,629)	(5)	483	USD 3,725,622	64.48%	108		108	None	(Note 6)
Sinbon USA L.L.C.	USD 3,000,000	65,492	US\$1,058,574	34,648		(28, 770)	(9, 860)	(328)	USD 2,600,000	100.00%	61.182		61,182	None	(Note 7)
Argocy Research Inc.	2,945,034 shares	46,996				(7,954)	10,605	(437)	2,945,034 shares	3.59%	49.210		49,210	None	(Note 8)
Radbon Avionics Inc.	2,700,000 shares	8,157	3,300,000 shares		30,906 2,700,000 shares	(1,775)	(6, 761)		3,300,000 shares	55.00%	30,527		30,527	None	(Note 9)
Worldwide Wire Harnesses Co., Ltd.	USD 75,000	6,495				(1,995)	(4,797)	297	US\$75,000	100.00%				None	(Note 10)
T-CONN Precision Co., Ltd.	5,633,950 shares	68,107		60,727			24,233	400	11,308,970 shares	62.52%	153,467		153,467	None	(Note $11$ )
Total		\$5,740,523		\$278,254		\$ (412, 454)	\$937,250	$\sqrt{5(104,119)}$			\$6,439,454		\$6,439,454

31.4.011

Note 1: Sinbon International Enterprise Co., Ltd. distributed dividends RMB 6,300 thousand (NT\$ 28,867 thousand) and the Company invested additional USD5,000 thousand(NT\$151,973 thousand) in Sinbon International Enterprise

Note 2: Hong Kong Sinbon Electronics Co., Ltd. distributed dividends USD 3,822 thousand (NT\$ 116.963 thousand).

Note 3: Beijing Sinbon Tongan Electronics Co., Ltd. distributed dividends RMB 32,457 thousand (NT\$153,920 thousand).

Note 4: Kwan-Ze Corporation Ltd. distributed dividends NT\$24,393 thousand. The Company recogined an increase in unrealized gains (losses) on equity instruments measured at fair value through other comprehensive income gain thousand and recogined an decrease in NT\$11,166 thousand of the effect due to adopted IFRS 9.

Note 5: The return of paid-in capital for capital reduction from Top Taiwan IV Venture Capital Co., Ltd. was (NT\$17,600thousand) in a total of 1,760 thousand shares and distributed dividends (NT\$800 thousand). The Company unrealized gains (losses) on equity instruments measured at fair value through other comprehensive income gain (losses) NT\$541 thousand.

Note 6: The return of paid-in capital for capital reduction from Super Elite Ltd, was USD 507 thousand (NT\$15.629thousand).

Note 7: The Company invested additional USD 1,059 thousand (NT\$34,648 thousand) in Sinbon USA L.L.C. due to the transfer of equity strucctur. The Company recogined an increase in unrealized gains (losses) on equity instrum through other comprehensive income gain (losses) NT\$(28,770) thousand.

Note 8: Argocy Research Inc. distributed dividends (NT\$7,510 thousand). The Company recogined an increase in unrealized gains (losses) on equity instruments measured at fair value through other comprehensive income gain (l

Note 9: The return of paid-in capital for capital reduction from Radbon Avionics Inc. was NT\$1,775 thousand in a total of 3,300 thousand shares. The Company invested additional NT\$31,426 thousand in Radbon Avionics Inc. an capital surplus in the amount of NT\$520 thousand.

Note 10: The Company decreased in investments of Worldwide Wire Harnesses Co., Ltd. in the amount of NT\$ (1,995) thousand due to the transfer of equity struccture.

Note 11: The Company invested additional NT\$ 60,294 thousand in T-CONN Precision Co., Ltd. and regonized and recogined an increase in capital surplus in the amount of NT\$433 thousand.

8. STATEMENT OF SHORT-TERM LOANS

31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Type	Description	Balance, End of Year	Contract Period	Interest rates applied (%)	Loan Commitments
Unsecured bank loans	HSBC Bank (Taiwan) Limited, Taichung Branch	\$987,250	Within 365days	$0.65 - 0.73%$	USD\$33,000
Unsecured bank loans	Land Bank	300,000	Within 365days	0.75%	NT\$300,000
Unsecured bank loans	Export-Import Bank of the Republic of China (Eximbank)	100,000	Within 365days	0.80%	NT\$100,000
Unsecured bank loans	Bank SinoPac	92,475	Within 365days	0.60%	NT\$450,000
	Add: Foreign exchange losses	10,537
	Total	\$1,490,262

9. STATEMENT OF ACCOUNTS PAYABLE

31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Vendor Name	Description	Amount
Third Parties:
Vendor A	Payment	\$375,514
Others (Note)		212,959
Subtotal(Third parties)		588,473

Related parties:
Jiangyin Sinbon Electronics Co., Ltd.	Payment	287,872
Others (Note)		13.156
Subtotal(Related parties)		301,028
Total		\$889,501

(Note) The amount of individual client in others does not exceed 5% of the account balance.

SINBON ELECTRONICS CO., LTD. 10. STATEMENT OF NET OPERATING REVENUES FOR THE YEAR ENDED 31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Item	Shipments(Piece)	Amount
Cable assembly	32,659,976 PCS	\$3,432,533
Cable connectors	398,012,164 PCS	1,390,237
Other operating revenues		113,545
Others	1,750,906 PCS	99,612
Total		\$5,035,927

$\sim$

11. STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED 31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Item	Amount
Cost of sales of goods manufactured
Direct material: Raw material purchased	\$740,621
Add $\div$ raw material, beginning of year	166,669
Transferred from finished goods	592,189
Less: raw material, end of year	(166, 048)
Sale of raw material	(225, 239)
Transferred to expenses	(15,025)
Direct material uesd	1,093,167
Direct labor	45,641
Manufacturing expenses (Refer to 12)	118,569
Manufacturing cost	1,257,377
Add: work in process, beginning of year	24,143
Less: work in process, end of year	(21, 756)
Cost of finished goods	1,259,764
Add: finished goods, beginning of year	261,214
Finished goods purchased	1,775,123
Transferred from manufaturing expense	7,887
Less: finished goods, end of year	(271, 800)
Transferred to raw material	(592, 189)
Others	(13,007)
Cost of sales of goods manufactured (A)	2,426,992
Cost of sales of goods purchased
Merchandise purchased	1,242,605
Add: merchandise, beginning of year	127,953
Less: merchandise, end of year	(179,160)
Transferred to expenses	(4,888)
Cost of sales of goods purchased (B)	1,186,510
Cost from sale of raw material (C)	225,239
Operating Costs $(D)=(A)+(B)+(C)$	3,838,741
Loss on valuation (E)	(1,712)
Loss on scrap of inventories $(F)$	22,052
Revenue from sale of scraps (G)	(152)
Purchased on behalf of others (H)	(182, 345)
Other operating cost $(I)$	74,128
$Total(J)=(D)+(E)+(F)-(G)-(H)+(I)$	\$3,750,712

SINBON ELECTRONICS CO., LTD. 12. STATEMENT OF MANUFACTURING EXPENSES FOR THE YEAR ENDED 31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

Item	Amount
Indirect labor	\$39,005
Processing costs	35,170
Insurance expense	11,965
Depreciation expense	8,950
Food stipend	7,036
Pension	5,699
Others (Note)	18,631
Less: Transferred to finished goods	(7,887)
Total	\$118,569

(Note) The amount of individual client in others does not exceed 5% of the account balance.

SINBON ELECTRONICS CO., LTD. 13. STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED 31 DECEMBER 2018

(In Thousands of New Taiwan Dollars)

	Selling and	General and	Research and
Item	Marketing	Administrative	Development	Total
	Expenses	Expenses	Expenses
Payroll Expense	\$75,628	\$199,501	\$126,837	\$401,966
Commission	105,593			105,593
Freight expense	35,130	307	102	35,539
Insurance expense	8,916	11,552	13,565	34,033
Sample expense	17,299			17,299
Others (Note)	56,396	120,339	42,191	218,926
Total	\$298,962	\$331,699	\$182,695	\$813,356

(Note) The amount of individual client in others does not exceed 5% of the account balance.

AI assistant

SINBON Electronics — Regulatory Filings 2018

52256_rns_2018-12-25_63302d8e-3b51-49f9-9049-b6ab7809ba65.pdf

PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

1. Valuation for inventories (Including inventories of the subsidiaries under the equity method)

2. Impairment of accounts receivable

Other Matter-Making Reference to the Audits of Component Auditors

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditor's Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS(Continued) 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended 31 December 2018 and 2017

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended 31 December 2018 and 2017

English Translation of Financial Statements Originally Issued in Chinese SINBON ELECTRONICS CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS(Continued)

SINBON ELECTRONICS CO., LTD. NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS For the Years Ended 31 December 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. History and organization

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

3. Newly issued or revised standards and interpretations

(2) IFRS 9"Financial Instruments"

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS (Continued)

(a) IFRS $16$ "Leases"

(d) Prepayment Features with Negative Compensation (Amendments to IFRS 9)

IFRS 3 "Business Combinations"

IFRS 11 "Joint Arrangements"

IAS 12 "Income Taxes"

IAS 23 "Borrowing Costs"

(f) Plan Amendment, Curtailment or Settlement (Amendments to IAS 19)

(b)IFRS 17 "Insurance Contracts"

(1) estimates of future cash flows

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

4. Summary of significant accounting policies

(2) Basis of Preparation

(3) Foreign Currency Transactions

The accounting policy from 1 January 2018 is as follows:

Financial assets measured at amortized cost

Financial asset measured at fair value through profit or loss

The accounting policy before 1 January 2018 is as follows:

Available-for-sale financial assets

Held-to-maturity financial assets

Loans and receivables

The accounting policy from 1 January 2018 is as follows:

The accounting policy before 1 January 2018 is as follows:

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

Classification between liabilities or equity

Equity instruments

Compound instruments

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

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

(10) Inventories

$(13)$ Leases

Company as a lessee

(14) Intangible Assets

(15) Impairment of non-financial assets

(16) Provisions

Provision for decommissioning, restoration and rehabilitation costs

Sales returns and allowances

The accounting policy from 1 January 2018 is as follows:

Sale of goods

Rendering of services

The accounting policy before 1 January 2018 is as follows:

Sale of goods

Rendering of services

Interest income

Dividends

(18) Borrowing costs

(19) Post-employment benefits

Current income tax

Deferred tax

$51$ Significant accounting judgments, estimates and assumptions

Estimates and assumptions

SINBON Electronics Regulatory Filings 2018

$5₁$ Significant accounting judgments, estimates and assumptions